Today, work and pensions secretary Smith announced much tighter regulation of welfare, a streamlining of benefits and harsher penalties for fraud. Simplification may be a good thing; I'm not familiar enough with the system to know. Fraud ought to be penalised. But there seems to be something deeply disturbing about chasing benefit fraud that costs £1.1 billion annually (and making other severe cuts such as university funding dropping by 40%), while tax evasion, avoidance and debt in the UK amounts to £120 billion annually, more than three quarters of the budget deficit. Of course not all this can easily recovered, but some can, and focusing political attention and government funds on the recovery of these monies repays £60 for every £1 spent on it. For comparison, clamping down on benefit fraud is more like £3 for each £1.
Why then, would a government make a further 15% funding cut to its tax office in such a situation?
Perhaps these figures are incorrect (the sources are all recorded here if anyone wants to chase them down), but there seems to be a decent prima facie case for making tax avoidance and evasion a major plank in responding to the budget deficit. This isn't about penalising the wealthy or large corporations, but simply upholding existing laws. If it is replied that cracking down on tax evasion would send these wealthy people and companies elsewhere, then perhaps the UK needs to ask itself whether it wants to provide sanctuary for such criminals.