Trade unionists have accused David Cameron of using benefit fraud as "cover for swingeing cuts to genuine claimants."

Speaking last week Mr Cameron described benefit fraud and error as "the one area of ingrained waste that outranks all others."

However the TUC said that, while all fraud should be condemned, the cost of benefit fraud was dwarfed by that of tax evasion and avoidance.

Mr Cameron claimed benefit fraud and errors cost the country £5.2 billion annually.

However the National Fraud Authority cites government figures for 2008-9 which show losses through benefit fraud of £1.1bn.

The most recent figure from the organisation Tax Research put the figures for combined tax evasion and avoidance at £95bn.

A TUC spokesman said: "All fraud is wrong and should be tackled, but benefit fraud accounts for less than 1 per cent of benefit spending and is dwarfed by the amount lost to tax evasion.

"If the government is serious about raising revenue it should put more resources into tackling tax evasion rather than using benefit fraud as a cover for swingeing cuts to genuine claimants."

The PM was also criticised for the government's brutal public-service cuts and his failure to tackle the drain on the economy of the financial sector.

Writing in the Sunday Times Mr Cameron said: "Even with reform, the truth is there will be some things that we genuinely value that will have to go because of the legacy we have been left.

"I don't like that any more than anyone else, but this is the reality of the situation we're in and it's the duty of this government to face up to it."

But campaigners argued that the imposition of a banking tax would remove the need for the savage public-sector cuts.

On Monday, the Robin Hood Tax campaign announced the launch of its own costs consultation mimicking the government's "spending challenge" which seeks suggestions on which cuts should be made to reduce the deficit.

Campaign spokesman Max Lawson said: "Massive cuts in public spending have been presented by the government as necessary for the UK to balance its books, but we believe that there is a better alternative.

"A Robin Hood Tax on the financial sector could raise at least £20bn a year in the UK and part of the revenue raised could go towards helping reducing the deficit, making the worst cuts unnecessary.

"It would target a sector that has played a key role in creating the mess which we are in and has the resources to pay as the big profits and bonuses announced recently show.

"The government cannot claim that we are all in this together unless it makes the financial sector pay a proper part in filling the hole in the nation's budget."

Monday 09 August 2010

by Paddy McGuffin