Governments in Spain and the UK clamp down on the submerged economy

Murcian Police carry out identity and legal status checks

2010-03-11

In times of economic crisis, the same pattern usually develops.

People lose their jobs, so they start working on the black, earning a little bit on the side and ceasing to pay taxes into the government system.

They do boot fairs and street markets , clearing out unwanted junk to release surplus cash, and many start selling other peoples goods at the street markets without them even being aware of it.

Crime goes up, direct theft increases, fraudulent claims increase,  so premiums go up, as people live however they can.

Legal business complain they can't survive and ranks close, each protecting their own little corner.

The governments listen, realise just how much money they're losing, so start clamping down on fraud, and the black economy at every level.

The economy sorts itself out again and off we go into the greed boom bust cycle, with no lessons learnt.

 

This week we've had two further major clampdowns on insurance fraud in Murcia. A couple of weeks ago we posted an article about the increase in insurance fraud across the region, as hard-pressed Spanish families faked violent robberies to defraud the insurance companies, and this week there have been more, as the police clamp down following complaints from insurance companies and the soaring rate of "incidences of theft" reported to Spanish police.

With 32% of unemployed in the region receiving NO benefits or money at all, what do the government expect?

 Click to read: Police policy of zero tolerance for time wasters

Last weekend we received reports from 3 different markets that police were taking down traders details, including their NIE numbers , in an attempt to clamp down on not only those working on the black, but also to try and detect stolen goods.

All week the police reports have flooded in, 1.5km of stolen cable from municipal lighting, yet more car loads of oranges in Cartagena, more tools in Totana, and enough cannabis growing in the campo to put a smile on the face of the whole of Murcia with a fair wind behind it.

Click to  Read. Police resources squeezed by scale of orange rustling.

And for the first time ever this week, a tourist office asked us to prove that we were a legal, trading business before allowing us to put publicity leaflets into their premises and another advertiser told us someone had contacted him after seeing his advert in a british language magazine asking for proof that he was a legal business, in a fashion which he found both unnerving and worrying. He is legal, but it's the first time anyone has rung him and queried his legal status after seeing his publicity.

 

Eye on Spain, the ex-pat forum site is this week running the following publicity from the British Government, which we've re-produced below for your information.

 

We're in the part of the cycle before the economy goes back to greed boom bust, so if you're a beleagured "business", visible and swimming in the sea of the submerged economy, there's buried treasure beneath the waves, and the seabed could be safer than the surface at the moment.

 

UK Government ad.

Benefit thieves going abroad

It's not if we catch you, it's when

The British Government takes benefit theft seriously.  There is no hiding place for anyone who thinks they can get away with stealing taxpayers' money because they are abroad.

 

It's not if we catch you, it's when

We are: 

Tracking down benefit thieves wherever they are

Working closely with authorities abroad to identify benefit fraudsters

Following up calls to our new UK Benefit Fraud Hotline in Spain

It's estimated that between April 2008 and March 2009 £55m was lost as a result of benefit fraud overpayments to British claimants who have not told us they are living or travelling abroad - that means British taxpayers are financing the fraudsters' overseas lifestyle.

 

If you know anyone who is stealing benefits, we want to hear about them

The new UK Benefit Fraud Hotline in Spain now makes it easier to report benefit thieves on 900 554 440. Lines are open 8am to 4pm Monday to Friday. Your call is free and confidential.

 

If your circumstances have changed

Remember - if you are in receipt of benefits, it's an offence not to tell us if your circumstances change, for example:  

 

you are going or living abroad

you get married, or if you separate, divorce or are widowed

you start work, increase your earnings or your savings?

If you don't tell us it could mean prosecution, imprisonment and even the confiscation of your home and possessions.

For more details visit the benefit theft website.

Back to News