Labour Government Faces Pressure to Raise Gambling Taxes Amid Economic Challenges
Published 6 August 2025
Highlights
- Former Prime Minister Gordon Brown urges Chancellor Rachel Reeves to increase gambling taxes to address child poverty.
- The Labour government is preparing for potential tax rises in the upcoming autumn budget, expected in November.
- The Betting and Gaming Council warns that increased gambling taxes could drive gamblers to the black market.
- The Bank of England cautions that high interest rates may persist due to inflation pressures.
- Labour leaders are strategizing to manage a £41.2bn deficit while avoiding surprises that could unsettle markets.
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Rewritten Article
Title: Labour Government Faces Pressure to Raise Gambling Taxes Amid Economic Challenges
As the UK prepares for a challenging autumn budget, former Prime Minister Gordon Brown has called on Chancellor Rachel Reeves to consider increasing gambling taxes to alleviate child poverty. Brown, who served as chancellor under Tony Blair, argues that the gambling industry remains "undertaxed" and that higher levies could generate an additional £3.2 billion annually. This revenue could potentially fund the removal of the two-child benefit cap, a policy that limits child tax credit and universal credit to the first two children in most households.
Economic Context and Government Strategy
The Labour government, led by Prime Minister Keir Starmer and Chancellor Reeves, is bracing for a difficult budget season. With the budget expected in November, the government faces a £41.2 billion deficit and must navigate sluggish economic growth, rising unemployment, and persistent inflation. The Bank of England has warned that interest rates may need to remain high to combat inflation, further complicating the economic landscape.
Gambling Taxes Under Scrutiny
The proposal to raise gambling taxes has sparked debate. While Brown and the Institute for Public Policy Research support the idea as a means to address social issues, the Betting and Gaming Council cautions that such a move could drive gamblers to the black market. Reeves, while acknowledging the need to address child poverty, has not committed to specific tax policies, stating that decisions will be revealed in the autumn budget.
Labour's Approach to Economic Reforms
In preparation for the budget, Reeves and Starmer have been holding meetings to outline their economic strategy. Despite pledges not to increase income tax, national insurance, or VAT, the government is exploring other avenues for revenue. Last year, Labour faced criticism for a surprise increase in employer national insurance contributions, highlighting the importance of transparency in fiscal planning.
Looking Ahead
As Labour leaders continue to refine their budget plans, they aim to balance necessary reforms with market stability. The upcoming budget will be a critical test for the government, as it seeks to address immediate economic challenges while laying the groundwork for long-term structural improvements.
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Scenario Analysis
The Labour government's approach to the autumn budget will be closely watched, with potential implications for both the economy and public welfare. If gambling taxes are increased, it could provide much-needed funds to address child poverty, but may also face resistance from the gambling industry. The government's ability to manage the budget deficit and inflation will be crucial in maintaining economic stability. Experts suggest that clear communication and strategic planning will be key to avoiding market disruptions and ensuring public support for any proposed reforms. As the budget date approaches, the government's decisions will likely shape the political landscape and influence public perception of Labour's economic competence.
As the UK prepares for a challenging autumn budget, former Prime Minister Gordon Brown has called on Chancellor Rachel Reeves to consider increasing gambling taxes to alleviate child poverty. Brown, who served as chancellor under Tony Blair, argues that the gambling industry remains "undertaxed" and that higher levies could generate an additional £3.2 billion annually. This revenue could potentially fund the removal of the two-child benefit cap, a policy that limits child tax credit and universal credit to the first two children in most households.
Economic Context and Government Strategy
The Labour government, led by Prime Minister Keir Starmer and Chancellor Reeves, is bracing for a difficult budget season. With the budget expected in November, the government faces a £41.2 billion deficit and must navigate sluggish economic growth, rising unemployment, and persistent inflation. The Bank of England has warned that interest rates may need to remain high to combat inflation, further complicating the economic landscape.
Gambling Taxes Under Scrutiny
The proposal to raise gambling taxes has sparked debate. While Brown and the Institute for Public Policy Research support the idea as a means to address social issues, the Betting and Gaming Council cautions that such a move could drive gamblers to the black market. Reeves, while acknowledging the need to address child poverty, has not committed to specific tax policies, stating that decisions will be revealed in the autumn budget.
Labour's Approach to Economic Reforms
In preparation for the budget, Reeves and Starmer have been holding meetings to outline their economic strategy. Despite pledges not to increase income tax, national insurance, or VAT, the government is exploring other avenues for revenue. Last year, Labour faced criticism for a surprise increase in employer national insurance contributions, highlighting the importance of transparency in fiscal planning.
Looking Ahead
As Labour leaders continue to refine their budget plans, they aim to balance necessary reforms with market stability. The upcoming budget will be a critical test for the government, as it seeks to address immediate economic challenges while laying the groundwork for long-term structural improvements.
What this might mean
The Labour government's approach to the autumn budget will be closely watched, with potential implications for both the economy and public welfare. If gambling taxes are increased, it could provide much-needed funds to address child poverty, but may also face resistance from the gambling industry. The government's ability to manage the budget deficit and inflation will be crucial in maintaining economic stability. Experts suggest that clear communication and strategic planning will be key to avoiding market disruptions and ensuring public support for any proposed reforms. As the budget date approaches, the government's decisions will likely shape the political landscape and influence public perception of Labour's economic competence.
