Gordon Brown said poverty was blighting the lives of Britain’s children as he called for ‘massively undertaxed profits’ of the gambling industry to be used to lift kids out of poverty
Gordon Brown has piled pressure on the Government to drive down child poverty by hiking taxes on gambling giants.
The Labour former Prime Minister said deep poverty was blighting the lives of Britain’s youngsters and warned some 5 million children will grow up “ill-fed, poorly clothed and badly housed” by the end of the decade. Mr Brown called for the “massively undertaxed profits” of the gambling industry to be used to lift half a million children out of poverty.
He threw his weight behind proposals from the IPPR thinktank to slap targeted tax hikes on highly profitable parts of the gambling industry – such as online casinos and slot machines. A Betting and Gaming Council spokesperson hit back at the call, saying it would hit ordinary punters and risk pushing people towards the black market.
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Over 60% of gambling profits come from just 5% of users, many of whom are at high risk of serious harm, including debt, mental health issues, family breakdown, and suicide, the report claimed.
The reforms could generate up to £3.2billion, which could fund scrapping the two-child limit and benefit cap – two policies blamed for driving up child poverty. It comes as the bosses of 15 charities signed a letter to Keir Starmer urging him to scrap the two-child limit to lift children out of poverty.
Writing in the Mirror, Mr Brown said: “With the public finances tight and children hungry, there is an obvious fix: raise the massively undertaxed profits of the gambling industry and put the proceeds to use to lift 500,000 children out of poverty.”
He said the UK’s tax rate on online casinos profits is lower than other Western countries, sitting at 21% compared to 40% in the Netherlands and 54% in Austria. In the US state of Delaware, the rate is 57%.
Remote gambling yields have risen by more than 40% in the past decade after inflation but remote gambling operators pay a fraction of their profits in tax, he said. The plan proposes hiking remote gaming duty for online casinos from 21% to 50%, and raising duty on slot machines from 20% to 50%. It also suggests hiking general betting duty on non-racing bets from 15% to 25%.
Mr Brown added: “Gambling will not build a brighter future for our children. But taxing it properly might just get them properly nourished. Decent clothes. A warm bed. And the full stomachs that let them fill their brains in school. Taxing the betting industry to support our children won’t be a gamble. It will be an investment in their future. One where everyone wins.”
The move would not apply to bingo, any lotteries or the horse racing industry.
The Betting and Gaming Council hit back at the proposals, saying they would “only hit ordinary punters”. A spokesperson said: “These proposals are economically reckless, factually misleading, and risk driving huge numbers to the growing, unsafe, unregulated gambling black market, which doesn’t protect consumers and contributes zero tax. BGC members contribute £6.8bn to the economy, generate £4bn in tax, while supporting 109,000 jobs.”
“Claims the UK taxes operators less than countries like the Netherlands ignores the reality, when the Dutch hiked taxes, their tax receipts are expected to fall, as more players shifted to the black market. “It’s also incorrect to suggest horseracing is taxed at a higher rate. General Betting Duty is 15 per cent across all sports. Conflating the separate Levy with tax is misleading, as the Levy goes directly back into racing to support the sport.
“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.”
Mr Brown’s intervention comes as a group of charities urged the PM to scrap the two-child benefit limit in the long-awaited child poverty strategy, expected in the autumn. The Tory policy, which was introduced in 2017, restricts claims for Child Tax Credit and Universal Credit to the first two children in each family.
Mr Starmer told MPs in July that he wanted to get child poverty levels down by the end of this Parliament. But the Government is not expected to spell out how it plans to deliver on this pledge until the child poverty strategy is published.
The letter, signed by major charities including Trussell, Save the Children and the Child Poverty Action Group, said: “Every day, the two-child limit pulls 109 more kids into poverty, punishing them for having sisters or brothers. After a year of careful inquiry, the government knows there is no route to reducing child poverty unless this policy is scrapped in full.”
Helen Barnard, director of policy and research at Trussell, said: “The government cannot deliver their promises to end the need for emergency food and reduce child poverty unless they scrap the two-child limit.”
She added: “We know that parents and their children are having to go without the essentials we all need to get by like food, bills and toiletries. Some parents coming to our food banks are telling us they are rationing their own food to ensure they can feed their children. This isn’t right.
“The Prime Minister must match the scale of his ambition on tackling poverty with the necessary action. There is no time to lose.”
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