With the November budget imminent, at least 101 Labor Members of Parliament (MPs) have signed a petition in which they urged the Chancellor of the Exchequer, Rachel Reeves, to proceed with plans to increase the tax on the gambling industry, boosting revenue to the coffers and helping raise funds for families with more than two children, including addressing child poverty in the country.
More Labor MPs are seen in favor of a measure to increase gambling taxes
This is the latest show of support for the contentious proposal to increase tax on the industry and potentially raise £3bn in additional revenue for the coffers, something that trade groups have vehemently objected to, and said that the short-term benefits to the tax regime would be supplanted by the long-term drop in revenue.
The measure could also lift 500,000 children out of poverty. Gambling company bosses have already spoken about the impact that such an increase in the tax regime would have, with many agreeing that they would have to shutter hundreds of high street shops and put thousands of jobs on the chopping block.
While Paddy Power and Evoke are looking to shutter 57 and 200 betting shops respectively, Betfred’s owner, Fred Done, said that the entire brick-and-mortar fleet of 1,287 shops will have to go, leaving 7,500 people out of a job in the process.
Done is not delusional about the future of the brick-and-mortar sector, arguing that, at best, the segment has only a few decades left if the tax regime isn’t increased. In the face of such an increase, however, gambling companies will act sooner rather than later.
A sensitive topic likely to influence the Chancellor’s decision
The budget is due on November 26, and Reeves will be increasingly under pressure to decide on whether to increase gambling taxes. The BGC has said that every time the industry is squeezed with taxes, the black market is empowered and claws a larger share still of the total gambling that goes on in the UK.
However, the gambling tax hike is tied to a socially sensitive issue – the cap on child tax credit and universal credit, which is currently restricted to a family’s first two children for most people in the country.
To lift this cap, however, the government would need to have more money in the short run to bankroll the measure, which is why the expected £3bn windfall from an immediate tax increase on gambling is a very strong possibility.
