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Through its own efforts and inattention, the British government has made fraud one of Britain's largest industry sectors. But it's chief response is to make you pay for it, rather than stop it, because the boom in fraud is also reflected in a boom in political donations, even while the rest of the economy is flat...
In 2021, the financial cost of fraud was £137bn, making it the UK's sixth biggest industry sector. There were 3.7 million incidents of fraud in England and Wales in 2022, yet 86% of incidents are estimated to go under-reported. Virtually all UK adult internet users say they have seen fraudulent content. The UK was third internationally in the growth of attempted digital fraud between 2019 and 2022. The UK government's own contribution to fraud has been enormous, but not in a good way. According to the National Audit Office:
Most public bodies do not know how much fraud they face and cannot demonstrate that they have the correct level of counter fraud resources...
The amount of fraud in government expenditure that was reported in the accounts audited by the NAO rose from £5.5 billion total in the two years before the pandemic (2018-19 and 2019-20) to £21 billion in total in the following two years.
Of the £21 billion, £7.3 billion relates to temporary COVID-19 schemes. These estimates are in addition to an estimated around £10 billion of tax revenue lost to evasion and crime every year. The Public Sector Fraud Authority (PSFA) ...estimates that in 2020-21 there was between £33.2 billion and £58.8 billion of fraud and error in government spending and income unrelated to the pandemic.
These figures likely understate the scale of the problem because they exclude any amounts that are too small to be reported in the context of any one set of accounts and no estimate was made of the level of fraud in the Department for Health and Social Care’s COVID-19 spend.
Not only is the UK government careless with how much taxpayers' money is lost to fraudsters, it is finding new ways to distribute the burden among consumers: in other words, you are paying for industrial quantities of fraud through both your income and expenditure while the government actively contributes to the problem. The Online Safety Act is designed to shift the burden of addressing online fraud onto tech companies, whose only means of recouping their costs is via consumers. Similarly, the Payment Systems Regulator has been tasked with ensuring that banks and payment service providers - and ultimately their customers - pay for increased 'authorised push payment' fraud.
In these circumstances it should come as no surprise that the UK government is also resisting checks on the sources of political donations. By creating a boom in dirty money, and leaving key loopholes for dodgy donations, the politicians have experienced a boom in political donations:
"...donations have almost trebled... rising from £41 million in 2001 to £101 million in 2019... with 60% of donations in 2019 coming from private individuals.
The increases in donations have favoured the Conservative party, which had £27 million more in financial resources than Labour in 2019, even when taking account of the public funding received by Labour (known as ‘Short Money’) that is designed to balance resources across the parties."
You see what they did there?
