The Child Poverty Action Group (CPAG) have criticised a plan announced by the Prime Minister to pay 'bounties' to credit reference agencies that help to expose benefit fraud.
David Cameron has defended the practice earlier, saying, “Private companies use all sorts of different means to make sure they are not defrauded, why should the state be any different?”
Asked about the civil liberties implications, he said, “I do not think people should be concerned”.
Cameron claimed that the plan could save £1.5 billion by addressing a combination of fraud and error in the benefit system. But it is not clear how this figure has been reached.
CPAG insist that benefit fraud is at an “all-time low”. They say it is a factor in less than one percent of all benefit claims.
“This initiative stigmatises the most vulnerable people and is likely to further reduce take-up of much needed benefits and tax credits,” said Gabrielle Preston, CPAG's Policy and Research Officer.
She said that a greater problem is the £16 billion that goes unclaimed by “some of society's most vulnerable people”. CPAG attribute this to the complexities of the benefit system.
A recent report from the Work and Pensions Select Committee referred to “the desperate need for fairer and faster decision-making to improve benefit delivery and take-up”.
“If the Government is to meet its 2020 commitment to end child poverty, it must protect children whose parents are entitled to receive benefits and tax credits,” said Preston. “It is unacceptable for politicians to inflame stigma and discrimination against some of the most vulnerable people in the country”.
The National Audit Office believes at least £40 billion of revenue is lost every year in uncollected taxes, many of them from the more wealthy members of society. Other estimates suggest the full loss may be over £100 billion per annum.
Preston insisted, “The decision to focus on benefit rather than tax fraud is unfair, unjust – and makes little economic sense”.
The Labour opposition's view on the 'bounty' proposal remains unclear, as the former Labour government proposed something similar earlier this year.