Full Breakdown
Labour MPs Push for Increased Gambling Taxes to Address Child Poverty
9/26/2025, 5:02:37 AM
Proposal Overview: Taxing Gambling to Lift the Two-Child Benefit Cap
More than 100 Labour MPs in the UK have urged Chancellor Rachel Reeves to implement significant tax increases on gambling companies as part of the upcoming Autumn Budget. This initiative aims to generate revenue to abolish the two-child benefit cap, a policy that restricts child tax credit and Universal Credit to the first two children in most families. The MPs argue that a targeted levy on online gambling products could provide a substantial financial resource to combat child poverty, which currently affects nearly one in three children in the UK.
Key Figures Behind the Initiative
The proposal is spearheaded by MPs Alex Ballinger and Beccy Cooper, both members of the All-Party Parliamentary Group on Gambling Reform. They, along with former Prime Minister Gordon Brown, have highlighted the need for a “polluter pays” approach to gambling taxation. The Institute for Public Policy Research (IPPR) supports this initiative, suggesting that increasing the Remote Gambling Duty from 21% to 50% and raising other gambling taxes could yield approximately £3.4 billion annually by 2030.
Financial Implications and Projected Benefits
The proposed tax increases include raising Machine Games Duty on cash-prize slots from 20% to 50% and General Betting Duty on sports betting from 15% to 30%. Proponents assert that these changes could lift around 500,000 children out of poverty by providing necessary funds to eliminate the two-child benefit cap. The MPs' letter emphasizes that online gambling operators, often based offshore, contribute relatively little to the UK economy despite their significant profits.
Criticism and Opposition
The Betting and Gaming Council (BGC) has voiced strong opposition to the proposed tax hikes, warning that they could harm the regulated gambling market, encourage illegal operations, and lead to job losses. The BGC argues that increasing taxes would push consumers towards unregulated platforms, which lack consumer protections and could ultimately reduce tax revenue. Industry representatives have also pointed to international examples, such as the Netherlands, where recent tax increases have led to a decline in gambling revenue.
Official Statements and Responses
Chancellor Rachel Reeves has acknowledged the calls for a review of gambling taxation, stating, “I didn’t need MPs or former chancellors to tell me to launch an inquiry into gambling taxation. I did that as Chancellor, and I’ll set out the plans on the taxation of gambling in my Budget on November 26.” Education Secretary Bridget Phillipson has described the two-child benefit cap as “spiteful” and indicated that its abolition is under consideration.
What's Next: Upcoming Budget and Political Momentum
As the Labour Party prepares for its conference in Liverpool, the issue of child poverty and the two-child benefit cap is expected to be a focal point. The child poverty taskforce, established by Prime Minister Sir Keir Starmer, is anticipated to recommend lifting the cap before the Budget. This political momentum may influence the Chancellor's decisions regarding gambling taxation and child welfare policies.
Verbatim Quotes
- “No child should grow up in poverty while gambling companies make record profits.” — Alex Ballinger, MP
- “Greg Knight, managing director of leading independent bookmaker chain Jenningsbet, said the "the whole industry would cease" if the mooted increases were applied to the retail sector.” — Greg Knight, Managing Director of Jenningsbet
- “ The Department for Work and Pensions said: “Every child, no matter their background, deserves the best start in life.” — Department for Work and Pensions spokesperson
In summary, the push for increased gambling taxes by Labour MPs reflects a broader strategy to address child poverty in the UK, with significant implications for both the gambling industry and social welfare policies.
