The Child Poverty Action Group (CPAG) yesterday condemned the coalition government’s decision to use ‘bounty hunters’ to tackle alleged benefit fraud.
The charity was commenting on prime minister Cameron’s plan to use credit rating companies to monitor people’s spending patterns on household bills and credit card spending.
CPAG Policy and Research Officer Gabrielle Preston said: ‘Whilst we recognise there is a need to minimise benefit fraud, it is currently at an all-time low (less than one per cent of claims).
‘Administrative problems and low take up remain a problem for families.
‘A recent Work and Pensions Select Committee report, Decision making and appeals in the benefits system, highlights “the desperate need for fairer and faster decision-making to improve benefit delivery and take up”.
‘The system’s complexity means £16bn is unclaimed by some of society’s most vulnerable people.
‘This initiative stigmatises the most vulnerable people and is likely to further reduce take up of much needed benefits and tax credits.
‘The National Audit Office believes at least £40 billion of revenue is lost every year due to a failure to collect tax revenues effectively.
‘Other estimates suggest the full loss may be over £100 billion per annum. The decision to focus on benefit rather than tax fraud is unfair, unjust – and makes little economic sense.
‘If the government is to meet its 2020 commitment to end child poverty, it must protect children whose parents are entitled to receive benefits and tax credits.
‘It is unacceptable for politicians to inflame stigma and discrimination against some of the most vulnerable people in the country.
‘The coalition should take a lead in challenging myths about people who rely on the welfare system.’
A TUC spokesperson said: ‘Benefit fraud accounts for less than one per cent of benefit spending and is dwarfed by the amount lost to tax evasion.
‘If the government is serious about raising revenue it should put more resources into tackling tax evasion, rather than using benefit fraud as a cover for swingeing cuts to genuine claimants.’
The Public and Commercial Services union said: ‘The focus on benefit fraud, when it is a small percentage of the money lost each year to tax evasion, exposes the true agenda of the Conservative-led coalition.’
Revenue and Customs estimates illegal tax evasion, mostly by big business, costs the UK economy £10bn a year, but research by the Tax Justice Network puts the figure closer to £70bn.
Added to this, the research reveals around £25bn a year is lost through tax avoidance and £28bn goes uncollected because HMRC does not have adequate staffing and resources following four years of job cuts.
The PCS also expressed concern that private sector credit reference agencies could be given access to information about people who claim benefits.
PCS general secretary Mark Serwotka said: ‘With its budget in June, the coalition government launched the biggest assault in living memory on the low-paid and unemployed, and ministers are trying to soften up the public for much worse to come in the autumn.’
