Why Are Governments Chasing Benefit Cheats, but not Tax-Evaders?

A brilliant ad in The Times today, which comically captures the absurd tragedy of the government’s new idea to tackle the lazy, work-shy unemployed: make them do voluntary work. Which will benefit the councils having to put thousands out of work because of spending cuts.

Discussing this today with a colleague he mentioned the disparity between benefit fraud figures and those for tax evasion:

Total cost of benefit fraud to UK economy: £1bn

Total cost of tax evasion to UK economy:    £15bn

So why do we persistently see high profile media campaigns targetting ‘benefit cheats’? Where are the dark, ‘we’re out to get you’ ads aimed at Hedge Fund managers who pay less tax than their minimum-wage cleaners because of loop holes that allow them to launder money through tax havens like the Cayman Islands?

Why don't we see ads like this targetting the rich?

This Conservative administration has made a huge fuss about going after lazy benefit cheats – but the money they would save if they cleaned up all benefit fraud would be a pittance next to the revenue they could get from making people who earn in the UK pay their taxes. It’s that simple. But they refuse to do it. Far easier to screw the poor, it seems.

A recent article in Prospect lays out why:

Why was it that the Conservatives so quickly reneged on their own election promises to clamp down on those who make money offshore? No doubt they were torn between the need to stick to their word and their perception that tax havens help to keep the City of London open for business. But it is also tempting to be more cynical. Under British law, hedge funds are able to register in the Caymans—and make their deals tax-free through the islands. This is allowed even though most of those running the funds work thousands of miles away, mainly in central London. If you delve into the public records in the Caymans—as researchers for the Channel 4 Dispatches programme I have just produced did—you will find lists containing many hedge fund names, many of them based in London. Some of the names of owners of these funds can also be found on the electoral commission’s record of Conservative party donors.

Sickening. If you want to find out more, there’s an excellent programme on ‘How the Rich Avoid Paying Tax’ available to stream from Channel 4.


2 responses to “Why Are Governments Chasing Benefit Cheats, but not Tax-Evaders?”

  1. I have a lot sympathy with the idea of requiring those who are long-term unemployed to take part in at least some voluntary/community work (I would be more than happy to do so myself if I found myself in that situation). However, I totally agree, the disparity here is indeed sickening given the much greater losses incurred due to tax evasion and is something that really does need highlighting.

  2. I would suggest that it has much to do with what is described in the book Selling the Work Ethic: From Puritan Pulpit To Corporate PR by Sharon Beder.