Graphs at a glance: How the government goes after benefits fraudsters but lets off tax fraudsters

There are a number of differences between those who indulge in tax fraud and those who indulge in benefits fraud. The most basic is money: to dodge tax you probably have money, to steal benefits you probably don't. 



Is it this basic financial distinction that accounts for the differences we describe below? Do well paid legislators and prosecutors feel more empathy with tax dodgers then benefits cheats? 

The following graphs suggest perhaps so:

7.4 times more money is lost through Tax Fraud than through Benefits Fraud:

• Benefits Fraud: £1.9 billion
• Tax Fraud: £14 billion (We use the National Fraud Authority (NFA) report figures, though knowledgeable commentators on tax matters assert the loss is very much greater)

10 times more in percentage terms is pinched by tax dodgers than by benefits cheats according to the NFA report:

• Benefits: 0.7% of all benefits are taken fraudulently
• Taxes: 6.7% of all taxes are not paid fraudulently (i.e. doesn't include 'avoidance' which uses legal loopholes).

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Graphs at a glance: how local authority spending cuts have hit areas by level of deprivation

The Joseph Rowntree Foundation's report "Coping with the cuts? Local government and poorer communities" shows that spending cuts in more deprived local authority areas are systematically greater than in affluent local authority areas. The difference between most affluent and most deprived being about £100 per head.

"Figure 3 illustrates this, but also highlights a key finding relevant to this study: that the scale of the cutback has been greater in more deprived local authorities than in more affluent ones. Figure 3 expresses this in terms of per capita spending power, where there is a difference of over £100 per head between the most and least deprived. Deprived authorities were previously more grant-dependent and have suffered disproportionately. However, even in percentage terms, deprived areas have seen a greater reduction in spending power (-21.4 per cent) than affluent areas (-15.8 per cent)."

Here is a brief definition of "Specific" and "Formula" grants in the graph above. They are the two main sources of money from central government and represent around 70% of all local authority funding.

Specific grants pay for individual services, such as key government priorities. This money is ring-fenced and must be used in the way specified by those priorities.

Formula grants are calculated using mathematical formulae based on, among other things, the local council tax base and how many people rely on local services.

For a fuller definition of how local authorities are funded, see http://www.bbc.co.uk/news/uk-11567693 and http://www.local.communities.gov.uk/finance/1213/basicguid.pdf

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The Ripped-off Britons TV Sketch Show: Cutting the national debt

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The Ripped-off Britons TV Sketch Show: Tax dodging

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Graphs at a glance: Impact of occupation, unemployment, and geography on death rates in Britain

Public policy is a classic instance of the tail wagging the dog. For a tail to wag a dog it is not necessary for the dog to be in cahoots with its tail. It is enough that the dog doesn't resist its nether extremity. 

Most people pay little attention to things that don't affect them directly and immediately. Even when those things inevitably will in the future, or inescapably did in the past, they are likely to swallow any lazy assertion. The unemployed are portrayed as living high on the hog with their overly generous benefits. A lack of interest in whether this is true or not allows public policy to be driven by the prejudices and interests of whichever cabal is wagging the government.

The Marmot Report of 2010 showed statistics from the Office of National Statistics (ONS) comparing the death rates per 100,000 of two cohorts in the period between 1981 and 1992. The first cohort was made up of people who had a job in 1981. The second cohort was made up of people who were unemployed in 1981.

The impact on mortality of being unemployed is clear, and provides no evidence of the unemployed having it easy. The "lower orders" have a higher death rate within both cohorts. However it is also evident that being unemployed has the greatest impact on the highest Class I, where the unemployed in that group had a 65% higher death rate than their employed peers. A matter that should be of interest to the highest as well as the lowest in the land. 

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Graphs at a glance: Bank of England report shows in 2013 our mortgages are bigger than before the mortgage crash of 2008

A graph on page 63 of the Bank of England's end of year report might raise an eyebrow, if not your blood pressure.

Loan to Value (LTV) tells what percentage of the value of your home you owe on your mortgage. For instance, if you have a £150,000 mortgage and your home is worth £200,000 your Loan To Value ratio is 75%.

