Former Prime Minister Gordon Brown fired shots at the Betting and Gaming Council as he continues to pressure the Labour government to drop the two-child benefit cap.
The staunch denial of Grainne Hurst, BGC CEO, that gambling can cause social harms was brought back into the mainstream spotlight by Brown as he compared gambling tax rates to the much higher rates of alcohol and cigarettes.
“We tax cigarettes at 80%, we tax alcohol at 70%, but the online gambling tax is 21%. There is social harm done by gambling, people can get addicted, the Gambling Council is wrong to say there is no social harm.”
The BGC argument referenced by Brown was made during a heated Select Committee last month, where the gambling trade body’s case met a chilly reception from MPs.
Brown also appeared on Sky News, where he expressed: “I am confident that the two-child rule will be addressed. We’re waiting for Rachel Reeves’s budget, which I think will mention this.” Keir Starmer, I know, is personally concerned and interested in this.”
“So I’m hopeful that in the next few weeks we’ll see the kind of action that we’ve been talking about. “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.”
PM Keir Starmer was also on ITV this morning, giving the strongest clue possible that the two-child benefit cap will be scrapped.
The Prime Minister told ITV: “We won’t have to wait much longer, but I wouldn’t be telling you that 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.”
Brown backs sharp tax hikes
Brown has thrown his weight behind the proposals from the Institute for Public Policy Research, which has called for quite a significant rise in 50% tax on online and retail slots, rising from 21% and 25% respectively. The think tank estimates that this could raise an additional £1.88bn alone.
The pursuit of Brown isn’t the sole source linking a gambling tax to an end of child poverty. MP Alex Ballinger penned a letter that stated: “No child should grow up in poverty while gambling companies make record profits. Gambling harms are increasing, yet gambling is VAT exempt.”
The BGC has done its best to rally against tax increases in the UK, warning of potential black market growth and job losses as consequences.
“It is now clear these further tax rises are a direct threat to British jobs and economic growth,” Hurst remarked earlier today, following the publication of a BGC-commissioned study into the impact of taxation on other markets like the Netherlands and France.
“The figures speak for themselves – tens of thousands of jobs lost, billions diverted to the black market, and a possible £3bn hit to the economy. Tax raids like those proposed would mean fewer betting shops, casinos and bingo halls, fewer jobs, and a huge boost to the growing, unsafe gambling black market, while not raising anywhere near the tax claimed.”
A myriad of key UK operators – including Rank Group, Entain, evoke and Betfred – have also supported the BGC’s warnings about the unintended consequences of tax raise, while also joining Hurst in calling for ‘balanced regulations’.
Hurst warned: “These proposals would achieve the absolute opposite of that and undermine the very consumer protections that keep people safe by pushing customers towards the unregulated black market, where there are no safeguards, no tax receipts, no jobs, and no support for the sports we all love.”
iGaming Expert Analysis: A tough moment for the BGC in Westminster has come back to haunt the trade body as Brown did media rounds this morning. With the budget two weeks away, the two child benefit cap and gambling taxes sitting alongside each other in media headlines will be ominous reading for industry stakeholders still hopeful the government would be lenient with its take hikes on gambling.
