Thursday, February 02, 2006

Defrauding The Taxpayer

The Home Office has just announced that identity fraud is costing Britain £1.7bn pa. Now why might they be telling us that? Home Office Minister Andy Burnham says:

"Proving identity is an intrinsic part of life in modern societies. But our current reliance on documents such as birth certificates, utility bills, and bank statements to prove who we are leaves an open door to identity criminals. One way we can reduce the potential for identity fraud is to introduce a national identity card."

Ah. It's another sales pitch for that Big Brother scheme to rob us of our civil liberties. They've given up trying to convince us it will stop terrorism, and are now trying to scam us into believing it will somehow save us money. Despite the fact that it's set to cost at least £30bn.

Now it is the case that fraud is a growing problem: last year Norwich Union published a study that put overall losses at £16bn pa. But if the government really wanted to do something about that, there are much better alternatives to identity cards. First, of course, following Major Frobisher's plan for cost-effective justice, they could double or treble the derisory penalties for fraud.

But second, and much closer to home, the government could tackle the scandalous level of fraud it permits in its own backyard. As set out in numerous PAC Reports, government departments lose eyewatering amounts of taxpayers' money to fraud every year. To recap on the big losses:

  • DWP lose at least £3bn pa to fraud and error (2003-04)
  • Customs lose £11bn pa to non-compliance, non-registration and artificial avoidance schemes (2002-03)
  • Inland Revenue has £2.5 bn pa "at risk" (2002-03)

Just those three come to £15bn pa. Which may be only half an ID card scheme, but it's getting on for 5 pence off the standard rate of income tax.

Why is it that government ministers still believe they know how to run our business when they are so obviously incapable of running their own?

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