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29 October 2010

Cameron’s double standards on benefits

The Prime Minister’s response to criticisms of child benefit betrays a worrying classism.

By Oliver Willmott

The government has spent much of the day facing renewed pressure over its proposed changes to child benefit: one senior Tory MP called them “unworkable”, and a Treasury tax expert described them as “intrusive” and “an administrative burden“.

Meanwhile, the shadow chancellor, Alan Johnson, has written to his Conservative counterpart, George Osborne, requesting clarification of how exactly the scheme would work, and who would be eligible under the convoluted new regime.

This is hardly shocking news. What is more surprising, however, is David Cameron’s response to such concerns at his press conference.

Aside from how remarkably blasé he was about the practical difficulties, the Prime Minister displayed double standards in his government’s approach to rich and poor welfare claimants, betraying a deep classism underpinning the government’s implementation of social policy.

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In relation to these concerns, Cameron said:

I don’t start from the proposition that we are all appalling cheats and liars and tax evaders, and the rest of it, and I am quite sure this change will secure the very generous revenues that the Office for Budget Responsibility have pencilled in. So I don’t predict a problem.

Contrast this with the government’s plans to use private “bounty hunters” to crack down on what Cameron in August called the “absolutely outrageous” level of benefit fraud.

It seems he thinks that the higher earners who will be missing out are more honest and have a greater sense of civic responsibility than the poorer people who constitute the majority of welfare claimants.

What evidence is available does not support his claims – or prejudices. Those who earn more have greater opportunity to avoid tax, and more often have the social connections and knowledge to enable them to do so.

Tax evasion has been estimated to cost the Treasury £15bn a year – 15 times as much as benefit fraud. This figure doesn’t include the legal tax avoidance indulged in by rich individuals and companies, which some have estimated to cost an additional £40bn a year.

So, it’s very hard to maintain Cameron’s claim that those who would lose their eligibility under the new scheme will be flocking to surrender their child benefits.

In contrast, the government’s own figures suggested that last year roughly 1 per cent only of benefit was fraudulently claimed, amounting to £1bn a year, out of a total £148bn spend.

Obviously, any sort of fraud is a bad thing, and nobody would seriously suggest otherwise. It would also be seriously misguided to suggest that “all” those who stand to lose their child benefit are “cheats and liars and tax evaders”. However, some will, and as times become harder it is not difficult to see why.

Most importantly, this shows just how wrong-headed this insidious discourse that contrasts an honest, civic-minded upper middle class with work-shy, dishonest lower earners is. What is most worrying is that such ideas are set to be reflected in how critical social policy reforms are implemented.