Thursday, 15 August 2013

The Curse of Benefit Fraud, or lack thereof

Ah, benefit fraud! ‘Tis one of the few issues on which Britain’s politicians and Britain’s people both stand in a united front. It is reviled. Those who fraudulently claim welfare are labelled scroungers; the workshy. It is widely assumed that a substantial percentage of welfare claimants are shiftless, lazy Chavs who spend their days feasting on McDonald’s and injecting heroin into their eyeballs at the taxpayer’s expense. We might as well slap black triangles on these scroungers and shove them into work camps. It is hard to imagine that there would be much opposition.

A January 2012 poll by the Trades Union Congress revealed that on average, people thought that 27% of the British welfare budget is claimed fraudulently. It’s not hard to see why. The tabloid press, most notably the Daily Mail, has nailed its colours to the mast of opposing benefit fraud. Consider this article from August 2013, when it claimed that “4000 jobless singletons” are all “raking in benefits worth more than £23,000”. 

Or consider this article from July on “Britain’s worst mother”, who raised her sons as gangsters and was still claiming £1,500 a month in benefits when she was caught. In the same month, when Labour floated the idea of seeing whether “economic and social rights can be put into law”, it was swiftly branded "the scroungers' charter".

An August 2010 article featured another scrounger and his family. Gary Bateman was unemployed, had fathered ten children, and received more than £30,000 a year in state handouts. He and his wife (who hadn’t worked for 19 years) received hundreds in benefits every month by claiming £20.30 for their oldest child and £13.40 for their children up to the age of 18. Bateman also claimed £89.80 a week in incapacity benefits for a bad back, despite being known for taking part in off-road motocross biking. And who can forget the ultimately tragic case of Mick Philpott  the father-of-seventeen who claimed more than £100,000 a year in benefits before burning down his home in an attempt to claim a bigger council house?

We can forgive the British public, therefore, for their belief that that 27% of the British welfare budget is claimed fraudulently. We can forgive them for demanding that the hammer of God be brought down on these scroungers, and of course, the government is only happy to oblige. It is one of the few areas in which it can salvage some nebulous popularity, and yet, it appears to be getting this wrong as well! The so-called “Bedroom Tax” is reviled as an attack on the poor.  Changes to disability benefit qualifications and the introduction of the Work Capability Assessment led to brain-damaged patients being declared fit for work by Atos. Others with terminal cancer, severe multiple sclerosis or Parkinson’s disease were declared fit for work and had their benefits stopped. Government statistics reveal that between January 2010 and January 2011, 10,600 sick and disabled people died within six weeks of their benefits having been ended. All in all, it’s a bit of a mess, and the public’s response to these failings is always the same: “Why are you doing this?! Just target the scroungers!” There are clearly so many of them, so it shouldn’t be difficult, should it?

Well, therein lies the problem: there aren’t actually that many of them. It’s not 27% of the welfare budget that’s claimed fraudulently. Going by the government’s own figures, it's only 0.7%. The Department of Work and Pensions claimed that fraudulent benefit claims in 2009 to 2010 amounted to around £1 billion. While this may seem like a lot, the Department of Work and Pensions entire budget in 2011 to 2012 was £174.3 billion (Budget 2011, page 6), of which a supermajority isn’t even spent on benefits, but pensions. Only 3% of the entire DWP budget is spent on benefits. In contrast, tax fraud is estimated to cost the Treasury between £97 billion and £150 billion a year,  or 8% to 12% of the nation’s GDP.

Thus, any attempt to reform the benefit system to target “the scroungers” is doomed to fail, simply because there aren’t enough of them to make significant savings. While a shiftless minority does exist, and should not be allowed to continue, any attempt to get at them through welfare reform will own ruin things for the honest majority. It would be better to deal with them on a case-by-case basis (perhaps as the Daily Mail reports them!), but this isn’t the bold action and quick savings that the public demand and politicians want to enact. Thus, the government’s only recourse is sweeping reforms, which produces the kind of horrifying effects already listed above. And before we criticise the government for these welfare reforms, we should remember one thing: we’ve been cheering them on all this time.

No comments:

Post a Comment