LTV in 2013 is actually higher than just before the Credit Crash, blamed by many on people borrowing too much on mortgages. In 2007, just before the crash, around 10% of borrowers owed more than 75% of the value of their homes. In 2013 this had risen by a half to 15% of mortgage borrowers. The percentage of borrowers in negative equity in 2013 (they owe more than the value of their homes) quadrupled to 4% of mortgage borrowers. 

Bank of England Quarterly Bulletin, 2013 Q4

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Graphs at a glance: Low pay by age and industry

These graphs are from the Joseph Rowntree Trust:
In 2015 almost 6 million people were paid less than a living wage, at the time £9.15 per hour in London and £7.85 per hour in the rest of the UK. This is about one in five of the UK workforce (made up of approximately 30 million people in 2015 according to the Office of National Statistics). 

Nearly 80% of jobs done by the 18-21 year age group in 2013 were 'low paid'. 

Most low paid jobs in the Public Sector were held by those over 40 years of age.

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The Ripped-off Britons TV Sketch Show: Indispensable overpaid bosses

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Rip-off News round-up. Our pick of the last week's media (Thu 19th December)

Government lost £13bn to fraud and error

MPs are demanding action after £13.2bn was written off the government balance sheet in 2011-12 due to fraud, financial error and legal claims. The numbers are found in a new annual report called “Whole of Government Accounts”, first published in 2011. But the figures do not include local government or public corporations, and the National Fraud Authority estimates the true cost of fraud to the public sector was £20.6bn. Other omissions include HMRC’s "tax gap" - the difference between what the authorities were owed and what they were collecting – which now totalled £35bn. Overall, the accounts showed net public liabilities - the difference between the government's assets and liabilities - rose from £1.19 trillion to £1.34 trillion over the period. BBC NEWS

Osborne: £12bn more in welfare savings needed

"You are going to have to find billions of pounds more in welfare savings if you want to reduce the deficit, eliminate the deficit and get our debt falling," he said. The comments indicate that if the Conservative Party wins the next election, welfare may be cut to protect spending on public services. Conservative MP Brooks Newmark cited figures produced by the Institute for Fiscal Studies think tank, which said that welfare cuts of £12bn would be required after the next election to keep departmental budget cuts at their current rates. BBC NEWS

NAO contradicts Osborne on Lloyds share sale: Taxpayer lost £230m on rushed sale of bank

The National Audit Office findings shatter Chancellor George Osborne’s claim that the sell-off delivered “a profit for taxpayers.” A rushed sale of Lloyds shares left the taxpayer another £230million out of pocket, a report reveals today. The Government raised £3.2billion by selling off a 6% stake in the bank to major institutional investors in September. But that’s before taking account of borrowing costs to bail out Lloyds at the height of the financial crisis. The taxpayer pumped a colossal £20bn into saving the bank following its disastrous takeover of Halifax Bank of Scotland. A report from the National Audit Office found that once you’ve included the cost of financing the mega-deal, the taxpayer ended up £230m worse off from this summer’s share sale. MIRROR

Probe into gold price scam extended to Deutsche Bank

Germany’s financial regulator has demanded documents from Deutsche Bank as part of an investigation into potential manipulation of gold and silver prices. The probe from the German watchdog comes as regulators around the world step up their scrutiny of benchmarks after the recent Libor interbank lending scandal led to hefty fines for banks. The UK’s Financial Conduct Authority has also been looking at precious metals as part of a broader review of financial benchmarks. With an estimated 175m ounces of gold, worth $215bn at today’s prices, changing hands daily on the over-the-counter market, London is the global centre of gold trading. However, the FCA has not launched a formal investigation. FINANCIAL TIMES

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Graphs at a glance: Number of people who had to resort to foodbanks tripled in one year

Updated on 22/3/2015: We first posted this in December 2013, reporting that between 2011-12 and 2012-13 the number of people resorting to foodbanks close to tripled. Since then the Trussell Trust issued new figures showing this leap happened again between 2012-13 and 2013-14, with yet another close to tripling of users (up 2.6 times). We have updated the graph to show this.

According to a report by the Trussell Trust, a charity running foodbanks the number of people resorting to foodbanks nearly tripled in 2012-13:

"Trussell Trust foodbanks have seen the biggest rise in numbers given emergency food since the charity began in 2000. Almost 350,000 people have received at least three days emergency food from Trussell Trust foodbanks during the last 12 months, nearly 100,000 more than anticipated and close to triple the number helped in 2011-12."

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