UK Prime Minister Sir Keir Starmer has given the biggest indication yet that there will be a hike in gambling tax rates in this month’s Budget, due to be delivered by Chancellor Rachel Reeves on November 26.
The revision of gambling tax levies has been touted as the ideal way of funding Labour’s plans to tackle child poverty.
There have been submissions from think tanks that support the idea and former Labour Prime Minister Gordon Brown has been a very vocal advocate of raiding the gambling industry to finance the social measures.
The reaction from industry big-hitters has understandably been doom-ridden, with Flutter-owned Paddy Power saying their recent shop closures could be the first of many for the UK betting trade, while Fred Done, Chairman and co-founder of Betfred, fired a warning that 7,500 jobs would be at risk if gambling tax rates increased.
What Did Sir Keir Starmer Say?
Both Sir Keir Starmer and Gordon Brown have featured in television interviews this week to discuss the issue of tackling child poverty and, in Brown’s case, how the measures should be funded by raising tax levies on the gambling industry.
The Prime Minister appeared on ITV’s Lorraine on Tuesday and added fuel to the fire by hinting that a plan to axe a two-child benefit cap in the Budget was a certainty, leading to the thought that the gambling tax increases will inevitably follow.
“You won’t have to wait much longer to see what the measures are,” he said.
“Some of them are already in place, the free school meals, the breakfast clubs, the free childcare, are all part of it, but look, we need to do more than that.
When quizzed about the possibility of scrapping the two-child limit on benefits, he said: “I wouldn’t be telling you we’re going to drive down child poverty if I wasn’t clear that we will be taking a number of measures in order to do so.”
Why Should The Gambling Industry Pay?
Chancellor Rachel Reeves has been tasked with finding the £3 billion that would allow Labour to scrap the two-child benefit cap.
It has been estimated that abolishing the cap would lift around 350,000 children out of poverty and provide vital support for 800,000 children whose families would still be living in poverty despite the increase in benefit.
The move has become a key issue for the government and raising gambling levies has been touted as an ideal way of generating the extra funds needed.
Both the Institute for Public Policy Research and the Social Market Foundation have proposed the idea and Gordon Brown has been very vocal in his support of a strategy to tax ‘harmful’ industries to pay for social causes.
There has been a huge swell of opposition from all corners of the gambling industry.
In October, British horseracing united as 363 leading figures signed an open letter asking the Chancellor for a tax rethink.
There is some suggestion that it may have worked as racing is not now thought to be included in any proposed tax rises and that online gambling is more the target.
At the start of this week, the UK Betting & Gaming Council (BGC) issued a report saying a betting tax hike could see businesses struggle to compete in the face of sharply increased operating costs.
Gordon Brown Targets The Gambling Industry
Brown served as Labour Chancellor for a decade from 1997 and has been seen on several TV channels already this week, but unlike the Prime Minister he has been happy to put the gambling industry in the government’s crosshairs.
On Monday he did a whistle-stop tour of morning TV shows to give momentum to the idea.
Speaking on ITV’s Good Morning, he took the opportunity to point the finger at the performance of BGC officials at a recent Treasury Committee meeting, which had been called to discuss the potential tax rises.
During that meeting, BGC Chief Executive Officer Grainne Hurst had refused to accept that gambling created social problems.
That stance drew criticism from the Treasury Chair Dame Meg Hillier MP, who said that she was ‘flabbergasted’ by that view.
Brown highlighted the disparity in tax levels for what he considers to be harmful products such as cigarettes, alcohol and gambling, and admonished the BGC.
“The government had a consultation on child poverty and I contributed to that,” he said.
“The government has not made its mind up on that and I hope they’ll do what I’m suggesting.
“Gambling, they’ve had a consultation on that as well.
“If you think of gambling, we tax cigarettes at 80%, we tax alcohol at 70%, we tax online gambling at 21%.
“Now there is social harm done by gambling, people can get addicted, the Gambling (sic) Council has been wrong to say that there is no social harm.”
He also appeared on Sky News breakfast show Mornings with Ridge and Frost and outlined why he was confident that the two-child benefit cap would change and be funded by new tax levies on the gambling companies.
“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,” he said.
“I think they 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.”
