Bums, thieves, cheats, scroungers.
Read enough stories about jobless parents of nine living in giant council houses complete with luxury parrots or single mothers with enough welfare money to buy their children twenty Christmas presents and it’s easy to start associating benefit claimants with such terms. Regardless of whether we claim ourselves or not, we might start to get the idea that “benefit bums” are a primary cause of the British economy’s continuing struggles. After all they’re living off the backs of hardworking tax payers aren’t they? However this idea only serves to keep the general public divided and the real thieves in business.
Today, Deputy Prime Minister, Nick Clegg backed the welfare system reforms which were accelerated in the wake of David Cameron’s claim that benefit fraud and error was “the one area of ingrained waste that outranks all others” two years ago. Since then, fraud investigators have been given a string of new powers including the ability to check bank accounts, satellite TV bills, and credit reference records. Some Councils have even utilised lie detector software which is said to analyse telephone calls from claimants for signs of stress in their voices.
The Government now spends £100million a year investigating benefit fraud and fraud convictions have increased by 40% over the past two years.
There’s also been a string of increasingly threatening adverts targeting “benefit cheats” with deep voiced narrators claiming to be “closing in” not to mention similarly themed billboards and sensationalist tabloid stories.
Unsurprisingly considering the Government/Media tide, public opinion toward benefit claimants has hardened according to a study conducted by NatCen, a social research group. The study which has tracked public opinion for thirty years, reported a new high in the percentage of people who believed that benefits were too high and actively discouraged work. 62% shared this view up from the 54% recorded last year.
Further, research conducted by the University of Kent on benefit stigma found that 20% of people believed that the majority of benefits were “falsely claimed” and that newspapers had made claimants feel as though others were looking down on them.
However, benefit fraud is not as big an issue as Politicians and tabloid newspapers may have us believe. Official estimates provided by the department for work and pensions (DWP) this year reveal that more benefit is underpaid than is overpaid due to fraud. According to the report only 0.7% (1.2bn) of total benefit expenditure is due to fraud which is balanced by the £1.3bn total of underpayments.
In the big scheme of things, benefit fraudsters appear to be little more than children stealing from the cookie jar. The real crimes lay elsewhere.
In spite of major public disapproval, £20billion was spent on the wars in Iraq and Afghanistan between 2003 and 2010, a figure former London mayor Ken Livingstone claimed would be the equivalent of scrapping university tuition fees for a decade.
Then consider the financial crisis of 2009 which led to £1trillion of taxpayers money going toward bank bailouts despite their own greed being the cause of their downfall.
In the midst of the major cuts imposed at least partly as a result of those bailouts, the UK Government still found £212 million to join NATO in the bombing of Libya last year.
Major corporations worth several billions including Google, Facebook , Starbucks and Amazon have for years exploited legal loopholes to avoid paying significant taxes despite their enormous sales. In total, these four American companies are reported to have paid just £30million in taxes over the last four years despite UK sales of more than £3.1bn. Apple, the world’s most valuable company, is believed to have avoided paying £550 million worth of tax in the U.K. last year alone.
Richard Murphy of the taxpayers alliance claims that the UK Government misses out on £120bn worth of tax through tax avoidance schemes.
However, while the Government united against benefit fraudsters and the welfare system in general, the reaction to tax evasion has been tempered despite it robbing the economy of much more.
Interviewed on BBC One’s Andrew Marr Show earlier today, London Mayor Boris Johnson said the tax issue was “a very difficult one” adding: “I cannot exactly blame the finance directors of these companies for doing their job.”
“Their salaries and livings depend on minimising the tax exposure obligations on their companies.”
According to the financial mail, one in four members of David Cameron’s Business Advisory Group avoids tax. These include Google Chairman Eric Schmidt who recently claimed that he “very proud” of Google’s tax structure and said the company was “proudly capitalistic”. The family of the Prime Minister himself are reported to have benefited through Mr Cameron’s fathers use of offshore accounts in tax havens.
The challenges the British economy faces are very real. The nations debt stands at over £1trillion and the treasury has not reported a surplus since the 2001/2 financial year. Although official unemployment statistics have seen a slight decrease, long term unemployment is on the rise and an increasing number of people are working part-time due to the lack of full-time opportunities. In addition, the cuts to public spending have and will continue to affect Health care, Education, local government and social sectors.
It is a fact that some people manipulate the welfare system for personal gain at the expense of taxpayers. However this is a reflection of the way the rich and powerful have behaved for centuries through manipulation of laws, trade agreements and policy’s which resulted in gains for them and their cohorts at the expense of ordinary people. Who gets benefits of the multi-billion dollar military contracts? Where does the bailout money really go? Would your business ever be deemed “too important to fail” or would you be in the bankruptcy line applying for benefits?
In such a climate, it is critically important to weigh all the evidence in order to chart a course that will rescue the UK from it’s dire economic state.