Later today, and throughout the rest of the week we will hear announcements from the UK Government about their plans for further reform on welfare, the crackdown on benefit cheats, and also how new rules for unemployed people claiming Job Seeker’s Allowance are about to get even tougher. We will no doubt hear, yet again, that the welfare state is unaffordable due to the growing number of people riding the wave of benefits, and that benefit fraud continues to be a massive issue for our economy and country.
Let’s have a wee look at fraud…
The total amount of fraud committed within the UK stands at approximately £73billion per year. Considering the UK is sitting on a current budget deficit of more than £91billion, it’s hardly surprising that the UK Government want to hold those responsible for that fraud to account. Naturally you would assume that they would want to go after those who are the biggest contributors to that fraud first, so obviously that’s why they’re cracking down on benefit cheats so harshly, right?
Well, erm, not quite…
Of the total amount of fraud committed within the UK (£73billion), the amount lost to those purposefully fraudulently claiming benefits and tax credits is estimated to be £1.6billion; that equates to less than 1% of the overall benefits and tax credits spend in total. In fact, more money is lost every year due to payment errors than is lost to fraudulent claims.
Tax evasion is estimated to cost the UK £35billion a year (not including the loss from aggressive tax avoidance schemes), this is obviously a much higher amount than that lost to benefit fraud – so why did HM Revenue & customs only spend £633,284 in a year trying to tackle the tax evasion issue worth over £35billion, whilst DWP spent £5million on an advertising campaign cracking down on benefit fraud worth £1.6billion in that same period?
I honestly don’t know either, but I would love to find out!
It’s quite obvious that benefit fraud, as bad as it is, is not the horrendous problem they would like us to believe.
“So if benefit cheats aren’t the problem, it must be those on Job Seeker’s Allowance, they’re all just too lazy to work! They’re the problem!”
Job Seekers Allowance accounts for only 3% of the UK Government’s total welfare spending – the fall of the economy and the rise of the deficit hardly rests upon the shoulders of the Job Seeker, no matter how much Iain Duncan Smith wants you to believe it.
Looking at the latest ONS figures I could find for unemployment, I found that unemployment for November 2013 – January 2014 stood at 2.33million (with 117,000 of those people having been made redundant) and that there were only 588,000 job vacancies available over that same period. The claim that there aren’t enough jobs is not an excuse, it’s a reality.
The new reforms on JSA which will be announced this week will make the application for unemployment benefit tougher. New applicants will have to show their commitment to finding a job before any money will be paid to them. This means that newly unemployed people (including those who are made redundant) will have to take a number of steps before any money will be released to them. I’m not entirely sure what these people will be expected to live on in the meantime, but hey! The good news is we have an increasing number of charity driven, non government funded, food-banks opening across the country so at least they won’t starve to death*
*Unless they end up like the poor soul Mark Wood who did starve to death after his benefit money was cut in March 2013.