If you’ve ever opened a tabloid newspaper, chances are you’ll have seen headlines such as this staring back at you, exploding with venomous condemnation:
- Benefit scrounging couple who claimed to live apart busted by tyre tracks in the Snow. For 16 years the couple duped the taxpayer until suspicious fraud investigators decided to stake out Diane’s Nottingham home. (TheSun.co.uk)
- Benefits cheat who swindled £11k in ten months offers to pay it back – over 21 YEARS. Crooked Angela Reid, 37, stole the money by fraudulently claiming thousands in handouts. She offered to give back what she had stolen by paying just £10 a week. (TheSun.co.uk)
- A TRAFFIC warden gave tickets to hundreds of motorists while pocketing £7,000 disability benefit. Peter Hollifield, 57, raked it in after claiming it took him two minutes to stagger just ten yards with a walking stick. But a court yesterday heard how he covered FOUR MILES a day as he issued fines. (TheSun.co.uk)
You might get the impression from reading articles such as these with your Cornflakes each morning that there must be some hidden epidemic of fraudulent benefit claims taking place. A nationwide conspiracy to drain the pockets of middle-England. In reality, this relentless scaremongering has little basis in fact, and those featured in the tabloid press are indeed the highly-publicised exceptions to the rule. Surprising as it may be, just 1% of benefit fraud is fraudulently claimed:
“But 1%? Surely that can’t be right. I mean, googling up the words ‘benefit fraud’ will instantly obtain a crop of headlines like: ‘Benefit cheat netted £60,000’, ‘Disability benefit cheat filmed jazz dancing’, ‘Scarborough benefit c heat ordered to repay over £18,000’ and, best of all, ‘Glamour model exposed as benefits cheat after claiming £10,000 while working as a pole dancer’. To read those stories, you would come away with the impression that the entire doleite population of the UK is made up of clandestine salsa merchants and Tiger Woods wannabes.”
The false perception of widespread welfare fraud is given additional credence by it’s other, more high-profile advocates. Not the sleazy tabloids previously discussed, but our own politicians. George Osbourne’s spending review speech, delivered on the 20th October 2010, contained the following section, in which he quoted a figure of £5bn being lost annually to welfare fraud:
“Nor will fraud in the welfare system be tolerated anymore. We estimate that £5 billion is being lost this way each year. £5 billion that others have to work long hours to pay in their taxes. This week we published our plans to step up the fight to catch benefit cheats, and to deploy uncompromising penalties when they are.”
This begs the question: where on earth did Gideon get his figures from? Peter Obourne of the Daily Mail and fact-checking website Full Fact both called Osborne out on his inaccurate statement to the Commons and showed the £5.2bn figure consisted not solely of deliberate fraud but additionally, official and customer error. In reality, the total amount lost to benefit fraud comes to £1bn, as shown below:
Inaccuracies and corrections aside, you could argue that the damage to the public consciousness has already been done once these statements make the press. This kind of demonization has become part of a wider campaign by the right-wing to discredit those drawing state benefits, painting them as ‘scroungers’, undeserving of our empathy and more importantly, our tax revenue.
Whilst I’m not for one moment suggesting that perpetrators of crimes against the public purse should be allowed to get away with defrauding the system, pursuing benefit cheats represents the lowest of the low-hanging fruit when it comes to saving money, and I’d argue that there are far bigger fish to fry, a fact which many seem to be overlook, but one which I now wish to turn your attention to.
The Attorney General’s Annual Fraud Indicator report of January 2010 (the breakdown from page 7 is shown above) states that £30bn of fraudulent activity takes place each year in the UK, with benefit fraud accounting for just £1.1bn. Meanwhile tax fraud, which receives negligible coverage in the mainstream press, accounts for £15.2bn, just over half of the UK’s total fraud bill.
“All fraud is wrong and should be tackled, but benefit fraud accounts for less than 1 per cent of benefit spending and is dwarfed by the amount lost to tax evasion. If the government is serious about raising revenue it should put more resources into tackling tax evasion rather than using benefit fraud as a cover for swingeing cuts to genuine claimants.“
TUC Spokesman – Referenced on TaxResearch.org.uk
Looking again at these large amounts lost to tax related fraud and bearing in mind the £850bn banking bail out following the financial crisis of 2008, you can see why attempting to suggest that jobs can be saved and that the deficit can be substantially reduced by stepping up a crackdown on benefit claimants is pure fallacy. There’s also some excellent research from the Citizens Advice Bureau, demonstrating that as much as £16bn in benefits goes unclaimed by those legally entitled to it.
It’s a depressing fact that ever since William Beveridge paved the way for the modern welfare state with his 1942 report: ‘Social Insurance and Allied Services‘ (more commonly known as the Beveridge Report) the entire concept of distributing benefits to citizens in need has been under assault from those who campaign instead to further cut taxes for the wealthy, those who believe the invisible hand of the market can regulate the government functions, and those who in my opinion stand opposed to the elimination of Beveridge’s five evils of society: squalor, ignorance, want, idleness and disease. For the vast majority, claiming benefits is a last resort and in many cases it makes ‘the difference between poverty and absolute destitution’. It’s therefore vital that the welfare state is protected from attack by powerful corporate and political interests, before it becomes too late.
[Thanks to The Guardian for featuring this article in their Society Daily briefing for 12/01/2011.]