UK Poverty Post

Stop headline-chasing on benefit fraud – and concentrate on fixing the system

This week, David Cameron returned to one of the favoured themes of politicians looking for easy headlines – benefit fraud. With the welfare bill under pressure like no other area of public spending and with benefits already at historically low levels, of course every penny that’s going to the wrong people counts. But a quick glance at the figures the Prime Minister quoted shows that that’s more about administrative error (£2.1 billion) than fraud (£1 billion from benefits, plus £460 million from tax credits). Dwarfing both, and rarely mentioned, is the £15.8 billion of benefits and tax credits that go unclaimed by people who are entitled to them.

So far, so typical. A new government scores cheap and easy points with sections of the media and the public by talking tough on benefit claimants, selectively quoting statistics to further that aim. Public attitudes having been softened up over time by successive governments so that this kind of talk ceases to shock. The Need Not Greed campaign, of which Oxfam is a member, is clear that it is the outmoded benefits system, which has failed to develop with the modern labour market, that forces people into working informally (“cash in hand” and “off the books”), just to get by. We’re not talking about massive defrauding of the system, but people who want to work, but are held back by the system.

But perhaps it’s better to let the government – in the form of the recent consultation paper on welfare reform, championed by Iain Duncan Smith – speak for itself: ‘fraud is always wrong, but we must recognise that the benefits system is making matters worse by pushing valuable work, and the aspiration that this can engender, underground’. If Cameron is serious about tackling fraud – and not just chasing headlines – then it is this systemic failure that he needs to devote his energies to.

Oxfam argues that, by raising the amount of money people can earn before their benefits are affected, and lowering the rate at which they are withdrawn thereafter, work that is now informal will be brought into the light. People who can only do small amounts of work – because that’s all that’s available, because that’s all that they can manage right now, or because that’s what fits with their caring or other responsibilities – will be empowered to do so.

Policymakers also need to engage seriously with the vulnerability of people living on benefits and seeking to get back into work – putting security back into social security. Forced to subsist on tiny incomes, and with few assets to draw upon, such people are understandably risk averse. Benefits should help them manage that risk, stepping into the breach whenever work dries up, or if a new job doesn’t work out. At the moment, it can take weeks to process claims for various benefits, and taking those difficult first steps into work can become a debt crisis from which it can take years to recover.

Happily, the government’s consultation paper on welfare reform engages with this, and some of the solutions it proposes would genuinely make a difference. I’d suggest the Prime Minister joins his Work and Pensions Secretary in engaging with the substantive, structural problems in the welfare system – of which benefit fraud is but a symptom – and leave the sensationalism to the tabloids.