Benefit cheats are 'mugging taxpayers' says Osborne

Chancellor George Osborne today announced a crackdown on benefit cheats, comparing them to muggers robbing taxpayers of their hard-earned money.

A new drive to tackle benefit and tax credit fraud, to be launched tomorrow, will include mobile hit squads of inspectors being sent to areas where the problem is rife, he said.

And repeat offenders could have their benefits suspended for as long as four years.

Mr Osborne has said that bringing down the welfare bill will play a crucial role in easing the impact of state spending cuts as he tries to pay down Britain's structural deficit over the coming four years.

Fraud in the benefit and tax credit system is estimated to cost the taxpayer around £1.5 billion a year.

Mr Osborne told the News of the World: "This is a fight. We are really going to go after the welfare cheats.

"Frankly, a welfare cheat is no different from someone who comes up and robs you in the street. It's your money.

"You're leaving the house at seven in the morning or whatever to go to work and paying your taxes - and then the person down the street is defrauding the welfare system.

"This money is paid through our taxes which is meant to be going to the most vulnerable in our society, not into the pockets of criminals."

The new anti-fraud drive will make use of high-tech data-tracking techniques to track the "muddy footprints" of professional cheats, said the Department for Work and Pensions.

Some 200 additional inspectors are to be recruited to a new investigation service, which will detect the patterns of fraudulent activities by looking at shared data from government offices and credit reference agencies.

Welfare reform minister Lord Freud warned that no wrongful claimant will be let off under the new measures. Minor offenders will be issued with instant fines of £50 or more, while repeat fraudsters face a three-year benefit ban under a "three-strikes-and-you're-out" rule.

Investigators will also aim to seize more of the assets of those found guilty of benefit fraud.

Speaking ahead of the launch of the new strategy, Lord Freud said: "Fraud and error is costing the Government and the taxpayer £5 billion a year - this is unfair and unacceptable.

"We are reforming the system and stepping up our efforts to catch the benefit and tax cheats who are stealing money which is meant for the most vulnerable people in our society.

"When people are convicted we will get back the money we are owed by introducing tough punishments and stripping the assets of criminal gangs - my message to them is that benefit fraud is a crime that just doesn't pay."

Some £5.2 billion of taxpayers' money is lost through fraud and error in benefits and tax credits each year.

Fraud accounts for £1.5 billion of this total, said the Department for Work and Pensions, with £1 billion relating to benefit fraud and £500 million to tax credits.