Informers and Benefit Fraud: A Libertarian View. by Sean Gabb

Free Life Commentary,
A Personal View from
The Director of the Libertarian Alliance
Issue Number 189
9th February 2010
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Informers and Benefit Fraud:
A Libertarian View
By Sean Gabb

I have just been sent one of the most disgusting newspaper articles I have seen this year. It is from today’s issue of The Guardian, and describes how the British Government is considering a scheme to reward those who inform on benefit cheats. Astonishingly, the Ministers seem to think this will make people more inclined to vote Labour at the next general election. If they are right, I am not sure how much longer I want to live in this parody of a country.

But, now I have said enough about the proposed scheme, let me explain what I find so disgusting about it.

The first is that, while every respectable person has a duty to report crimes against life and property, and to bear witness if required, there is much difference between this and calling into being an army of paid spies and police informers. Such people are not needed to report genuine crimes. Their general use is to act as the eyes and ears of an oppressive state. Established for one purpose, their use inevitably spreads to other areas. There is a natural temptation for paid informers to become agents of provocation. There is an equally natural temptation for them to become blackmailers. The resulting culture is one in which friends drop their voices when discussing anything in public that might be overheard to their disadvantage – and where new acquaintances, and even old friends, are viewed with suspicion. My wife grew up in Communist Czechoslovakia, where all this was a fact of everyday life. It was this, far more than the police and security services, who were responsible for a collapse of trust between ordinary people that has outlived is cause by twenty years.

It may be argued, that unlike drugs and prostitution, benefit fraud is not a victimless crime, but is theft from the taxpayers – but that, while they may be expected to report burglaries, individual taxpayers have no incentive to turn in someone who is claiming while working on the side. This is true, but needs to be seen in perspective. No one knows how much benefit fraud actually costs – the figure of £1 billion is believed to be a gross underestimate. However, even if the cost were five or ten times this figure, it would still amount to barely two per cent of total government spending. Most of this goes on paying for services that, where not useless, are harmful to life, liberty and property. Look, for example, at Trevor Phillips. In 2006, he was appointed Chairman of the Commission for Equality and Human Rights at a salary of £160,000. Doubtless, this has since gone up. Even so, his initial salary was equal to more than 2,488 weekly payment of jobseeker’s allowance at the maximum single rate of £64.30. In return for this, his most famous achievement to date has been to hound the British National Party into not insisting that its members should be white – while doing nothing to stop the various Black Police Associations from insisting that their members should be black. As if his published salary were not enough, Mr Phillips was revealed in 2008 to be the majority shareholder in Equate Organisation, which offers a “discreet, customised service” on how to handle the sort of equality issues that are investigated by his Commission. Oh, and the man who is employed to make then nearest things acceptable in public to puking sounds every time the name Nick Griffin is mentioned apparently keeps a bust of Lenin on his desk.

But if more loathsome and better paid than most of the others, Mr Phillips is just one among hundreds of thousands of New Labour apparatchiks given our bread to eat in return for oppressing us. I have no doubt these people collectively earn more than the £116 billion that is paid out every year on benefits. According to the probably fake statistics that attended the informer proposal, benefit fraud may cost every taxpayer in this country £35 a year. Well, I for one, can live with that. Once all the excise duties are paid, it is much less than a single tank of diesel for my car. The New Labour State costs me upwards of half my income, plus my liberty and my sense of nationality.

The only people who are really harmed by benefit fraud are those committing it. They lose yet more of their self-respect. This being said, the benefit rates are so awful that I fail to see how anyone can feed himself and his children without some cheating. Certainly, those on public welfare should not be able to buy cars and flat screen televisions. But they should be able to pay their heating bills and afford Christmas presents for their children without putting themselves into the hands of loan sharks.

And I do not believe that this sort of benefit cheat costs me anything approaching £35 a year. Everyone knows that the benefits system is being systematically milked by gangs of – usually foreign – criminals. Everyone knows that key parts of the system have recently been captured from the inside by organised criminals. Twenty years ago, a friend mine worked behind the counter of a Post Office in South London. He told me at the time how workers from the local benefit office used to come round to cash cheques they had written out to each other. I shall be most surprised if this turns out now to be the worst manner of inside fraud. And these are frauds that can and should be detected by ordinary policing. They do not require the machinery of a police state.

This brings me back to the informer scheme. I cannot help mentioning that it has been by Jim Reid, the Scottish Secretary. He is said once to have been a member of the Revolutionary Communist Party. Trust a Labour politician to have dropped all his proclaimed ends of raising up the poor – but not the police state means these ends were supposed to justify. I hate everyone of my generation who went into politics. Thirty years ago, they sneered at me and people like me as “selfish” and “abhorrent”. They spent the next twenty years insisting to each other and anyone who was stupid enough to listen to them that, when they came into their own, ordinary people would live in dignity and want for nothing. They have since then matured into the worst ruling class this country has seen since the Normans assimilated. The expenses scandal is nothing compared with how they have governed the country in public.

