07-08-2025
UK hasn't seen poverty like this for 60 years, says Gordon Brown in call to scrap two-child benefit cap
Britain has not seen poverty this bad for more than half a century, Gordon Brown has warned, urging Sir Keir Starmer to scrap the two-child benefit cap at the next budget.
The former prime minister and Labour chancellor – who said 'we are dealing with a divided Britain' and a 'social crisis' - backed reforms to gambling taxes in order to generate the £3.2bn needed to scrap the cap.
Mr Brown said the gambling industry is 'under taxed', throwing his weight behind a report from The Institute For Public Policy Research (IPPR) which said that around half a million children could be lifted out of poverty through the reforms.
The two child benefit cap, which was imposed by Tory former chancellor George Osborne, prevents parents from claiming benefits for any third or subsequent child born after April 2017.
Speaking to BBC Radio 4's Today programme, the former Labour prime minister issued a stark warning about the state of Britain after 14 years of austerity under the Conservatives, urging the current government to take action.
'Look, we're dealing with a divided Britain. We're dealing with a social crisis. We're dealing with poor children that are living what you might say are separate lives… we're talking about children that are far from the mainstream, and something's got to be done', he said.
'This problem is getting worse. It's going to worsen over the next few years, because there's a built-in escalator in the poverty figures, because of the two-child rule.'
He added: 'I live in the constituency in which I grew up. I still live here. I see every day this situation getting worse, and I did not think I would see the kind of poverty I saw when I was growing up, when we had slum housing, when we had traveling people coming to my school.
'This is a return to the kind of poverty of 60 years ago, and I think we've got to act now, and that's why it's urgent that we take action in this budget to deal with the under taxed gambling industry, to pay for half a million children to come up.'
Speaking to ITV, he added: 'You cannot have a situation where under a Labour government, child poverty numbers just go up and up, and up.'
Sir Keir Starmer is thought to personally be in favour of scrapping the cap, but after a number of expensive U-turns and a new report from top economists warning that the chancellor is facing a £51bn black hole in the public finances, there are growing questions over how the prime minister would be able to fund such a move.
But Mr Brown urged the government not to 'leave unaddressed something that is a cancer in our society, which is children growing up and going to school ill clad and hungry.'
MPs from across Labour have repeatedly urged the prime minister to scrap or ease the limit amid growing concern over the direction of the party.
Critics of the policy say removing it would be the most effective way of reducing child poverty amid warnings that as many as 100 children are pulled into poverty every day by the limit.
However, it is thought that a decision on the cap won't be taken until the government publishes its child poverty strategy, which has now been delayed until the autumn.
Mr Brown said he understands that Rachel Reeves has 'inherited a very difficult fiscal situation, but warned: "At the budget the government has one straightforward choice: gambling will not build our country for the next generation, but children free from poverty will."
His comments came after an IPPR report urged the government to look at measures which could raise £3.2 billion from changes to how gambling is taxed, suggesting an increase on taxes on online casinos from 21 per cent to 50 per cent and raising those on slots and gaming machines from 20 per cent to 50 per cent.
The organisation also proposed raising general betting duty on non-racing bets from 15 per cent to 25 per cent which it said would bring other sports in line with the rates paid by horseracing.
The IPPR said raising gambling taxes like this would be unlikely to reduce overall government revenue.
But a spokesperson for the Betting and Gaming Council rejected the 'economically reckless, factually misleading' proposals which 'risk driving huge numbers to the growing, unsafe, unregulated gambling black market, which doesn't protect consumers and contributes zero tax'.
They added: '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.'
