Daily Archives: August 11, 2010

Strange as it seems, if David Cameron succeeds in eliminating benefit fraud, it will probably end up costing the Treasury money. It is one more potential pitfall with the Iain Duncan Smith benefit reforms.

A proper crackdown on benefit cheats is only possible by dramatically simplifying the welfare system — and that will probably lead to an increase in the take-up of benefits.

Here’s the rub. Error and fraud in the welfare system costs about £5bn. It’s a big number. But it is nothing compared to the £16bn worth of benefits and tax credits that are unclaimed each year.

The sad truth is that the complexity of the benefits system actually saves the Treasury money, at least in the short term. Government studies show that convoluted rules and impenetrable forms put people off claiming a benefit, even though they are entitled to it. Up to a quarter of people eligible for housing benefit, for instance, don’t submit an application. Read more

Cameron must learn the lessons of New Labour — Matthew Taylor/FT
Fears of double dip recession as Fed downgrades growth — FT
UK near the top of economic gloom league — FT
Time to tame the erratic Bank of England — John Redwood
Difficult cut? Take it to the Downing Street appeal court — Bagehot
Make the children pay for their milk — Ann Widdecombe
How the Labour leadership candidates became MPs — Labour Uncut
Never pay spooks or credit agencies for results — Kings of War