Chancellor Rachel Reeves’ decision to scrap the winter fuel allowance shows odd priorities. She singled out honest pensioners to save £1.5billion a year, while saying nothing about crooks who claim £8billion of state benefits dishonestly.
PM Keir Starmer and chancellor Rachel Reeves can’t afford to go easy on benefits fraud (Image: Getty)
Labour defends its move to scrap the winter fuel allowance for 10million pensioners by arguing that many are wealthy and don’t need it. The problem is, several million do need support with their fuel bills but won’t get it now.
In future, only those who claim means tested state pension top-up pension credit will get the payment worth £200 a year (£300 of over 80).
Around two million pensions who get just above the pension credit income threshold of £11,343.80 a year will lose it altogether.
That’s not wealthy in my book. Campaign group Age UK agrees. It wants Labour to reverse the cut.
Reeves defended it – and everything else she does – by saying she has to plug the £22billion “black hole” she allegedly discovered after the general election.
If things are that bad, it’s strange that she doesn’t go for an even juicier target. One that could save hard-pressed taxpayers more than five times as much. And smash the UK’s fastest growing fraud of all.
Nobody hates benefit fraudsters more than honest claimants. They rightly think it cast a cloak of suspicion over them.
Yet many on the left see benefit fraud as a Tory issue, and play it down. They would rather go after wealthy tax dodgers instead.
Reeves is certainly doing that, with plans to tighten loopholes and target complex offshore schemes.
I don’t have a problem with that. If some people fiddle their taxes the rest of us have to pay more.
Yet Reeves needs to be consistent. If she’s squeezing honest pensioners and tax avoiders, she needs to chase benefit fraudsters with the same vigour.
Reeves said she’d go after benefits cheats during the election. She’s been quiet since Labour won.
In the past, the left has downplayed the impact of benefits fraud because the payment “error rate” was just 0.7% of the annual bill.
Since the pandemic, the error rate has quadrupled to 2.8%, and it’s climbing steadily as more people make more crooked claims knowing they’re likely to get away with it.
They’re having a field day with universal credit.
In its annual report, the Department for Work and Pensions (DWP) said it expects benefits fraud to increase by 5% every year for at least the next five years. That will add up to a staggering £30billion in total.
That’s money Reeves sorely needs.
Benefits fraud spiralled under Tory PMs Boris Johnson and Rishi Sunak, who threw cash around like confetti. Covid fraud also happened on their watch, costing the nation £7.2billion.
Reeves has said she’s going after that, too. Good.
As she lines up tax hikes in her autumn Budget on October 30, she needs to be consistent.
The DWP has a poor record on detecting fraud. It failed to spot the five Bulgarians who stole £54million from UK taxpayers by creating 6,000 fake identities.
The UK’s biggest benefit fraud gang was only unearthed by an honest policeman in Bulgaria, who wondered why locals were suddenly building mansions.
Every pound the DWP spends on counter fraud and compliance brings in four times as much – around £1billion last year. Reeves needs to beef that up.
If Labour is going to get tough, it needs to get tough across the board. It can’t just go after easy targets such as honest pensioners and taxpayers.
Reeves has come for your winter fuel allowance – now see where she will tax you next.
