Billionaire John Caudwell, a key ‘business ally’ of PM Sir Keir Starmer, has openly voiced support for the Labour government to significantly ramp up taxes on UK gambling activities.

The founder of Phones 4u expressed on Twitter (X) that Labour should follow through with tax proposals endorsed by former PM Gordon Brown. Caudwell argued that higher gambling taxes were appropriate given the “polluting nature” of the sector, which he claims generates vast social costs that outweigh its economic contributions.

With the Labour government yet to settle on the terms of its Autumn Statement, Brown wrote an open letter to Chancellor Rachel Reeves instructing the Treasury to implement a ‘targeted strike’ on the gambling industry.

The former PM advised Reeves to adopt proposals from the Institute for Public Policy Research (IPPR), which called for a sharp rise in duties on remote gambling from 21% to 50%. Further increases would elevate machine gaming duty to 50% and general betting duty (sports bets) from 15% to 25%—with provisions excluding horseracing wagers.

Brown urged Reeves to ignore industry pushback, insisting that gambling tax reform was the logical step to fund Labour’s pledge to reduce child poverty. According to IPPR estimates, such increases could raise an additional £3.2bn annually, lifting around half a million children out of poverty.

While Caudwell has been vocal in his backing of the proposals, he is not listed as a Labour donor. Instead, he was a long-standing supporter of the Conservative Party before dramatically switching allegiance at the 2024 General Election, voting Labour for the first time. At the time, he criticised the Conservatives for losing their way on economic discipline and failing to win the confidence of the business community.

His actions were seen as a symbolic victory for Sir Keir Starmer, marking a broader shift in support from parts of the UK’s business elite towards Labour. Caudwell’s intervention on gambling tax has further cemented his role as one of the most high-profile business figures backing the government’s economic direction.

Yesterday on Twitter, Caudwell openly expressed that a “hugely damaging gambling sector” should face its polluter tax, urging Chancellor Reeves to adopt former PM Brown’s toughest measures.

The intervention has sharpened tensions as the Autumn Budget Statement nears, with the gambling industry pushing back hard against the prospect of steep duty increases.

In the comment section of The Sun, under the headline “Three-quarters of punters say betting is key to British culture amid new tax threat”, readers warned that higher taxes risk driving betting further underground. The poll suggested that three in four punters view gambling, whether on sports, racing or bingo, as part of Britain’s cultural identity.

BGC CEO Grainne Hurst reinforced the association’s viewpoint in the article, stating: “Punters are clear, betting is not just a leisure activity, but a valued and long-standing part of Britain’s cultural and sporting landscape.

“From casinos to bingo, horseracing, football, rugby league, darts, and snooker, millions of adults enjoy betting safely and responsibly each month.

“BGC members are proud to support jobs on the high street, invest in local communities and grassroots sport, and contribute billions in taxes to fund essential public services.”

Concerns over how far to push gambling taxes have already divided political ranks across all parties. Within Labour, Gordon Brown and business allies such as John Caudwell are pressing for a sharp escalation, while MPs representing racing constituencies remain wary of the impact on jobs and heritage.

A Racing Post survey found that among 23 Labour MPs in areas with racecourses or training centres, only six responded to inquiries — some backing modest tax harmonisation, which would lift betting duty from 15% to 21%, and others offering only non-committal responses.

In opposition, the Conservative Party remains split between calls for complete overhaul of regulation led by Sir Iain Duncan Smith and concerns over taxes impacting rural communities as stated by Kemi Badenoch.

With the Budget expected by late October or early November, Reeves has so far shed no insights on her tax strategy. The Treasury has only confirmed that gambling duties remain under active review, alongside wider reforms to council tax, pensions relief, and high-value property.