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 to levy a 50% tax on discretionary bonuses over £25,000, with banks also paying a 50% tax on the same bonuses, potentially reaching an effective rate of 115%. Mahmood argued bonuses should reward exceptional performance, not failure, and that the banking system must be fair and transparent. The bill aimed to fund guaranteed paid starter jobs for young people unemployed for over a year. Since Labour came to power in 2024, youth unemployment has surged, with a Milburn review estimating the crisis costs the UK up to £125bn annually. Banker bonuses have risen sharply after the Conservative government scrapped the bonus cap. Industry body UK Finance warned that additional sector-specific taxes would reduce the UK's international competitiveness. Mahmood's office was contacted for comment.