Now, I suppose I should offer some positive recommendations of my own for dealing with benefit fraud. I doubt anyone important is listening to me. But let it be supposed that some political party were to consult me on welfare reform – what would I suggest?

In the short term, I would set the police on catching the organised gangs of benefit cheats. Once these were in prison or deported to their countries of origin, much of the problem would have been solved. For the rest, I would advise looking the other way unless some minor fraud came to the attention of the authorities in the normal scheme of enforcement.

In the longer term, I would try to make most of the state welfare system redundant by lifting the tax and regulatory burden that stops the poorest people in this country from looking after themselves. And this is not – let me say at once – some soft version of the neo-liberal gloating about forcing welfare recipients into work by cutting their already pitiful benefits. Though it may always exist in a free society, the wage system as we have known it during the past few centuries is neither natural nor desirable. It is a cleaned up version of the bottom end of the feudal system, transmitted to industrial society via the management of domestic servants.

Middle class people often moan about the surly attitude of the working classes – about their unwillingness to do as they are told unless they are banned from union membership, or unless their unions can be taken over by middle class bureaucrats who then sell their members out. But I can think of no middle class person who would like working class conditions of work. I remember reading some years ago of a B&Q warehouse in Bristol. The casual workers employed there were electronically tagged. If anyone stopped moving for more than ten minutes, a computer shouted a message into his earpiece to report to the management office. No one does this sort of work unless he is desperate. No one who does it can have any pretensions to dignity. To say people have a choice whether to work for B&Q is a patronising joke. It is B&Q or Tesco, or some other demeaning job. It is like saying a man has a choice of meals if the menu shoved under his nose offers turd sandwich or snot pizza.

What I have in mind is letting poor people start their own micro-businesses in the manner described by Kevin Carson. Let someone start a coffee shop in the front room of his house. Let a family brew beer and sell it. Let people open little schools to teach reading and writing. Let them look after other people’s children. These things are currently not permitted. Or they are prevented by taxes and regulations that raise the fixed costs of doing business to the point where unreasonably large revenues must be generated year after year. Some people may get rich from doing this. Most will not. But enrichment is not the purpose. The real purpose is to give people the ability to survive without having to rely for all their income on salaried work.

It goes without saying that all subsidies to existing large businesses should be cut off at once – no more transport subsidies that allow goods to be moved about at less than full cost; no more interventions abroad to stabilise export markets, or secure access to artificially cheap goods and labour; no more taxes and regulations that can be carried by big business as cartellised costs, while flattening new entrants to the market; above all, no more limited liability laws that foster the growth of huge joint stock enterprises that are little more than the economic wing of the ruling class.

Where welfare is concerned, people should be enabled to join together in free mutual societies, accepting members and offering such benefits as may be agreeable to the relevant parties. This means no more taxes and financial regulation, and no more money laundering laws that, again, are little more than state cartellisation.

One of the failings of libertarianism – and I do not exempt myself from past guilt – is that we have too often argued as if actually existing capitalism was the free market. We may have conceded that business was too highly taxed and regulated, and that this frequently was turned to the advantage of the bigger firms in any market. But the assumption has too often been that a free market is effectively Tesco minus the state – that the wage system and big business were both natural and desirable institutions. As said, they are neither. The state capitalism that, in the 1980s and 1990s, we called Thatcherism or Reaganism was nothing approaching a free market. It was better than state socialism. But that is not saying very much. It has to some extent been our fault if ordinary people have been offered an apparent choice between a system in which a lucky few grow gigantically rich through connections and the ability to shuffle paper in the accepted ways, and ordinary people cannot buy houses and have children without going head over heels into debt – and sometimes not even then – and the present system of shadow boxing between multinational corporations and a huge superstructure of at best intrusive and at worst corrupt officials.

I might end by accusing the present Government of moral and intellectual bankruptcy. But this would be to absolve the equally if differently useless Tories. It would also be to concede that any of these people ever had anything good to offer. They are evil. Never mind the ideals they still sometimes ritualistically claim to guide their actions. All they have ever had to offer is a land fit for police spies and agents of provocation. They must all be destroyed – politically and financially.

NB—Sean Gabb’s book, Cultural Revolution, Culture War: How Conservatives Lost England, and How to Get It Back, can be downloaded for free from


  1. Furthermore, Sean:-

    Unlike you, I want to take the stigmatisation of such people further.

    (1) I would revoke their “pension rights”, whatever these may be. I doubt very much if any people charged at Nuremberg who got off, were allowed any pension money due to them from any Nazi schemes. They must not have a comforted old age, at the expense of people they charged money to earlier. They must learn to struggle, gaspingly, for a penny, and perhaps not get one. Not today, and perhaps not tomorrow either. I might even set up an “offenders-register” of people whose deeds offended us, like that chappy whatever-his-name-is on £160-billion a year, who runs the racist-commission-thingy that Sean mentioned – for they have offended you and me too. People like that, they smell, and they should have their noses rubbed in their defeat, and rubbed again, and again, and again…and then when they can’t take any more, rubbed again.

