9 August 2010

Yesterday David Cameron promised the government would tackle benefit fraud. Well, I’m all for that. Fraud is wrong, should be identified, stopped, and the perpetrators dealt with appropriately.

Benefit fraud, for example, has been estimated in the Annual Fraud Indicator (published January 2010) to be about £1 billion a year. That’s about 0.8% of all benefits payments. Cameron gives larger figures.

The fraud indicator sets out all the various fraud figures and how they are reached and how reliable they are.

Of course, illegal tax evasion (not legal tax avoidance) is estimated at about £7 billion a year (or £15 billion if ‘hidden economy’ and ‘criminal attacks’ are counted in, see page 14 of the fraud indicator). That’s very much more than estimated benefit fraud. The late Labour government didn’t take tax evasion seriously enough and the present Tory Libdem doesn’t either. It’s both technically easier and politically more rewarding to tackle fraudulent welfare claims than tax evasion.

The government should be more ambitious. Let’s have a determined effort to combat fraud, all fraud, including illegal tax evasion.