THE BLOG

Is Fraud Always Wrong?

17/09/2013 17:29 | Updated 17 November 2013

The government plans to increase the severity of punishment for benefit fraud. It did cross my mind that the timing of this announcement was rather brilliant. In the middle of the Liberal Democrat annual conference, perhaps the aim is to unsettle those, like Sarah Teather, who still believe in social justice and don't want to stay in power at any price.

Anyone who examines the facts knows that benefit fraud is a minor problem. Tax fraud is 15 times bigger, unclaimed benefits 17 times bigger, benefit cuts are 22 times bigger and tax evasion is 30 to 70 times bigger. In the context of our national finances benefit fraud is near irrelevant:2013-09-16-440Fraud01.jpg

However this is not the impression we get from the national press. Using Google Trends it is possible to count the frequency of words used on the internet. In the UK, between June 2010 and September 2013 'benefit fraud/cheat' appears on average 80 times per month, whereas 'tax fraud/cheat' appear only 20 times per month (a ratio of 4:1). Even worse, if we search news pages the difference is 37 to 6 (a ratio of 6:1). In other words, while benefit fraud is 6% of tax fraud, the media talks about benefit fraud 600% more.

This is just one part of a much wider problem. An analysis of government cuts shows the same pattern. Compared to the average person cuts target the poor 5 times more, disabled people 9 times more, and the severely disabled 19 times more. Meanwhile, artificially low interest rates hide a major shift in resources towards the better-off.

We are living in a severe economic crisis created, not by people in poverty nor by disabled people, but by inflated house prices and the associated debt. Banks, politicians, home owners, the moderately wealthy and the very wealthy are all complicit in this problem - but nobody wants to take any share of the blame - instead we shift responsibility to those groups that are politically weak and utterly innocent. This is the role of the scapegoat.

In the UK scapegoating increases as party politics becomes a madcap chase for the swing voter. Recent policy pronouncements make clear that, while nobody is interested in reducing poverty, there is a great deal of interest in subsidising home owners, child care and reducing taxes for middle-income earners. We live in a medianocracy - power lies in the middle and the welfare state is increasingly being distorted by the needs of the middle. This explains why increasing punishments for benefit cheats is good politics - even when it's unfair, illogical and expensive.

In reality benefit fraud is often a side-effect of desperate poverty and the messiness of ordinary life. WomenCentre in Halifax works with women whose lives have descended into a hellish combination of debt, mental illness, abuse, ill health and many other problems. The graph below shows the problems of 44 women working with WomenCentre:
2013-09-16-167ComplexNeedsDataWC01.jpg

85% of these women had recently experienced domestic violence. It is not unusual for women sometimes to tell the benefit agency they are single even when they may be in some kind of relationship - often a highly toxic relationship. They do this because it means they will get a modest improvement in their very low income, which they can then use to better look after themselves and their children. But if the system discovers that the woman has lied then they can be sent to prison - at a cost of £40,000 per year; the cost of putting children in care is even greater.

In an ideal world all fraud would be wrong. But we do not live in an ideal world, and many women and families live in a desperate poverty which is not just financial - it is reinforced by isolation, stigmatisation and despair. In those circumstances is benefit fraud even wrong?

Interestingly the Church used to take a very firm line on social justice. Archbishop Temple, one of the founders of the welfare state, quoted St Thomas Aquinas with approval:

...it is lawful for a man to succour his own need by mean's of another's property, by taking it either openly or secretly; nor is this properly speaking theft or robbery.

St Thomas, along with many other great thinkers, understands that there is nothing sacred about the right to property. Unless society takes care of those with the least it cannot expect those with the least to respect property rights or other damaging rules and regulations. Fraud from greed is always wrong, but fraud from need is not.