Shabana Mahmood, who is widely regarded as Andy Burnham’s preferred choice for Chancellor, previously backed restoring the 50p additional rate of income tax. Her past comments have resurfaced as the incoming Prime Minister prepares to enter Downing Street.
The remarks have drawn renewed attention after Mr Burnham said this week he "may have to ask for a little more" from taxpayers. Reform UK MP Lee Anderson reacted to breaking reports that Ms Mahmood is set to be given the role of Chancellor by Andy Burnham.
Mahmood’s Previous Support for a 50p Rate
During a House of Commons debate in 2014, Ms Mahmood stated it was "unfair and wrong" for the Conservatives to reduce the additional rate of income tax from 50p to 45p. The former shadow Treasury minister said: "It would be right for the next Labour Government to raise it to 50p again."
She also argued there was "no justification for giving a huge tax cut to the richest in our country." Ms Mahmood added that "ordinary working people" had paid the price of the Conservative reduction.
Implications for Labour’s Manifesto and Tax Definition
Reintroducing a 50p additional rate would breach Labour’s manifesto commitment not to increase National Insurance, VAT, or the basic, higher or additional rates of income tax. However, Labour’s manifesto stated the pledge applied to "working people," leaving questions over whether any future changes could affect those whose income is primarily derived from property, investments or dividends.
Another option available to ministers would be reducing the £125,140 threshold at which the additional rate of income tax begins. Labour has previously faced questions over how it defines a "working person." Sir Keir Starmer previously suggested it referred to someone who could not "write a cheque to get out of difficulty," while Rachel Reeves described working people as "those who go out to work."
Opposition Criticism Over Potential Tax Hikes
The Conservatives criticised the prospect of future tax rises following reports that Ms Mahmood could become Chancellor. Shadow chancellor Sir Mel Stride urged Mr Burnham and Ms Mahmood to learn from what he described as "Rachel Reeves’s disastrous economic incompetence," warning that "Britain cannot afford yet more tax."
Sir Mel added: "Andy Burnham isn’t even PM yet and he is already saying he might ‘ask for a little more’ tax." He also stated that Mr Burnham’s "reported pick as chancellor also has a long record of calling for tax hikes." Sir Mel accused Labour of "tax, spend and borrow profligacy" and making "broken promises."
Reform UK’s shadow chancellor Robert Jenrick also criticised the prospect of higher taxes. Mr Jenrick said: "Andy Burnham has backed billions in tax rises. Shabana Mahmood has backed billions more." He added that families could face paying thousands of pounds more in tax under a Burnham Government despite having no "democratic mandate to raise them by a penny."