18 September 2010

Nick Clegg, a public school and Oxbridge educated millionaire, says that the state should not ‘compensate the poor for their predicament’ as he argues for major cuts in benefits.

Writing in the Times this week, Clegg claimed that ‘In this tough fiscal climate, cuts to the welfare budget are unavoidable’.  He also warned that the coalition plans a ‘a root and branch reform’ of a ‘failed welfare system’ and that ‘bringing a semblance of sanity to the system inevitably creates losers as well as winners’.

In a statement that will leave many claimants outraged, he also claimed that ‘welfare reform’ which will see many thousands of people forced off DLA and incapacity benefit ‘will put more power into the hands of benefits recipients’.

However, whilst Clegg and the coalition continue to attack claimants and whip up public outrage about the £1.5 billion allegedly lost to fraud in the benefits system, they ignored another set of figures published this week.  

HMRC has announced that the amount of unpaid tax last year rose from £38 billion to £42 billion, amounting to over 9% of the total tax that should have been collected.  Of this, £6.9 billion was unpaid corporation tax – the tax paid by businesses. This means that whilst fraud by disability and incapacity benefit claimants is running at less than 1%, businesses are robbing the taxpayer of  a staggering 14% of the money they should be contributing.

A further £5 billion is lost as a result of inaccurately completed self assessment tax forms. 

HMRC, however, is understood to be reducing the number of prosecutions against tax dodgers because it cannot afford the court costs.  Even when the department does pursue tax frauds it frequently settles out of court for small amounts to avoid paying costs and facing the risks of litigation.
So, whilst vast amounts of politicians time is spent stirring up public hatred against benefits claimants, wealthy businessman are being encouraged to simply ignore tax demands by the sight of a visibly weakened HMRC.

As the LibDem conference begins today, we very much hope some of its members will be asking Nick Clegg why it’s acceptable for the rich to cheat and prosper whilst the poor are punished for their predicament.



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