Britain has a benefits problem. In 2013 the government paid out approximately £5.9 billion on unemployment benefits, and the number is expected to consistently rise over the next 5 years. The government targets those on Jobseeker’s Allowance and cutting back on housing benefits, and so the national mood seems to be that people on benefits are holding us back. While there may be some truth to this claim, the effect the jobless are having on our economy is greatly exaggerated. While the outrage over benefit recipients continues there are some corporate forces in this country committing massive benefit fraud that costs the government billions each year.
One of the cornerstones of our economy is government giving money to, or relaxing taxes on, certain corporations so that they can do business more efficiently. It’s seen as a win-win – corporations can spend more and therefore the government makes more. I’m oversimplifying it a bit (subsidies are used for a great number of reasons) but nonetheless it’s a form of investment that is theoretically ideal for both state and industry. The sad reality is that the government gets stiffed big time. As the Independent reports, nearly £4.7 billion that should have been paid in corporate tax last year never made it to the government. This doesn’t even include “profit shifting schemes” because the government doesn’t class them as tax avoidance, and so the actual cost could be as high as £12 billion. The range of corporations responsible for this tax dodge include not just the usual suspects Amazon and Google, but power giants as well, and it happens every single year. Amazon alone paid a measly £2.4 million in tax on its £4.2 billion in sales last year. To add insult to injury, Amazon also received more in government subsidies than they paid in corporate tax in the same year, an injustice committed by countless other big businesses.
All the while, the government puts pressure on the poorest individuals in the country. They instigate the bedroom tax which has put over 50,000 people at the risk of eviction, they plan to stop benefits full stop for all under 25’s, and they plan to disband the WRAG group which delivers benefits to those unfit for work. Where are the crack downs on Amazon and Scotia Gas?
The question we must ask ourselves is this: is it right to demonize the poor and the unemployed when corporations that rake in billions each year refuse to pay their fair share? Corporate tax avoidance is a bigger burden on the state than some distant image of a weed smoking Jeremy Kyle Show guest many people have. Of course those who cheat the benefits system should be punished and reforms are needed, but the misplaced moral outrage towards the poor is distracting people from the real thieves.