Around half a million children could be lifted out of poverty through reforms to UK gambling laws, a leading think tank has found.
The Institute For Public Policy Research (IPPR) is urging the government to look at measures which could raise ÂŁ3.2 billion from changes to how gambling is taxed.
This would be the amount of funding needed to scrap the two-child limit and benefit cap, a new report from the group finds, which would lift 500,000 children out of poverty.
Eliminating these two policies would be “the most effective single step” the government could take to reduce child poverty, it adds.
Backed by former Labour prime minister Gordon Brown, the IPPR’s proposals focus on raising duties on online gambling firms, especially online casinos, slot machines, and high-stakes betting.
The think tank says harms are especially concentrated in this sector, with over 60 per cent of profits coming from just five per cent of users – many of whom are vulnerable.
Henry Parkes, principal economist and head of quantitative research at IPPR, said: “The gambling industry is highly profitable, yet is exempt from paying VAT and often pays no corporation tax, with many online firms based offshore.
“It is also inescapable that gambling causes serious harm, especially in its most high-stakes forms. Set against a context of stark and rising levels of child poverty, it only feels fair to ask this industry to contribute a little more.”
The findings come as the chancellor is under pressure to raises taxes at Labour’s upcoming autumn budget to address poor economic performance.
The government is facing an “impossible trilemma” caused by Labour U-turns, higher borrowing and sluggish economic growth, economists from the National Institute of Economic and Social Research (NIESR) said on Wednesday.
Its economists say the chancellor must look to raise ÂŁ51.1 billion at her upcoming fiscal event, arguing that both tax rises and spending cuts will be necessary to deliver the funds.
Treasury officials are reportedly already considering ways to raise taxes on the gambling sector, including simplifying the varying rates of duty applied to gambling products.
Lobbyists for the gambling industry have begun pushing back on these proposals, reports The Guardian, with representatives understood to have already outlined their objections to the Treasury and have reached out to Labour MPs and staff.
Lending his support the the IPPR’s recommendations, Gordon Brown said: “There are many reasons why the highly profitable betting and gaming industry should pay a fairer share towards the cost of UK’s unmet needs. Most important is that it would enable half a million children to be lifted out of poverty in this autumn’s budget, and so help to build our country for the next generation.”
A government spokesperson said: “We are consulting on bringing the treatment of online betting in line with other forms of online gambling to cut down bureaucracy – it is not about increasing or decreasing rates, and we welcome views from all stakeholders including businesses, trade bodies, the third sector and individuals.
“Every child – no matter their background – deserves the best start in life. That’s why as part of our Plan for Change our Child Poverty Taskforce will publish an ambitious strategy to tackle the structural and root causes of child poverty, and we are already investing £500 million in children’s development, expanding free school meals and ensuring the poorest children don’t go hungry in the holidays through a new £1 billion crisis support package.”
