Gordon Brown has urged ministers to hike taxes on online casinos and slot machines to cover the cost of lifting children out of poverty. The former prime minister backed new research showing gambling tax reforms could generate the £3.2 billion needed to scrap controversial welfare policies.
The Institute for Public Policy Research (IPPR) said axing the two-child limit and benefit cap could lift half a million children out of poverty. The think tank described this as a way to "reverse years of rising hardship for low-income families".
Brown calls for gambling industry reform
Giving his backing to the IPPR research, Brown said it would be the "first crucial step in the war we must wage against child poverty". The former Labour prime minister argued the "highly profitable betting and gaming industry should pay a fairer share towards the cost of UK's unmet needs".
Brown added: "Thanks to IPPR's report, we now know that taxing gambling more fairly would fully fund the first crucial step in the war we must wage against child poverty: ending the two-child limit and lifting the benefit cap." He said this would enable half a million children to be lifted out of poverty in this autumn's budget.
Government strategy delayed until autumn
The two-child limit restricts child tax credit and universal credit to the first two children in most households. The benefit cap sees the amount of benefits a household receives reduced to ensure claimants do not get more than the limit.
The Government is expected to publish a child poverty strategy in the autumn, with campaign groups demanding it must contain a commitment to abandon the two-child limit. These plans had been due for publication in the spring but were pushed back to coincide with the budget.
Former PM highlights poverty concerns
Critics say the delay means more children will be dragged into poverty in the intervening months. Brown has been taking part in a Government consultation on child poverty as ministers prepare to bring forward plans this autumn.
Writing in the Guardian, the former prime minister and chancellor said he sympathises with Rachel Reeves' "fiscal inheritance" but insisted there is "an urgent need to act" to tackle poverty. He added: "I have not seen such deep poverty since I grew up in a mining and textiles town where unemployment was starting to bite hard."
Tax increases proposed for gambling sector
The IPPR suggested increasing taxes on online casinos from 21% to 50% and raising those on slots and gaming machines from 20% to 50%. The organisation also proposed raising general betting duty on non-racing bets from 15% to 25%, bringing other sports in line with rates paid by horseracing.
Henry Parkes, principal economist at IPPR, said the gambling industry is "highly profitable" yet exempt from paying VAT and often pays no corporation tax. He noted many online firms are based offshore and argued it feels "fair" to ask the industry to contribute more given "stark and rising levels of child poverty".
Industry rejects proposals as reckless
However, the Betting and Gaming Council rejected what it called "economically reckless, factually misleading" proposals. A spokesperson warned the tax increases "risk driving huge numbers to the growing, unsafe, unregulated gambling black market, which doesn't protect consumers and contributes zero tax".
The council added that further tax rises would harm punters, jobs, growth and public finances, particularly following recent Government reforms that cost the sector over £1 billion in lost revenue. The IPPR maintained that raising gambling taxes as suggested would be unlikely to reduce overall Government revenue.
(PA) Note: This article has been edited with the help of Artificial Intelligence.
