Burnham Chooses Mahmood as Chancellor Amid Tax Fears 2026

Key Points

• Shabana Mahmood is widely expected to be named chancellor in Andy Burnham’s incoming government, after Burnham’s inner circle objected to his original choice, Ed Miliband.
• The home secretary has impressed many with her handling of the immigration crisis and is seen as a chancellor who will keep markets calm when the new government takes over.
• Ed Miliband faces concerns over his image as a former Labour leader who failed to win voters in 2015, as well as worries about his hardline net zero stance.
• Other names considered for chancellor included Wes Streeting, Darren Jones and Yvette Cooper; Streeting was seen as “too divisive”.
• Part of the cabinet reshuffle will see more economic policy run from Downing Street and the Cabinet Office rather than solely from the Treasury.
• In an interview on Gary Lineker’s podcast, Burnham hinted at possible tax changes including a potential wealth tax, saying decisions are “not for now” but “for another day”.
• Former transport secretary Louise Haigh is set to run a beefed-up Cabinet Office role controlling policy and aspects of economic policy.
• Angela Rayner, Lucy Powell and Lisa Nandy are also expected to receive cabinet roles or promotions.
• Shadow chancellor Sir Mel Stride criticised Burnham for fuelling speculation about new taxes, warning that fears of tax rises put investment and hiring on hold.
• Burnham has said he will stick to Labour’s manifesto pledges not to raise VAT, income tax or national insurance on working people, but there is “some room” for movement within the manifesto.
• He has proposed cutting business rates for pubs, clubs and music venues by 20%, and raising thresholds for small independent retailers, funded by higher levies on large online warehouses and empty high street property owners.
• Burnham’s team are exploring targeted tax increases to reduce household bills, including removing green levies from energy and water bills, funded by revisiting capital gains tax rates on shares, second homes and other assets.
• There is speculation that an expanded autumn Budget may combine a fiscal statement with a spending review to set out Burnham’s political strategy.
• With jobs not confirmed before Burnham takes over as prime minister on Monday, a senior minister admitted “very little is known about who will fill what roles”.

UK (Liverpool standard) July 15, 2026 – As reported by the journalist of The Independent, a source close to the transition team stated that “Shabana is in the driving seat for the job. It won’t be Ed now. But Andy is going to do things differently from before”. Another source added,

“Ed Miliband’s previous as leader [of the party] is problematic. The net zero stuff isn’t ideal either”.

Shabana Mahmood, currently the home secretary, is widely expected to be named as Andy Burnham’s chancellor after the prime minister-in-waiting’s inner circle objected to his original choice, Ed Miliband, The Independent understands. The home secretary has impressed many with her sure-footed handling of the immigration crisis and she is seen as a chancellor who will keep the markets calm when the new government takes over on Monday.

The choice of chancellor has been seen as crucial for Mr Burnham, who told Andrew Marr on LBC recently that he had yet to make up his mind who got the job. But with Ms Mahmood previously endorsed by former prime minister Sir Tony Blair as a potential leader of the party, and as someone more on the right of the party than Mr Miliband, she is seen as someone who will not spook the markets.

Meanwhile, Mr Miliband, who has served as energy secretary under Sir Keir, has caused division within Mr Burnham’s team. Some of his decisions in his current role have upset businesses, such as his move to drop opposition to drilling for new oil and gas in the North Sea, and were seen by some as a confirmation that he would get the chancellor job. But beyond concerns over his hardline stance on net zero policies, there have also been worries over his image as a former leader of Labour who spectacularly failed to win over voters in the 2015 election.

Other names in the frame for the chancellor job have been former health secretary Wes Streeting, outgoing chancellor of the Duchy of Lancaster Darren Jones and foreign secretary Yvette Cooper. Mr Streeting was apparently discounted early as “too divisive”, while another potential candidate, welfare secretary Pat McFadden, was seen as too supportive of welfare cuts an issue highlighted when texts to the disgraced Labour peer Peter Mandelson were published.

What Cabinet Changes Are Expected and How Will Economic Policy Be Ran?

As reported by a senior minister of The Independent,

“This has been such a spectacular coup that nobody has a clue what’s happening. Let’s hope Andy and his team know what they are doing”.

Part of the changes in cabinet will see more economic policy run from Downing Street and Cabinet Office, rather than the Treasury.

The Independent earlier revealed that former transport secretary Louise Haigh is set to be running the Cabinet Office in a beefed up chancellor of the Duchy of Lancaster role which will see her controlling policy as well as aspects of economic policy. Former deputy prime minister Angela Rayner and current deputy leader Lucy Powell are also set for cabinet roles, while culture secretary Lisa Nandy is expected to be promoted.

With jobs not set to be confirmed before Monday when Mr Burnham takes over officially from Sir Keir, having become Labour leader on Friday, there is still speculation as to who will end up in his top team. But one very senior minister admitted to The Independent that very little is known about who will fill what roles.

Is Burnham Planning a Wealth Tax and an Expanded Autumn Budget?

