Fair comments Biff, but in my view the whole point of the benefits system is that it is targeted to those that need it.biffvernon wrote:I wonder what this saving of £5 billion really means. Presumably the money is not placed under a No 10 mattress.Totally_Baffled wrote: Put it this way, if this £5 billion isn't saved, then it will have to come from somewhere else, which may mean genuine claimants getting even less.
The £5 billion, were it to be given away to claimants, illegitimate or not, will be spent, circulating in the economy in myriad ways. For sure it will have to come from somewhere, and one can chose at what point in the monetary circulation one wishes to identify it. Perhaps at the point of general taxation, whereby it falls upon the taxed, or perhaps from the point of quantitative easing, whereby it falls upon us all as the currency devalues and inflation takes its course, or perhaps at the point of cancellation of a new Trident submarine, whereby it falls upon the good folk of Barrow-in-Furness who are laid off from their ship-yard work.
Economics is a complex beast.
£1.5 billion in fraud to those knowing what they are doing, and then another £3.5 billion simply because its too complicated is unacceptable (I know what they mean - I have filled out those tax credit forms - it must cost a fortune to administer too)
To be fair, Ian Duncan Smith has been talking about simplification as well - which would be a move forwards.
I guess could be said about the tax system too, it's so complicated I read from your link (the tax fraud indicator document) that 17.5% of the 'tax gap' is lost due to legal interpretation!
25% via avoidance and the hidden economy (eg paying for stuff in cash).
So nearly half of the £15 billion tax gap is on two items! (why not scrap VAT on labour and increase it on goods? - no way round it then?)
I know its a seperate issue, but what also needs looking at is if the benefits system is too generous? Contentious I know, but for example universal benefits like child benefit is bonkers, and people shouldnt be able to afford luxuries if they are not working? eg fags, booze, plasma screens, SUV's etc. I know the latter is probably hyped by the right wing press, but it needs investigating? Maybe vouchers should be considered that can only be exchanged for essentials rather than fags?
I do take the point though that has to be more focus on evasion by the rich and to stop using this so much as a way to score political points.
