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A group of Labour MPs are calling for an increase in taxes on gambling companies to help alleviate child poverty in the UK. The petition, supported by 101 Labour MPs, suggests that a levy on gambling could generate £3 billion, which could potentially lift half a million children out of poverty. The push to raise taxes on the gambling industry is in response to the two-child benefit cap, which restricts benefits for families with more than two children.
Rachel Reeves, who is facing pressure from within her own party, including former Prime Minister Gordon Brown, is being urged to scrap the two-child benefit cap in the upcoming Budget announcement on 26 November. However, the UK’s Betting and Gaming Council argues that raising taxes on the industry could have negative consequences, such as billions being lost from the economy and potential job losses. Council head Grainne Hurst warns that imposing large tax hikes could push customers towards the unregulated black market, leading to unsafe gambling practices.
Following the 2024 general election, the Labour government is under scrutiny from its MPs to address the child poverty issue by removing the two-child benefit cap. While the government initially cited financial constraints for not lifting the cap, the Child Poverty Taskforce was established to explore ways to reduce child poverty. The delay in releasing the taskforce’s findings has only increased the calls for action from Labour MPs. Conservative leader Kemi Badenoch opposes lifting the cap, arguing that taxpayers should not have to fund unlimited child support for others.
In the face of a £20 billion shortfall in meeting tax and spending targets, the Chancellor is considering potential tax increases and spending cuts. The government is currently seeking to modernize the betting tax system by merging different taxes by October 2027 to accommodate the rise of online gambling. Suggestions from organizations like the Social Media Foundation think tank propose different tax rates based on the harm and economic contribution of various gambling sectors. Gordon Brown supports proposals to increase taxes on online gambling and slot machines, as put forth by the IPPR think tank
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