Another day, another wheeze from a desperate government as it tries to move the polls. Benefit claimants could soon have their bank accounts checked each month to ensure they are not lying about their savings. The law change, designed to crack down on benefits fraud, appears to be the government’s answer to the fact that welfare payments have exploded in recent years. It will reportedly be unveiled in the Autumn Statement, with estimates suggesting it could save the taxpayer £100 million a year. But will it make a difference?
The Department for Work and Pensions’ total proposed expenditure for 2023/24 is set to reach £279 billion (almost half of which is pensioner benefits). As a result, this £100 million figure – which itself sounds optimistic – is a mere drop in the ocean. It’s also not clear how the government arrived at this figure, but it would only take the DWP a few hours to burn through. It works out as roughly 0.16 per cent of the £59.6 billion currently spent on Universal Credit and equivalent benefits.
Perhaps efforts to rein in spending ought not to be sniffed at. We cannot allow crooks to plunder from the state, as Emmanuel Bay – who falsely claimed to be paralysed for 17 years to receive £1 million in benefits – did. But the reality is that this ‘crackdown’ is hardly going to give the Chancellor Jeremy Hunt the headroom he needs to slash taxes as so many backbenchers are clamouring for.
The plain truth is that the government is not serious about taking on welfare reform
There’s another problem with this law change, which could hand authorities the power to snoop on people’s bank accounts. This is a worrying step, as it comes at a time when lenders already hold far more information on customers than many realise. It was reported last week, for instance, that NatWest is advising some customers to stop eating meat and drive electric cars after combing through their accounts to calculate their carbon footprint. We’re moving towards becoming a cashless society, which brings the advantage of frictionless transactions, but creates the inevitability of more surveillance than ever before.
Many of those who want to defraud the British taxpayer will still find a way. They will set up different bank accounts in different names for other payments, or rope family and friends into doing so. The incentive for cash-in-hand will increase, at a time when the ‘shadow economy’ is said to be worth over 10 per cent of GDP.
Worst of all, this won’t address the fundamental issue that the government is now handing far too much money to far too many people. Britain has, unknowingly, become a nation of dependents. Half of the population now receives more from the state than they contribute in taxes; the number of people on out-of-work benefits has swelled to more than five million since the pandemic. The benefits bill is, unsurprisingly, soaring – and as ministers will well know, deliberate fraud is only a small part of the problem.
Despite current record-low levels of unemployment, there are growing numbers of economically inactive claimants of working age, many apparently suffering from ill health. Since Covid hit, the number of people who say they are too ill to work has increased by 20 per cent. Yet the government has announced plans to end the use of the work capability assessment as part of its reform of the benefits system. The difficulty in diagnosing conditions like ‘burnout’ will not be eased by scrapping them.
Previous efforts at cracking down on eligibility have been abandoned when confronted by the inevitable outcry from pressure groups and the media, who focus on the hard cases, such as instances when those with disabilities have somehow slipped through the net, or when assessments have gone wrong. So why bother? Why risk the backlash by asking how sustainable it can really be to have so many people ‘receive’ more from the state than they ‘contribute’?
We have had eight DWP secretaries in nine years. The plain truth is that the government is not serious about taking on welfare reform. Instead, it is eager to be seen to be doing something while failing to tackle the real problem. Making gestures in the hope of shoring up the collapsing Red Wall is unlikely to work. Taxpayers deserve better.
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