Mahmood Called for Banker Bonus Tax to Fix Youth Unemployment

Shabana Mahmood, the front-runner to become Andy Burnham’s Chancellor, has previously called for a tax on banker bonuses to address youth unemployment. In 2015, as shadow financial secretary, she supported a Labour bill proposing a 50% levy on discretionary bonuses over £25,000, with banks also paying a 50% tax on the same bonuses. Critics warned the effective tax rate could reach 115%. Mahmood argued the banking system must be underpinned by fairness and transparency. The bill aimed to fund guaranteed paid starter jobs for young people unemployed for over a year. Banker bonuses have surged since the Conservative government scrapped the bonus cap. Youth unemployment has risen since Labour came to power in 2024, with a Milburn review estimating the crisis costs the UK up to £125bn annually. Industry body UK Finance warned that sector-specific taxes would reduce international competitiveness. Mahmood’s office was contacted for comment.