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Former Labour Prime Minister Gordon Brown has reiterated his call for increased taxes on the gambling industry, arguing that the revenue could lift half a million children out of poverty.
Mr. Brown has endorsed a report by the Institute for Public Policy Research (IPPR) suggesting the move could generate £3.2 billion to abolish the two-child limit and benefit cap.
Brown, who also served as Chancellor under Tony Blair, stated that taxing online casinos and slot machines would represent “the first crucial step in the war we must wage against child poverty.”
However, a spokesperson for the Betting and Gaming Council has challenged the proposals, characterizing them as “economically reckless” and warning of the potential for driving gamblers towards unregulated black market alternatives.
The Department for Media, Culture and Sport has been contacted for comment.
The two-child limit and benefit cap, impacting 1.6 million children, have been identified by anti-poverty campaigners as contributing to rising rates of food insecurity, with the removal of the cap considered the “single most effective” measure the Chancellor could take to alleviate child poverty.
The two-child limit restricts child tax credit and Universal Credit (UC) to the first two children in most households, while the benefit cap reduces the total benefits a household can receive.
With the government expected to release a child poverty strategy in the autumn, children’s charities and campaign groups have coalesced in advocating for the elimination of the two-child limit.
In an article published in the Guardian, Brown writes: “Britain is now enduring the worst levels of child poverty since modern records began, even worse than in the Thatcher-Major years, and far worse than in most European countries…”
“These are austerity’s children, the victims of 14 years of Tory rule, an era whose most vindictive act was to treat newborn third and fourth children as second-class citizens, depriving them of all the income support available to their first and second siblings.”
Highlighting the projected increase in child poverty to “a wholly unacceptable” 4.8 million, Brown is urging Chancellor Rachel Reeves to make “a straightforward budget choice” to raise taxes on online gambling companies to fund efforts to combat child poverty.
The proposals target online gambling firms, a rapidly expanding sector, while avoiding changes to bingo or lotteries.
The IPPR has suggested increasing taxes on online casinos from 21% to 50% and raising those on slots and gaming machines from 20% to 50%.
The IPPR report notes that many online gambling firms are based offshore, paying minimal or no UK corporation tax, and benefit from tax advantages, including a VAT exemption.
The IPPR contends that increasing gambling taxes in the manner proposed is unlikely to reduce overall government revenue.
Henry Parkes, principal economist and head of quantitative research at IPPR, stated: “The gambling industry is highly profitable, yet is exempt from paying VAT and often pays no corporation tax, with many online firms based offshore.”
“It is also inescapable that gambling causes serious harm, especially in its most high-stakes forms.”
“Set against a context of stark and rising levels of child poverty, it only feels fair to ask this industry to contribute a little more.”
However, a spokesperson for the Betting and Gaming Council said they rejected the “economically reckless, factually misleading” proposals which they insisted “risk driving huge numbers to the growing, unsafe, unregulated gambling black market, which doesn’t protect consumers and contributes zero tax”.
They added: “Further tax rises, fresh off the back of government reforms which cost the sector over a billion in lost revenue, would do more harm than good – for punters, jobs, growth and public finances.”
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