Labour should consider gambling tax rise to fund axing two-child cap – Powell

The Government should consider raising taxes on gambling firms to cover the cost of lifting the two-child benefit cap, Labour deputy leadership candidate Lucy Powell has suggested.

The Manchester Central MP, who is competing with Education Secretary Bridget Phillipson to succeed Angela Rayner, also said the public was “exasperated” because of “some mistakes” Labour has made in office.

She said the party had to “give a greater sense of who we’re fighting for” including by being “clear that our objective is to lift children out of poverty” by axing the two-child benefit limit.

Her rival Ms Phillipson has said that abolishing the “spiteful” cap is “on the table”.

The policy was announced in 2015 by the then-Conservative government and restricts child tax credit and universal credit to the first two children in most households.

Writing in The Mirror, Ms Powell said: “I want us to be clear that our objective is to lift children out of poverty and that will mean we need to lift the cap.

“Gordon Brown has set out ways of raising money from gambling firms which should get careful consideration.”

Former prime minister Mr Brown recently backed a report from the Institute for Public Policy Research which said reforms to gambling levies could generate the £3.2 billion needed to scrap the two-child limit and benefit cap.

The think tank’s research said scrapping the policies could lift half a million children out of poverty.

Ms Powell, who was sacked as Commons leader in Sir Keir Starmer’s recent reshuffle, sought to differentiate herself from Cabinet minister Ms Phillipson, seen as Downing Street’s choice for the deputy leader position.

“I’m not afraid to have difficult conversations when we need to change course,” she wrote, adding: “I would be a strong independent choice for Deputy Leader”.

She also wrote: “After 14 more years of the Tories again, I couldn’t have been prouder of getting a Labour government last year. But I know that people have been exasperated because of some mistakes we’ve made, and delivering change can sometimes be slow.”

She said that “despite our early achievements, this Labour story hasn’t been heard loud enough”, and “we’ve got to give a greater sense of who we’re fighting for”.

Ms Phillipson on Friday said scrapping the cap was “on the table” in the battle against child poverty.

Describing the issue as “profoundly personal”, she said she wanted a “mandate to go further” as deputy leader and “make tackling child poverty the unbreakable moral mission of this Labour Government”.

Her intervention suggests an increasing willingness in the Cabinet to abolish the cap, given she is seen as No 10’s pick for the deputy leadership.

Prime Minister Sir Keir has not committed to axing the limit, but he has consistently declined to rule it out as well.

Ms Powell and Ms Phillipson both passed the threshold to make it on to a ballot of Labour members on Friday thanks to trade union support and nominations from constituency Labour parties (CLPs).

Having secured the backing of at least 80 MPs, candidates for the deputy leadership needed to then gain support from either three Labour affiliate groups, including two trade unions, or 33 CLPs.

Ms Phillipson and Ms Powell will take part in a hustings on the last day of Labour’s annual conference in Liverpool before members vote in October.

The winner of the deputy leadership contest will be announced on October 25.