Jonathan Ashworth: his claim that a crackdown on benefit fraud could have funded an extra cost-of-living payment is false.
Cast your disgusted eyes over this:
Irresponsible from Labour.
It falsely suggests the benefit system is rife with fraud, whilst framing benefit claimants as the reason other ‘deserving’ people aren’t getting the support they need.
If Labour want to talk about benefits, try the fact claimants can’t afford to eat. pic.twitter.com/iH2mOBda0p
— Frances Ryan (@DrFrancesRyan) April 11, 2023
Dr Ryan continues:
In the new book, Broke, I talk to a mum with ME who felt suicidal after a benefit overpayment. Brainfog meant she misunderstood a rule and the DWP never corrected her. They just continued paying – and then demanded debt repayment. Her benefits are so low, she already skips meals.
— Frances Ryan (@DrFrancesRyan) April 11, 2023
Final word: I’ve contacted Jonathan Ashworth privately with my concerns about this. Funnily enough, I do not have a say on Labour Party policies – nor should I! – but I will always discuss the facts with them when they are happy to (and they have been in the past).
— Frances Ryan (@DrFrancesRyan) April 11, 2023
It’s true that benefit fraud and error accounted for four per cent of DWP payments during 2021-22 – around £8.6 billion.
But this may be explained by the fact that the Covid-19 crisis was ongoing during much of that time; fraudsters took advantage of the opportunities to claim Universal Credit that the government provided.
For comparison: in the last year before the Covid crisis, 2019-20, the Mirror article states that benefit fraud and error cost £4.4 billion (about 2.4 per cent), so we can see how much it rocketed during the pandemic years.
The Mirror article discusses a Parliamentary report last year (2022) stating that levels of fraud and error in the benefits system were “unacceptably high” and that it “is yet to show any sign of falling back to pre-pandemic levels”.
But that can hardly be surprising, considering the fact that the last Covid-19-related restrictions were not lifted until February that year.
Figures for 2022-23 are not yet available – which is unsurprising as it is less than a week since that financial year ended. It will be interesting to see the estimated level of benefit fraud for that period, compared with the previous year.
It should not be forgotten that the DWP is proactive in claiming back money that has been lost to benefit fraud, and reported savings of £2 billion over the last year due to correcting and preventing fraud and error.
Finally, it should be remembered that the DWP is notorious for underpaying people who are in genuine need. These underpayments amounted to £2.1 billion in 2021-22.
What may we conclude from the facts?
Try this:
The benefit system is almost entirely free of fraud and error, with only around two per cent recorded normally.
Overpayments to fraudsters who entered the system during the Covid-19 crisis are being recovered, with half the amount overpaid in 2021-22 already regained.
Many benefit overpayments are due to errors on the part of claimants whose health conditions make it hard for them to understand the complexities of the system. Those overpayments are caught and claimed back – causing “severe hardship” to the claimants.
The DWP also makes errors that affect payments.
Underpayments to people who deserve more meant £2.1 billion that should have been handed out in 2021-22 was not.
Therefore:
Ashworth’s sums are probably wrong.
But there is another aspect of this that everybody seems to be ignoring:
It doesn’t matter that his sums are wrong because the amount of fraud and error in the benefit system has nothing at all to do with cost-of-living hardship payments.
If the Conservative government wanted to give out an extra £300 payment to those of us who need it, that is what would happen.
It would simply tell the Bank of England to create the money (yes, out of thin air) and that cash would then be spent into our bank accounts at the appropriate time.
Any concerns about inflationary pressures could be eased by taxing a similar amount out of the system. The easiest way would be a wealth tax on the super-rich or corporations, but the way those people are racking up profits at the moment, it probably wouldn’t even be necessary to impose that; an equivalent amount may come back to the Treasury via current tax levels.
So Ashworth’s entire argument is nonsense. He – and the right-wing Labour leadership he represents – should be ashamed of even mentioning it.
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