Overview
- Shabana Mahmood was widely reported as Andy Burnham’s likely chancellor on Friday and her earlier Commons remarks supporting a return to a 50p additional income tax rate have resurfaced.
- Published calculations show raising the additional rate from 45p to 50p would increase tax bills by about £1,240 a year for someone on £150,000 and about £3,740 for someone on £200,000.
- Mahmood has previously backed restricting pension tax relief for higher earners as a revenue source and the Institute for Fiscal Studies has modelled that capping relief at the basic 20% rate could raise up to about £22 billion a year by 2029.
- Opponents and think‑tanks warn changes to pension tax relief would hit public sector workers, deter saving, and clash with the Labour manifesto pledge not to raise income tax rates.
- No formal policy has been announced and Mr Burnham has only said the government may need to ‘ask for a little more,’ so the incoming chancellor’s selection and early fiscal choices will determine whether these past positions become official plans.