Why is the government launching yet another crackdown on benefit fraud when it accounts for just a fraction of the welfare budget?
The government has announced that benefit cheats are liable to face up to 10 years in jail if they are caught ripping off the system.
‘Benefit cheats face ten years in prison: Prosecutors told to treat them like bank fraudsters’, announced today’s Mail with barely suppressed glee.
Head of the Crown Prosecution Service Keir Starmer apparently said society was “hurting as a result of people taking advantage of the benefit system, and he would crack down on perpetrators”.
In truth, however, benefit fraud accounts for just a fraction of the welfare budget.
That isn’t to say there should be no attempt to reduce benefit fraud; but it’s a strange priority for the to government have if the goal is to genuinely save money.
The May 2013 estimates of fraud and error levels in the benefit system in Great Britain, published by the Department for Work and Pensions (DWP), found that just:
- 0.7 per cent, or £1.2bn, of total benefit expenditure is overpaid due to fraud;
- 0.9 per cent, or £1.6bn, of total benefit expenditure is overpaid due to claimant error;
- 0.4 per cent, or £0.7bn, of total benefit expenditure is overpaid due to official error.
This compares with an estimated £12 billion a year lost in the UK due to corporate tax avoidance. That money could pay for 25,000 nurses on a £24,000 a year salary for 20 years; could put 129,000 children through school; and would allow the government to give every pensioner an extra £65 a year.
In reality of course, the reason for today’s announcement is purely political: the government believes there are votes in ‘cracking down’ on benefit fraud.
And unfortunately, due to misinformation that’s probably true. Polling carried out by the TUC in January found that on average people thought that 27 per cent of the welfare budget was claimed fraudulently.
It would be curious to know how politically effective such a move by the government would be if people were a little better informed.
15 Responses to “Another ‘crackdown’ on benefit fraud, yet it accounts for just 0.7 per cent of welfare budget”
Herbie Destroys the Environmen
“What would you do? Gas them?”
I actually think they would. 10 years for benefit fraud is fascism in all but name anyway as far as I am concerned.
We have had MP’s expenses, the potential mass poisoning of the population with the horse meat scandal, LIBOR fixing and money laundering by banks, this on top of the inherent injustices of the system! And has anyone really faced anything approaching a severe sentence? Quite the opposite.
This will mean more vulnerable people put in more vulnerable situations. More sex abuse of young girls etc. But then those that get on their high moral horse when it comes to sex crimes against vulnerable children, will, with their second ugly face, decry these vulnerable people as a scourge on the nation and demand they are punished!
john richardson
by all means give the cheats ten years BUT FIRST LETS SEE THE MPS THAT CHEATED THEIR EXPENSES GIVEN TEN YEARS what is the difference i hope this government is voted out but our people are easilly conned by lies at a general election and i fear it could happen again
Cliftonella
It’s the same the whole world over
It’s the poor what gets the blame
It’s the rich what gets the pleasure
Ain’t it all a crying shame?
Simon
I’d be the last person to support this crackdown but it can’t be dismissed based on your figures alone. Fraudulent claims may amount to only £8.4 million but this doesn’t account for the broader economic cost of supporting people to fraudulently remain out of work. The economy loses out what they would have contributed through work as well as the cost of paying their benefits, not to mention the broader social costs associated with the lumpen-proletarian lifestyle.
Further, although far more is lost to tax avoidance than benefit fraud, that observation alone does not invalidate this policy. The issue (if we are concerned solely with minimising losses to the Revenue) is whether £1 spent on chasing up benefit fraud or £1 spent chasing up tax avoidance will net the greatest return.
Simon
I’d be the last person to support this crackdown but it can’t be dismissed based on your figures alone. Fraudulent claims may amount to only £8.4 million but this doesn’t account for the broader economic cost of supporting people to fraudulently remain out of work. The economy loses out what they would have contributed through work as well as the cost of paying their benefits, not to mention the broader social costs associated with the lumpen-proletarian lifestyle.
Further, although far more is lost to tax avoidance than benefit fraud, that observation alone does not invalidate this policy. The issue (if we are concerned solely with minimising losses to the Revenue) is whether £1 spent on chasing up benefit fraud or £1 spent chasing up tax avoidance will net the greatest return.