The Benefit Fraud Penalty: A Prejudiced Punishment

kamsandhu —  September 19, 2013 — 1 Comment

The Crown Prosecution Service have announced that they will push for increased penalties for benefit fraud, with maximum sentences reaching ten years in jail. In a sudden move, Keir Starmer, Head of the Crown Prosecution Service apparently said that society was “hurting as a result of people taking advantage of the benefit system, and he would crack down on perpetrators.”

However, benefit fraud is NOT increasing which makes this move far more dubious and unnecessary. This story has once again inflamed a public slamming of benefit claimants, and the hard line will certainly have an effect on the voting public.

Image: Join Public Issues

Image: Joint Public IssuesTeam

Fraud currently accounts for 0.9% of benefits expenditure, equalling £1.2bn.

1.2% of benefit expenditure is paid out in overpayment error by the claimant or by the DWP. Thus, more money would be saved if the DWP ensured that all claims were simply paid correctly, but there seems to be no hard line taken against this.

The Joint Public Issues Team believe that a quarter of media coverage of welfare refers to fraud. Earlier this year, a TUC poll revealed that members of the public thought 27% of the welfare budget was lost to fraud, when it actually stands at 0.9%. The press bombardment of welfare ‘moral panic’ has implied that there is a real culture of fraud and criminality amongst benefit claimants – ultimately turning the public opinion against them. Taking a hard line against the faux-criminal persona put upon claimants, could provide a strong political move by government as we edge closer to the election period. And the press have relayed the message to the extent that the public believe in this charade.

The press, the government and Keir Starmer QC have failed to supply the facts above. They have failed to mention how rare benefit fraud is. They have failed to mention that the figure for benefit fraud is dwarfed by the figure for unclaimed benefits, which stands, according to the DWP, somewhere between £7.5bn – £12bn.

This figure is further dwarfed by the amount lost to tax avoidance and tax evasion. Yet, the CPS has taken no such ‘hard line’ here. HM Revenue and Customs estimate the amount lost to tax avoidance and evasion at £32bn. The European Union estimate £95bn.

In the below graph, the fraud figures from the DWP of £1.2bn have been added to the HMRC figures for Working Tax Credit and child benefit fraud (equalling £870m – rounding to a total of £2bn):

Image: Fact Check C4

Image: Fact Check Blog – Channel 4

The move to increase the penalty for those committing benefit fraud is a prejudiced attack on the poor. Because CEOs, bankers and companies walk free of penalties for money fraud worth millions and sometimes billions, but the government want us to see benefit claimants found guilty of committing fraud for tens, hundreds, thousands of pounds as dangerous and as criminally punishable as violent offenders, rapists and murderers, who are likely to receive similar or less severe jail terms.

Richard Murphy, author and manager of the blog Tax Research, commented on the new laws:

“Tax fraud is now subject to maybe 400 prosecutions a year. The penalties are small. But ten years is being threatened for benefit fraud. The publicity, the sentences and the messaging is all disproportionate and the allocation of resources is all wrong.

“Tax evasion is the cancer really causing a crisis in the UK, undermining fair competition, destroying trust, eroding professional standards, fuelling austerity, driving misery and denying our children a future. But it’s benefit fraud that is picked on. That’s warped logic if ever there was evidence of such thinking.”

There must be punishment for breaking the law – few would disagree. But when a law is changed to persecute and punish an entire section of society, whilst another group are immune from the same laws, it is a smear against our justice system. And when the PR of party politics runs over into the laws and punishment of society, we are reaching a very worrying stage indeed.

by Kam Sandhu @KamBass
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  1. Media: Maintaining Immigrant Blame « - February 6, 2014

    […] to a maximum jail term of ten years for those committing benefit fraud. Benefit fraud accounts for 0.7% of welfare spending – a level that has remained the same for a decade or so, yet the media campaigns and government rhetoric on ‘benefits cheats’ has created the idea that […]

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