As reported by The Independent, in an interview with former England football captain and ex-BBC presenter Gary Linker’s podcast, Mr Burnham hinted at introducing a wealth tax. He said:

“I’m going to obviously take my time to properly look at the state of things, particularly the state of finances. I’m not going rule things out right now. I do believe we need a greater sense of fairness and people feeling that things are being done in the right way and a fair way.”

“But at the same time, you know, I don’t want to sort of be perceived as somebody who’s coming in with grudges and agendas and, you know, going to just immediately find or demonise one group or create a new way of dividing people.”

“So, you know, decisions to be taken in time, they’re going to be difficult. I’m not going to shy away from that. You know, we are going to have to work quite hard to make sure, you know, we can pay our way.”

“And at some point that might be having to ask for a little more. But, you know, those decisions are not for now. They’re for another day.”

Meanwhile, the Financial Times has reported that Andy Burnham is considering combining a fiscal statement with a spending review to set out his political strategy in an expanded autumn Budget. A combined autumn fiscal statement covering both tax measures and departmental budgets would represent a significant shift in UK fiscal planning, according to reports.

What Has Sir Mel Stride Said About Burnham’s Tax Speculation?

Shadow chancellor Sir Mel Stride said: “Andy Burnham should be ruling out a fresh tax raid. Instead, he is fuelling speculation about new taxes.” He warned:
“We know how this ends – we saw it already last year. Fears of tax rises at the Budget will mean investment and hiring get put on hold and wealth creators leave our shores.”

“Labour’s answer is always more taxes. Only the Conservatives have a plan to build a stronger economy by getting the benefits bill down so we can bring down the tax burden and get Britain working.”

In a separate address at the British Chambers of Commerce Global Annual Conference, Sir Mel Stride sharpened the focus on the nation’s economic course, saying that “Andy Burnham must not veer left or slap new taxes on British businesses if he hopes to chart a credible course to No 10”.

What Specific Tax and Business Rate Changes Has Burnham Proposed?

As reported by BBC News, Burnham said there is “some room” for movement on tax, but he will stick to Labour’s pledges to not raise VAT, income tax or national insurance. In an interview with LBC, Burnham suggested business rates on warehouses could be increased to fund tax cuts for pubs and some high-street businesses.

Burnham said pubs, clubs and music venues would receive a 20% cut, while smaller, independent hospitality, leisure and retail companies would have the threshold for paying business rates raised for the first time since 2017. The cuts would be paid for by higher levies on giant warehouses operated by online firms such as Amazon, and targeting the owners of empty high street properties.

According to analysis by the Institute for Fiscal Policy, Burnham’s team are exploring targeted tax increases to reduce household bills, including removing green levies from energy bills, water bills and public transport. These would be funded by revisiting the rates of capital gains tax paid on the proceeds of share sales, second homes, and other assets.

In relation to property taxation, Burnham has described the current council tax as “highly regressive”, backing the Fairer Share campaign, which advocates for a proportional property tax to replace both council tax and stamp duty land tax. He has also long called for a land value tax (LVT), arguing it could be used to scrap SDLT.

Background of the Development

This cabinet speculation emerges as Andy Burnham, newly elected Labour leader, prepares to take over as prime minister from Sir Keir Starmer on Monday, with Labour MPs having nominated him to replace the outgoing prime minister. The role of chancellor has become particularly sensitive following last year’s turmoil when rumours that Sir Keir was to sack Rachel Reeves forced the outgoing prime minister to make a public statement assuring her future to prevent a run on UK bonds, which would have hit the cost of borrowing.

The debate over whether Burnham will pursue a wealth tax, an expanded autumn Budget, or wider tax reforms has intensified because the incoming government faces a difficult fiscal position, with pressure to reduce household bills while maintaining public services and controlling the benefits bill. The choice of chancellor is therefore not just about party balance but about market confidence, with Mahmood seen as someone “more on the right of the party” who will not spook investors.

Prediction: How Could This Development Affect UK Voters and Businesses?

If Shabana Mahmood is confirmed as chancellor and Burnham proceeds with an expanded autumn Budget, UK voters may face uncertainty about whether some taxes will rise, particularly capital gains, property-related charges, or green levies, even if income tax, VAT and national insurance remain unchanged. This uncertainty alone could delay hiring and investment, as Sir Mel Stride warned that

“fears of tax rises at the Budget will mean investment and hiring get put on hold and wealth creators leave our shores”.

For small businesses, especially pubs, clubs, music venues and independent retailers, Burnham’s proposed business rate cuts could provide immediate relief, but the offsetting taxes on large online warehouses and empty property owners may reshuffle competition on high streets. Homeowners with second properties or significant share portfolios could see higher capital gains charges if Burnham’s team revisits CGT rates, while households may see energy or water bills fall if green levies are removed, depending on how the offset is funded. Overall, the combination of a new chancellor, potential tax changes and an expanded Budget is likely to create a period of heightened fiscal debate, with clear winners and losers depending on how the final policy slate is designed.