- Media
- News
Lucy Powell wants gambling to foot the bill for child poverty
Lucy Powell, the Manchester Central MP vying to succeed Angela Rayner, has proposed a radical move: raise taxes on gambling firms to pay for scrapping the controversial two-child benefit cap.
Powell says Labour must be “clear that our objective is to lift children out of poverty” and she argues that the betting and gaming sector should be tapped to cover the estimated £3.2bn cost.
It’s a striking suggestion. The gambling industry already pays hefty levies, faces tighter regulation than ever, and has spent the past few years scrambling to demonstrate its commitment to safer play. Yet Powell, citing former PM Gordon Brown’s backing of an Institute for Public Policy Research (IPPR) report, wants the industry to bankroll Labour’s anti-poverty mission.
The IPPR numbers are stark: reforming gambling levies could generate the billions needed to ditch the cap, potentially lifting half a million children out of poverty. For Powell, that makes gambling the perfect political target – profitable, highly visible, and, in the eyes of many, still morally ambiguous.
Her rival, Education Secretary Bridget Phillipson, has also signalled she’d axe the cap if elected deputy leader, calling it “spiteful” and “punitive.” But Powell’s framing is different: she’s not just pledging to end the cap, she’s planting a flag on how to pay for it.
That distinction matters. For an industry already wary of creeping taxation and political point-scoring, Powell’s intervention is a red flag. Gambling is a £12bn sector that employs tens of thousands and contributes significantly to the Treasury. Hitting it again, and branding it the piggy bank for welfare reform risks reinforcing the narrative that betting firms are fair game whenever the government needs cash.
It also lands awkwardly for Labour. Chancellor Rachel Reeves has been criticised for planning to appear at a corporate event hosted by the gambling industry’s top lobbyist, even as the Treasury reviews sector taxation. Powell’s timing, therefore, is no accident: she’s positioning herself as the “independent” candidate, unafraid of difficult conversations, and willing to stand apart from the Starmer-aligned camp.
The big question for operators is whether this rhetoric becomes real policy. Prime Minister Keir Starmer has so far refused to rule out ending the cap, but he’s equally avoided committing to it. For now, Powell’s pitch is part of a leadership contest. But if the IPPR’s proposals gain momentum inside Labour, the industry could soon face a renewed push for higher levies, regardless of who wins.
For players, the debate will feel distant. For operators, Powell’s move shows that the gambling industry is often among the first targets for taxation.
