David Cameron has promised to crack down on benefit fraud, with what he calls an “uncompromising clampdown” on cheats. Harsher penalties and more prosecutions are promised as Cameron tries to look tough.
This is an attack that many governments have tried. Fraudsters are a convenient target and there are easy media headlines to be had. The Daily Mail will love it; to them most benefits claimants are simply scroungers.
No one would attempt to defend those who claim benefits they know they are not entitled to. But the position is more complicated than the Prime Minister makes it seem – and the methods he plans to use are controversial.
HMRC estimates that £1.46 billion was lost to fraud in the benefits system in the last financial year. That is a great deal of money, especially in the current climate. But with the total welfare bill running to £164.7 billion a year, it represents just 0.9% of the total.
And it is estimated that losses due to errors – mainly mistakes by the government’s own staff – totalled £3.74 billion last year. The National Audit Office has also estimated that around £1.3 billion of benefits that people are entitled to is not paid out each year; something that Cameron fails to mention.
So perhaps the Prime Minister should be looking first to ensure that those who administer the complexities of the benefits system do their job more accurately and more efficiently.
The controversial aspect of Cameron’s plans is the proposed use of private credit reference companies to track down benefit cheats. They will be paid “bounties” according to the number of bogus claimants they uncover.
Cameron has dismissed the fears of those worried about the prospect of snooping by a private company. This is strange for a coalition government that, rightly, scrapped Labour’s ID cards, in part because of civil liberties arguments. And the Liberals have long positioned themselves as a party of liberty – until they got the keys to government, apparently.
Anyone who has ever paid to see a copy of their own credit file from one of these agencies will know that the records these companies keep are often inaccurate, which could lead to claimants wrongly having vital payments stopped.
The Information Commissioner is also concerned and has demanded a meeting with ministers to discuss the plans in order to satisfy himself that the moves would comply with data protection legislation.
And civil liberties groups have warned against giving unregulated private companies such wide powers of investigation.
“Mining private data on a routine basis on the off-chance of catching people out is a disproportionate invasion of privacy,” said Alex Deane of Big Brother Watch.
And Liberty director Shami Chakrabarti said: “What we must not do is create a benefit equivalent of parking attendants who are wanting to find people guilty, wanting to find people suspicious because that is the way they get paid.”
Is this a legitimate method of reducing government spending? Or yet another ideological attack, with the private sector being paid to snoop on those claims benefits to satisfy the Tory right?
And where is the crack down on tax evasion and tax avoidance that also costs the country billions every year?
The Prime Minister should also know that the best way to reduce the welfare bill is to get more people into work – something that the economic policies of his government currently mitigate against.