If Gary Barlow had committed benefit fraud Cameron wouldn’t be so sympathetic

We should be a lot angrier about the antics of people like Gary Barlow than about purported benefit fraud.

Gary Barlowj

We should be a lot angrier about the antics of people like Gary Barlow than about purported benefit fraud

Imagine the reaction if someone had committed benefit fraud on the scale of former Take That star Gary Barlow’s purported tax avoidance? There would be near universal outrage. The Telegraph would be up in arms and the Mail would probably brand it a ‘shocking indictment of the welfare state’.

It’s true of course that benefit fraud is illegal whereas tax avoidance is technically not; but both ultimately result in there being less money available for the Exchequer to spend on things like schools and hospitals. And that means we all suffer as a result.

Indeed, the really striking thing about the Gary Barlow case – Barlow faces having to pay back millions of pounds in tax after a court ruled a partnership in which he invested was a tax avoidance scheme – is the double standard: David Cameron has rejected calls for the former Take That singer to lose the OBE he was awarded by the Queen in 2012; yet were we discussing benefit fraud the debate would likely be over how long the individual ought to spend in jail. 

The level of hypocrisy is worse when we consider just how much revenue is lost as a result of tax avoidance and compare it with that lost to benefit fraud.

Benefit fraud is certainly something that everyone should oppose; but it’s a drop in the ocean compared to the money lost by the government to tax avoidance. Department for Work and Pensions (DWP) figures from May 2013 found that just 0.7 per cent, or £1.2bn, of total benefit expenditure was overpaid due to fraud. This compares with £5bn a year that is lost through tax avoidance.

Corporate tax avoidance costs the exchequer even more, with an estimated £12 billion lost. In practical terms, this is money that could pay for 25,000 nurses on a £24,000 a year salary for 20 years. Alternatively, it could put 129,000 children through school or allow the government to give every pensioner an extra £65 a year.

Again, everyone should be angry about benefit fraud, but some perspective is clearly required: we should be a lot angrier about the antics of people like Gary Barlow, however famous they are.

The relentless media narrative which paints a picture of rampant benefit fraud is fostering huge public misconceptions about the welfare state. Polling carried out by the TUC in January last year found that on average people thought that 27 per cent of the welfare budget was claimed fraudulently. As already mentioned, the real figure is just 0.7 per cent.

Should Gary Barlow lose his OBE? You would think so. Yet the fact we are even asking such a question when someone may have willfully denied the treasury millions of pounds demonstrates just how far we are from have a sensible tax and spending debate.

8 Responses to “If Gary Barlow had committed benefit fraud Cameron wouldn’t be so sympathetic”

  1. Erdogan's Putty Face

    Thing is, you mention schools and hospitals – as if they were struggling for funding – but don’t mention all the other stuff taxes are used for; bombs, MP’s ludicrous expenses, ridiculous CPS trials for bullying the population, funds for quangos nobody needs or asked for etc
    Surely, a bit of fairness in your reporting is in order?

  2. Selohesra

    Ridiculous over reaction – would you object to Barlow avoiding tax from pension contributions or using his ISA allowance? If anyone should be punnished its the advisors who set up schemes that fall the wrong side of the regulations not those who enter them in good faith after advice from professional advisors.
    Is that all the left have to offer – politics of envy and hatred of success?

  3. Sparky

    As you correctly point out, benefit fraud is illegal, tax avoidance is not.

    Tax avoidance happens because people and companies seek to minimise their tax liabilities, within the law as it stands. That is a perfectly understandable motivation. No-one wants to pay more tax than they have to. It’s the same reason you have an ISA, Mr Bloodworth. It’s just a different scale.

    Tax avoidance is reduced when the tax authorities examine the law and close existing avenue for tax minimization. When this is done, accountants move on to find new ways to legally minimise the tax liabilities of their clients. It’s been going on for hundreds of years, all over the world. It’s the nature of the entire tax system.

    If there’s anyone at fault here, it’s the people who draft the tax legislation. If you draft the law poorly, then it will be full of holes to exploit.

  4. John

    Basically ‘write better laws’

  5. disgruntled

    I recently changed banks and my direct debit for the council tax didn’t get paid:
    You should have seen the letter the council sent me, telling me that they were going to take me to court because April’s payment hadn’t been paid (it wasn’t even the end of April when I got the letter).
    I HIT THE ROOF and came down the other side and the letter I sent them would have burnt their eyes out.
    When I got NO reply to the letter I sent: I went to see them and they said it was a standard letter they send to everyone and they have to send strongly-worded red letters for those on benefits.
    I said: it was utter disgusting that they had to threaten the poor in such a manner and said I notice there’s NO mansion taxes.
    My point us: you owe the govt a penny and you’re not a celebrity or mega-rich then you have to suffer and cough up. The unfairness seems to get worse across the class divide.

  6. Sparky

    Yes.

  7. GO

    “would you object to Barlow avoiding tax from pension contributions or using his ISA allowance?”

    No, because he’d be putting those allowances to their intended use – responding to incentives the government has put in place deliberately.

    “those who enter them in good faith”

    The whole point of the ruling against Barlow is that he was found not to have entered into the scheme “in good faith,” i.e. in the belief that he was putting a tax allowance to its intended use/responding to an intentional government incentive. He entered into it purely for the purpose of reducing his tax liability.

    What makes me puke is when these characters deprive public services of millions of pounds, then expect to be bathed in glory because they donate some fraction of that money to charity.

  8. Xerxes

    What’s the beef here. ISA = Tax avoidance. Bad legislation = Tax Avoidance. Leave a loophole and accountants will exploit it….it’s their job. Most of us would love to find a way of paying less tax.

Leave a Reply