    These people are not like the defeated Germans and Japanese, most of whom were human underneath and largely redeemable, and who perhaps could be forgiven for failing to not vote for psychotic murdering ideologues. No. These people are of us, which means that they really do mean what they say and do, and have chosen evil deliberately and with foresight and planning.

    (2) I would charge them the costs of their doings as “reparations”. You and I and all of us know what the opportunity-cost of GramscoFabiaNazism has been, to date. Even if we do not, we can estimate it using the Fermi-Hart method. Some of this might be paid back by renting out ex-Bureaucrat buildings to micro-businesses, but not a lot I guess. The rest will have to be got from the ex-apparatchiks, their heirs and successors.

    This might help to reduce the incentive to want to aspire to desire to become an agent of a “state”.

    (3) I would keep them alive, until they have paid. I had a spat with the devil’s fragrant wife, “Bella Gerens”, of whom most of you know via her estimable blog, at the LA conference dinner on 24th Oct 2009: these people will be denied the comfort of death. Not till they have paid, every penny. And it won’t be taxation we demand – it will be an impost on their work, paid to such private individuals and their heirs and successors who can ever be found to have been otherwise disadvantaged.

    With interest.

  2. Excellent article although I do have one query:

    “no more interventions abroad to stabilise export markets, or secure access to artificially cheap goods and labour”

    Surely in a genuine free market export markets would be stable and there wouldn’t be any trouble accessing goods and labour from abroad i.e. the military intervention you criticise actually creates the conditions that would exist in the absense of a state re international trade.

  3. I couldn’t agree more with your comments about micro-businesses, and using your home for them. Currently, you would need to apply to the council for a “change of use”, FOR YOUR OWN PROPERTY!, which would undoubtedly be refused on some or other spurious grounds.

    I run my computer repair business from home, but I have to dissuade any customers who offer to bring their computers to me in person – if I were to allow even a trickle of strangers to call at my door, one of my neighbours would be bound to complain to the council sooner or later (whether or not it caused them any hurt or inconvenience), and this could in extreme circumstances, force me out of business. So much for an “Englishman’s home” being his castle!

  4. Everyone should develop some marketable skill, such as repairing computers (I suspect lots of people are already doing this and related things, so perhaps somethng else) mending old clothes (specially these days!) garden decking ripped out and burnt while you wait, or some such.

    There is no problem in starting one of these as a microbusiness. One ought just to “put the word about” via trustworthy friends and acquaintances.

    People will soon learn, via exposed cases of berayal, not to do work for people who have Extreme-Public-Sector jobs on things like “Councils”….or even for people that know some of these….

    The more millions of samizdat-businesses that operate under the State’s radars, the better: both for people’s self-reliance and confidence to weather out a State-Storm, and also for the chopping-away at the State’s windpipe, which is what it conseiders to be “its” taxation-base.

  5. I now hold the opinion that it should be absolutely possible to abolish at least half of all the state bureaucracy with no actual detriment to this country as a whole.

    I also think that the jobcentre and most of the Keynesian system should be abolished and a negative income tax system be introduced, administered by the tax office through a succinct system such as the BACS transfer.

    Regarding Mr Phillips, his overall effect on this country has been none other than to increase racial tensions and cultivate a refined form of racism and fascism. He should be dismissed with immediate effect. Excellent article Sean, cheers.

  6. Only half the State bureaucracy, Steven? Half is for wimps… what about most of the other half?

    I’d be prepared to keep departments like defence, perhaps some of the Foreign Office (which might report to the Prime Minister as is logical, and not to a Foreign Secretary who is as like as not to be a career-diplomat who has probably gone native in someplace where he didn’t oughter…) and maybe one or two others.

    Sean thinks, and I fear he’s right, that we could not abolish the NHS outright for fear of being assassinated, but it ought to be considered.

  7. If you wanted the other half abolished David, you’d only need say the word. The NHS would be dissolved into a voucher-type system, for which every person would be entitled to their healthcare through their NHS card (the NHS card at present is practically meaningless) and any qualified practitioner who is registered with the GMC would be able to levy costs for treatment, payable within three working days.

    Sure there’d be many millionaire physicians, but there’s nothing wrong with that if there are no waiting lists. All of the associated bureaucracy would be kept succinct according to market principles. And I hazard to think that it would cost significantly less than the GDP of Denmark per year.

  8. I’ve never heard of workers at the John Lewis Partnership being made to wear radio tags. It’s one of the most successful retail firms in Britain, with a workforce of over 60 000, and the workers own it themselves. The number of worker-owned businesses in Britain is growing slowly but steadily. For more information, visit The wave of the future? I hope so.

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  10. These people are low life, they would sell their own mothers for a bag
    of silver, lower than a rat!

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