Government misleads taxpayers on benefits again

Mon, 03/11/2014 - 13:19 -- nick

More information on the cost of public services should be a good thing - but this value depends hugely on how it is presented.

For the first time, this week PAYE payers will receive a breakdown of where their tax money goes.

The BBC shows a breakdown of the figures for someone earning £30,000 a year, and sitting right at the top is a whopping payment of £1,663 for 'Welfare'.

This fits with the coalition's narrative that the annual benefits bill is unaffordable and a huge drain on Britain's resources, and risks misleading taxpayers who have been told by politicians and newspapers that the problem with welfare is one of unemployment and fraud.

But there is more.

While pensions have been separated, no other cost has, meaning the category includes in-work tax credits, money for disabled and sick people, child benefit, winter fuel payments for old people, and a range of others.

It is almost as if the government wants Monty Python's 'what have the Romans ever done for us' sketch to be replayed by those in work when looking at this bill.

"I mean, apart from the tax credits, the child benefit, insuring me against losing my job.."

TUC General Secretary Frances O'Grady pinpointed this issue, saying:

"The chancellor is relying on the fact that many people think spending called welfare all goes to the unemployed."

She didn't say that George Osborne's party has been deliberately provoking this thinking along with their friends in the right-wing press, for whom no story of fraud can go unreported despite the fact that unclaimed benefits dwarf errors and fraud combined.

There is one other issue the government appears to have misplaced.

It rolls together income tax and national insurance in its breakdown despite the fact that these are paid separately, and fund different things.

NI is partly an insurance premium to safeguard against unemployment and the sickness and disability that stop you working, so some of the 'welfare' money is effectively payouts covered by premiums, and this has been made deliberately unclear by the presentation chosen.

Unsurprisingly, this most anti-benefits of all modern governments has taken the concept of transparency and turned it on its head.

More information should be a good thing, but misleading information is worse than no information at all.