“go after the rouges, help the people who made genuine mistakes” — #FFF (fighting furlough fraud)
Following criticism expressed against Sunak’s £100m Tax Taxpayer Protection Taskforce, Mr Uday Dholakia OBE, Chairman of the Leicestershire Asian Business Association (LABA), expands on business and community aspects, while an HMRC spokesperson provides a thought provoking official response.
Mr Uday Dholakia, a senior partner at Global Consulting (UK) has had a long standing interest in Better Regulation, from policing and the law society to the Better Regulation Office itself, including a stint at HMRC’s Charter Committee. He is the vice president for Air Passenger Association of India (APAI) and an Honorary Consul for The Republic of Malawi, to list a few of his many civic duties. Still, as Mr Dholakia puts it: “Better regulation is a civil passion for me”.
I spoke with Mr Dholakia over a Zoom call from his office in Leicestershire:
Uday Dholakia, It’s been a year since the start of the pandemic. What’s your perspective on what we experienced?
“From a community perspective, in the Leicester area, it has been the worst situation you could imagine. The bottom line has been the challenge for men and women who are on the margins of society who need to work to put bread on the table. Although we have a very good safety net in terms of public financial support, that does not cover enough to sustain families.
“It is almost been like a third world, where regulations and the politics of regulation have played a key part. It’s been something that the politicians locally and regionally haven’t had a grip on, simply because they didn’t have the depth on understanding of the communities.“
Did you observe signs of progress in terms of local government response?
“Towards the end of the second lockdown, I think the politicians got a little of a grip. The local politicians certainly felt that they had to get out and do things. One example being door-to-door knocking for vaccinations. That has give a golden thread of optimism, not only in terms of business, but in terms of community as well.
“Nationally and when talking to my colleagues overseas, I can sense that the offerings by The Chancellor and the immediate support has been welcomed and is quite unique. From the business community point of view, we are actually grateful for that.”
Have you found pathways to communicate your concerns up to towards decision makers?
“There is a sync between the government and the regional and local government. In the East Midlands there is no such thing as a regional government as such. In West Midlands, Andy Street, who is the mayor for West Midlands, is very focused. He goes in and out of Whitehall, lobbies for support, clears funds, etc.
“In the East Midlands, we are still, if I may use the word, pontificating about strategies and getting all excited about Freeport at the (East Midlands) airport, but we have a doughnut effect like the United States where the urban areas are hollowed out and there is nothing much been done here.
“I have been articulating with the Prime Minister’s office to set up a task-force, for example, to look at Leicester’s textile industry — to bring (together) all the stakeholders and regulators. I have reached out to HMRC, who are keen to support by being members of this task-force. But I’m sorry to say that leadership amongst the local politicians are not that good in reaching out and galvanising all interests to take the region forward.”
What has been your response to these challenges?
“I’ve been, as a human being and as a citizen, one who is really grateful for the opportunity that this country has given me, and absolutely have taken the opportunity to put something back when I have given the platform,
“My passion remains that we should adhere to the law, do the right things, and given the opportunity, we should have the leadership to economically and socially take the agenda forward.”
On adhering to the law, what’s your take on the rise in Furlough Fraud and plans to fight it?
“When I was in the HMRC’s Charter Committee, I always advocated that the cuts that were made to the human resources at HMRC were too fast, too big. And that has come to fruition, in a sense that now they looking to recruit 1200 people quickly.
“Operationally the men and women who work in HMRC are the top of their game — they know what they’re doing. The clawback strategy, for fraud or misuse of funds, was already in place. It’s the politicisation of it that’s been capturing the imagination of the media.”
What is your analysis of the Furlough Fraud landscape?
“My understanding is that there are four challenges. The first two are simple: people who have been claiming more than they are entitled to; and people who were claiming whilst they, or their employees, were working.
“In terms of the “Eat Out to Help Out” scheme, there always was a propensity to claim more, because a lot of these businesses are operating on a very tight margin.
“The last challenge stems from the fact that there is an element of society who has claimed loans and got money with no intensions of paying it back. There is a clear case of go after the rouges and help the people who made genuine mistakes.
“But if people have done things more or less correctly, leave them to be. We live in challenging times and running a business takes courage, resilience and mental agility.
I would like to see more light-touch regulation (which emphasises co-operation rather than confrontation — dk), where people, in the context of not having access to accountants during Covid, probably made genuine mistakes.”
HMRC: tackle deliberate fraud
At this point, we’ll pause the tape on Mr Dholakia’s interview and switch to a response provide by an HMRC spokesperson, which seems to be directly pertaining to the issue of selective enforcement:
At the Budget, the Chancellor committed £100 million to HMRC to tackle the minority who deliberately claim help scheme money they’re not entitled to.
The language seems to echo the Mr Dholakia’s position that advocates “going after the rouges” rather than engaging in an all out clawback operation.
HMRC: fraudulent claims are unacceptable
In more general terms, and in relationship to concerns expressed regarding the plan’s viability, an HMRC spokesperson adds:
The Coronavirus Job Retention Scheme has provided a lifeline to millions of people across the UK and fraudulent claims are unacceptable. It is taxpayers’ money and fraud limits our ability to support people and deprives public services of essential funding.
HMRC: please contact us
Moreover, the HMRC is soliciting information from people concerned about their employer abusing the job retention scheme:
We’d ask anyone concerned that an employer might be abusing the scheme, or anyone with information about suspected fraud, to please contact us. All information is assessed and the most appropriate course of action taken.
HMRC: disclosure protection
In terms of the protection offered to people disclosing information on suspected fraud to the HMRC, an additional clarification was received:
Such reports are subject to the statutory duty of confidentiality imposed upon officers of HMRC by section 18 of the Commissioners for Revenue and Customs Act 2005 and any information reported to HMRC is then handled in accordance with the relevant law, including the Data Protection Act 2018. Moreover, such reports may also amount to disclosures protected by the Employment Rights Act 1996 (as amended by the Public Interest Disclosures Act 1998).
Uday Dholakia, what is your hope going forward?
“Mahatma Gandhi use to say that the success and civility of society is measured by how it treats the most marginalised and impoverished people.
“I would like to see that, while we get all excited about big projects, we don’t lose sight of what is important.
“It is what ordinary men and women will be experiencing going forward, in terms of their quality of life, their ambition, in terms of earning a basic living, their access to support from healthcare — and I don’t just mean physical healthcare. Mental challenges are serious challenges that face us.
“Yes, the vaccine has brought a degree of confidence. Yes, a lot of men and women who have courage in business would like to do new things or think differently or explore and embrace e-commerce — all good news.
“But, I would like to bring everything down to the very lowest form of measurement and then build everything above that.
“Ultimately, we do all these things to satisfy basic human needs, to feed ourselves, to have dignity, to get up in the morning and feel valued.”
