Former PM Gordon Brown Refuses to Back Down in Gambling Tax Campaign to Address Child Benefit Cap

Former Prime Minister and Chancellor of the Exchequer Gordon Brown has reiterated his request for Rachel Reeves to impose a significant hike in gambling taxes to foot the bill to scrap the UK’s two-child benefit cap. Brown, who has been working as a consultant to the Labour Party, has been spearheading the campaign to end child poverty.

Influenced by a report published by the Institute for Public Policy Research (IPPR), Brown first weighed in on the argument in August. The IPPR had originally suggested that Remote Gambling Duty (RGD) should be raised from 21% to 50%, and Brown has refused to back down in his thoughts on gambling taxes.

No stranger to gambling reform

During his decade-long spell as Chancellor, Brown ushered in sweeping reforms to the UK’s gambling tax plan, and this entailed a betting duty on remote licenses. This equated to a standard 15% tax rate on gross profits.

Brown, under the premiership of Tony Blair’s New Labour government, played a key role in initiating reforms outlined in the 2005 Gambling Act, which modernised laws around remote gambling. At the time, Brown viewed his actions as vital to help boost UK economic productivity during the 2000s.

Footing the bill

There have been estimates that the government needs to raise around £3 billion to curb child poverty. The current figure of child poverty in the UK stands at 31%, representing an embarrassingly high figure for a country with the world’s sixth-largest economy based on Gross Domestic Product (GDP).

Reeves has already hinted that gambling companies need to pay their ‘fair share of tax’. However, Brown hasn’t held back by once again pushing for gambling taxes to go deeper to tackle child poverty, insisting companies should contribute to footing the bill.

Brown told Sky News:

“We tax cigarettes at 80%, we tax alcohol at 70%, but the online gambling tax is 21%. So there’s a big case for change.

“I think they [gambling companies] could well afford to pay a tax, and I want that money to go to child poverty. So, move the money from, if you like, the bad by taxing it. And put it to good, which is children taken out of poverty.”

Child benefit cap a serious sticking point

Scrapping the two-child limit on welfare benefits has dogged Labour. Within weeks of coming to power, the Prime Minister, Sir Keir Starmer, suspended two Labour MPs for voting in favour of the cap being discarded.

Strong feelings have been expressed on the issue. In September, more than half of the 235 Labour backbenchers co-signed a letter supporting a tougher approach to gambling taxes to lift children out of poverty.

Interestingly, a YouGov poll released over the summer canvassed opinions on the two-child benefit cap. 59% of those surveyed insisted the cap should be kept, while 26% believed it should be abolished.

Is the betting industry the fall guy?

There has been no getting away from the fact there is a £50bn black hole in public finances that needs filling. It is thought that the online betting industry, with its £1.49 bn of gross gaming yield (GGY), makes it an attractive target to pursue.

With the current Chancellor scrambling to make savings, increasing taxes is often inevitable. Tackling child poverty isn’t the only issue for the government to resolve, but while gambling taxes won’t be the silver bullet to fix all the problems, Brown wants to make himself heard loud and clear.

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