Former Labour PM Gordon Brown publicly backs calls to raise gambling taxes

Former Labour prime minister and chancellor Gordon Brown has publicly backed proposals to raise gambling taxes as a way to address a "social crisis" in Britain, with a growing need to take children out of poverty.

Brown argued the revenue could be used to lift benefit restrictions, including scrapping the two-child benefit cap and the overall benefit cap, the BBC reported. The plan, put forward by the Institute for Public Policy Research (IPPR), would generate an estimated £3.2 billion (US$4.29 billion) a year.

Brown, speaking to BBC Radio 4, said he was not trying to act as a “backseat driver,” but added: "I'm trying to help the government by saying, here are positive, constructive suggestions.” He acknowledged that Chancellor Rachel Reeves faces intense pressure on the public finances.

Writing in The Guardian, Brown said: “Gambling levies aren't the only source of revenue that could pay to alleviate child poverty. But this should be one straightforward Budget choice. The government can fulfil today's unmet needs by taxing an undertaxed sector."

The IPPR’s proposal targets the booming online gambling industry, which it says enjoys “unique” tax advantages—most notably, exemption from VAT. Many online firms are based offshore and contribute little or no UK corporation tax, backers of the tax hike further argue.

Under the IPPR’s plan, tax rates on online casinos would rise from 21% to 50%, while those on slot machines and gaming terminals would increase from 20% to 50%. Bingo and lottery products would be excluded from the changes. The IPPR said raising gambling taxes in this way would be unlikely to reduce overall government revenue.

However, the Betting and Gaming Council strongly criticised the recommendations, calling them “economically reckless” and “factually misleading.” A spokesperson warned the move could drive gamblers toward unregulated black market platforms, which pose risks to consumers and generate no tax revenue.

“Further tax rises, fresh off the back of government reforms which cost the sector over a billion in lost revenue, would do more harm than good - for punters, jobs, growth and public finances,” a spokesperson said.

In his BBC Radio 4 interview, Brown also raised the idea of sharing the financial burden of increased defence spending with NATO allies. He suggested the creation of a NATO defence fund or the use of jointly-issued debt, which he said could “create the kind of headroom that Rachel Reeves needs.”