British labor claims bias in probe on aid

Britain's civil-service unions are charging the Conservative government with using excessive muscle to clamp down on welfare frauds while ignoring massive tax evasion by well-off individuals and companies.

Claiming that the Thatcher administration has shown "political prejudice" against the poor by appointing an extra 1,000 government inspectors to check on suspected welfare cheating, the five main public and civil servants' organizations recently issued a joint document charging the business world with vast income and value-added tax frauds. The civil servants' unions have suggested the Conservatives are using an estimated annual L50 million ($166 million) swindle by welfare claimants as an excuse for a general crackdown on the extensive social security system built by Labour governments.

Union spokesmen have further alleged that the Tory administration's policy of toughening up the scrutiny of benefit claims is an attempt to switch public attention onto the scroungers and away from what labor leaders see as the scandal of business people dodging payment of hundreds of millions of pounds in taxation. Union officials have suggested that the Treasury loses between L5 billion ($11 billion) and L11 billion ($25.6 billion) annually in tax evasion or systems of fraud operated by companies.

Union leaders want the government to reverse its policy of reducing staff in government taxation offices and instead bring in an extra 2,000 inspectors. The unions have claimed that additional supervisors could bring in an extra L500 million ($1.6 billion) in direct income levies and value-added tax.

(The leader of the Inland Revenue Staff Federation said recently that poor manning levels in taxation departments meant that only 2.7 percent of private company returns could be properly examined, and the spokesman added that 80 percent of the forms submitted had to be adjusted by inspectors.)

Union spokesmen have said only a small percentage of 25 million claims made annually have proved to be fraudulent.

Yet most welfare experts utterly refuse to accept the unions' claim that only L4 million ($9.3 million) is taken from benefits offices by cheats and that the government's reckoning of a L50 million swindle is thought to be a more accurate assessment of fraud.

Asked about the civil servants' charges against private companies, a professor at a Scottish university said the tax-evasion accusations were exaggerated and designed to discredit free enterprise. The professor said civil service unions operated benefit programs for their members which lessened the effects of taxation on trade union members.

The civil servants' pamphlet on the government's "soft" handling of company taxation is part of the fierce political arguments going on between the Trades Union Congress and the Thatcher administration. The unions have been particularly angered by a government plan to reduce social security payments to the families of striking workers and thus force labor organizations to pay far greater benefits to members during stoppages.

Most observers accept that tax avoidance by the rich has steadily increased, but some commentators say trade union critics are motivated by social jealousy and credit the business world with little community concern.

These commentators would quickly point to the Gulf Oil Corporation's recent gift of L250,000 to the Scottish National Orchestra as an illustration of social action by big business. Many British companies have also shown a good sense of national responsibility by taking on an extra quota of young unemployed people.

The government's determination to prove the real extent of social security cheating has received massive press backing, but the Scotsman newspaper has refused to join in the general outcry and has regularly accused the Thatcher administration of discrimination against the poorer sections of society, a stand many consider quite exceptional for a big-business newspaper.

Most newspapers have given great publicity to the government's campaign against the scroungers, yet the popular press has only briefly reported the unions' allegations of tax dodging by companies.

A recent TUC report has said an average strike payment just short of L1 was paid to union members in 1978. Some observers might be inclined to say that such an extremely low strike payment from union funds proves that Britain is in the middle of the international league when it comes to stoppages, but other commentators could suggest that the TUC's L1 figure is evidence that the social security system is being used to help strikers. (Single people on strike are not entitled to state benefit, and relief is confined to dependents of workers who withdraw their labor.)

The general crackdown on welfare by the Thatcher administration is certainly connected with the civil servants' unions engaging in a counterattack of charges that Tories wink at massive tax evasion by the well-off and by private companies.