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Thursday, August 12, 2010 

Number crunching.

£1.5bn - amount estimated to be lost each year through benefit fraud, which has led the Sun to launch "a war on feckless benefit claimants", supported by David Cameron, who describes the money as being "stolen" from taxpayers. The Department for Work and Pensions however puts the figure at £1bn, which amounts to 0.7% of total benefit spending.

£1.17bn - amount new government advisor "Sir" Philip Green paid his wife in 2005, of which the exchequer received not a single penny thanks to her residence in Monaco. Green is to carry out an external review of government spending.

£15bn - amount estimated to be lost to the exchequer each year through tax evasion.

0p - amount Newscorp Investments, the main British holding company of News Corporation, owner of The Sun, paid in corporation tax in the UK in the 11 years prior to 1999, despite making a £1.4bn pre-tax profit over those years.

(Before anyone starts yelling at me that fraud is illegal and evasion (Update: evasion is illegal, and avoidance is not, see comments) is not, I realise that. It does however say something about this government that it chooses today to announce "Sir" Philip Green's reviewing of the books at the exact same time that the Sun with Cameron's support launches its "war", which fails almost completely to separate those who are claiming what they are entitled to from those that are doing so fraudulently. Still, as Graham Dudman, the paper's managing editor just said on Newsnight, the Sun is doing so because it's a great story, that it wants to "shock and amaze on every page", and that only then might it actually pass on any details they're given to the actual authorities. Oh, and it's the silly season and they need to fill up the paper.)

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Tax evasion is illegal, tax avoidance is not.

Welfare rights specialist Neil Bateman wrote (Guardian 15.12.08), "Investigations I have carried out for the courts at the request of defence lawyers have shown that amounts allegedly defrauded are frequently nowhere near as great as alleged."
So we may assume that the benefit fraud figure is gretly inflated but no journalist will bother to query it.

Indeed, see CH/225/2009 (HN v London Borough of Brent) for an explanation of why this is. In this case the council committed a substantially more serious fraud than the claimant.


Some mark up!
Most victims of these official stings won't have a clue as to how much they wrongly claimed, knowingly or otherwise, so they won't question the amount.

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