Letter: Subsidy for the exploited employee

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From Dr Hartley Dean

Sir: Last Wednesday (11 October), Peter Lilley duly observed the traditions of the Conservative Party Conference by raising the spectre of social security benefit fraud in order ritually to decry it. Obviously, benefit fraud cannot be a good thing, but what kind of a problem is it?

According to the British Social Attitudes survey, around a third of the population agrees that "most people on the dole are fiddling". In reality, the Social Security Benefit Agency's own best evidence is that around 5 per cent of income support claims, and around 3 per cent of unemployment benefit claims, can be proved to be fraudulent.

I have been involved in an Economic and Social Research Council-funded research project, ending this month, that has examined the attitudes and motivations of fraudulent benefit claimants. The findings suggest benefit fraud is certainly problematic for those involved in it, but that it is not necessarily the kind of problem Mr Lilley paints it to be.

First, there is no evidence that the current level of benefit fraud signals any erosion of the work ethic on the part of perpetrators, nor any lack of desire to participate in conventional lifestyles. The one thing guaranteed to dissuade virtually all our respondents from fraudulent claiming would have been the opportunity of reasonably paid employment.

Second, in a high proportion of cases, low-paying employers were directly colluding with fraudulent claimants. We met young people whose only prospect of reliable employment was with the kind of employer who not only expected them to "sign on", but gave them a half day off every fortnight in order to do so.

From the Government's point of view, it might be argued, the existence of benefit fraud is functional for its labour market strategy. Allowing benefit fraud represents a covert way of subsidising exploitative employers in a hypercasualised labour market, but without damaging labour supply incentives.

From the claimants' point of view, benefit fraud can be a stressful and largely unrewarding activity. Most of those to whom we spoke were uncomfortable about what they did and had not planned their fraud in a particularly effective way. For them, benefit fraud was not part of any sort of lifestyle choice.

Fraudulent claimants' notions of citizenship and responsibility were often highly ambiguous. Their conceptions appeared to have been impoverished through an erosion of the popular ideals of democratic welfare citizenship. This, of course, could signal a deeper problem for society at large. It is not, however, a problem that is usefully addressed by such devices as computerised "smart cards".

Yours faithfully,

Hartley Dean

Reader in Social Policy

Department of Social Studies,

University of Luton

Luton

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