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The benefits of chasing tax dodgers

This article is more than 13 years old

No one would argue with tackling fraud in the benefit system (Cameron gets tough with new clampdown on benefit fraud, 10 August), but levels of fraud are in fact remarkably low. For example, according to DWP figures for incapacity benefit, the amount of money that is lost through official error is four times greater than the amount lost through fraud (2.1% compared with 0.5%).

Many disabled people rely on the benefits system, or have been helped to find work through out-of-work benefits. This support can be vital and people who need it must not be put off from claiming. Unfortunately some disabled people have reported being the targets of abuse or even violence simply because they receive benefits. The government must ensure that any further "crackdown" on fraud does not end up driving people who desperately need support away from even making a claim in the first place.

Guy Parckar

Leonard Cheshire Disability

 I have been employed for 26 years by the same employer. Now, having been off sick for 12 months after being injured at work, I am no longer being paid while waiting for an ill-health retirement. I am now forced to claim benefits. It is a complex procedure. I have met some nice people employed by the DWP, but the whole process is humiliating. I do not need the prime minister making it worse by referring to benefits as "hard-earned taxpayers' money". Have I not contributed over the last 26 years? I do not want those who work the system and abuse it to profit, and would like to see them punished. However, I would really like to see the prime minister scrutinise tax fraud with the same zeal.

Name and address supplied

 So David Cameron is concerned that "hard-earned taxpayers' money is being stolen from the taxpayer". If he is that concerned, why is he addressing the pimple of benefit fraud when the giant abscess of tax avoidance and evasion is totally ignored? According to the National Audit Office, almost 30% of Britain's major companies pay zero corporation tax and 60% pay less than £1m a year. Estimates of overall loss to the economy from tax-dodging range from £20bn to £95bn. Even at the lower figure that represents four times a bigger problem than benefit fraud, and as "we are all in this together" perhaps Mr Cameron might consider making four times as much fuss about this issue. Using his own deductions that could mean 800 secondary schools and 600,000 nurses or a substantial slice off the deficit that he is so obsessed with.

Ted Woodgate

Billericay, Essex

 Working for the Public and Commercial services Union and using HM Revenue & Customs data, I estimated tax evasion in the UK to be at least £70bn a year in March 2010. Recent World Bank data on the size of the UK shadow economy suggests a slightly higher figure. In the year to March 2010 HM Revenue & Customs cut more than one in eight of its frontline staff who might tackle this issue.

Beating tax evasion and the £25bn a year UK tax avoidance industry is the best way to rebalance the government's books. So why is no one in this government willing to embrace this issue and devote the resources to it that would create new jobs, enhance the quality of law and order in this country, uphold democracy and in the long run result in tax cuts for all honest people while maintaining essential public services we all rely on?

Richard Murphy

Director, Tax Research

 The prime minister's attack on people committing benefit fraud contradicts the Department for Work and Pensions' own report, which two weeks ago said "As a result [of the complexity of the benefits system] working legitimately is not a rational choice for many poor people to make. Fraud is always wrong, but we must recognise that the benefits system is making matters worse by pushing valuable work, and the aspiration that this can engender, underground."

Rather than piecemeal headline-grabbing initiatives, we need fundamental reform of the benefits system to reduce error, tackle fraud, and support people back into work, as Iain Duncan Smith has suggested and we have been calling for over many years.

Aaron Barbour

Policy manager, Community Links

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