Lies, damn lies and what the statistics really reveal

20 01 2014

There is a great support, fuelled principally by the Daily Mail and the Murdoch Press and stoked regularly by the endless media parade of government ministers, for a reduction in benefit levels. Those on benefits are portrayed as feckless and “on the take”.

Certainly some are, in my year spent in and around Scottish community projects I came across young men who had no intention of working and who I still see on social media boasting about never having paid a TV license, but this is not typical.

According to a recent report from the Joseph Rowntree Foundation, more than half of the children and adults living in poverty are from working households. Not feckless then.

And all cheats? According to the government’s own figures, fraud across the whole of the economy amounts to £73 billion a year. Part of that figure is down to benefits fraud. When listening to George Osborne, who recently spoke about “hard truths” it is easy to imagine that the vast majority of that figure is down to abuses within the benefits system. It is not. In fact, benefits overpaid due to fraud is just £1.2 billion and tax credit fraud even lower at some £380 million. So just under £1.6 billion in total. To none-economists, i.e. most of us, this is a massive number. It is but we need context. £1.6bn is less than 1% of the overall benefits and tax credits expenditure. And the total loss through fraud in the system is less than benefits underpaid and overpaid due to error.

Some more perspective, the government figures put public sector fraud, which includes benefit fraud, at £20.3 billion a year. The majority of this £20 billion is tax fraud which costs the economy £14 billion annually, or 69%. So if anyone is on the take it is those who fail to pay the correct levels of tax.

As a mother of a a young person who will be leaving college in six months time and looking for work and a place to live, I’m particularly concerned about who the rhetoric and policies are affecting our children. It is shocking and saddening that a recent survey from Princes Trust reported that 9% of respondents said that they “have nothing to live for”.

Against this background George Osborne continues to target the young by removing housing benefits from the under 25’s. This is a cynical, as well as heartless, policy. The most recent figures show that £107.6bn of the £201.8bn social security budget went on pensions; yet the state pension is protected by a triple-lock to ensure that there is no diminution in real terms and other benefits such as free TV licences for even the wealthiest pensioners are sacrosanct. Why? Because the over 65’s are more likely to vote than any other age group, 76% in the 2010 general election compared to just 44% of 18-24 year olds.

So the most important message I have for my son, and his contemporaries, is to ignore the childish petulance of celebrity rabble-rousers such as Russell Brand and make sure you use your vote. If you don’t, then this government will continue to ignore you and, worse, ensure that a disproportionate amount of the austerity measure fall on the young.

In practice, the removal of housing benefits to under 25’s will leave many, including those in work, at risk of eviction. Where does George Osborne expect these young people to live? Not everyone can move back in with their parents George!

If the government are looking for savings in the overall housing benefit bill then they should address the extortionate rentals being charged by private landlords. When tabloid headlines proclaim thousands a week being paid to individual families in housing benefit the subtext is that these families are pocketing the cash. They are not. It is being passed on to the landlords. If the government campaigned,or better still legislated, for affordable rents it would have an instant impact on the total paid out in housing benefits.

In my case I have the space and my son could move back but what jobs are available for a 22 year old in Crieff? Other than zero hours “contracts” in the hospitality industry – none. Working Tax Credits are a vital in supporting those in low paid work. This is an essential safety net but it is also true that it allows employers to maintain pay rates at below subsistence level. In this way tax credits reward employers who could pay more but who chose not to; the government fills the wage gap. If the government introduced legislation to make payment of the living wage mandatory the working tax credit bill to the taxpayer would be reduced.

A final, philosophical rather than monetary note. It is engrained in our psyche, call it the protestant work ethic if you will, that the work we are employed in is central to our human dignity. How often is the first question we ask a stranger, “what do you do?”. There are high value answers, doctors and lawyers perhaps, and being unemployed is seen as worthless. In an age where there are fewer and fewer jobs available, particularly for young people, we must reinforce the truth that we all have value over and above the value we have to employers. We are more than a potential employee. This utility is not the sole measure of our worth as humans.

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