Rachel Reeves signalling she is prepared to slap a tax hike on Britain’s booming gambling industry.

The Chancellor said there was “a case for gambling firms paying more,” insisting they should “pay their fair share” to the Treasury.

Her remarks come amid growing pressure on the Government to find the £3.2billion needed to scrap the policy that limits benefits to a family’s first two children – a measure campaigners warn has driven hundreds of thousands into poverty.

The idea of using gambling revenues to pay for the reform has been pushed by the influential Institute for Public Policy Research (IPPR), which argues that sharply higher levies on online casinos, slot machines and non-racing bets could raise the required sum.

Crucially, the plan has won the backing of former Labour Prime Minister Gordon Brown, who has made child poverty one of his defining causes since leaving office.

He has repeatedly argued that the cap is “morally indefensible” and has urged ministers to embrace gambling tax rises as a credible way to end it.

The IPPR proposals include lifting the duty on online casinos to 50% from the current 21%, increasing the levy on slots and gaming machines to 50% from 20%, and raising the rate on sports bets other than horse racing from 15% to 25%.