Early in April 2013, the Chancellor, George Osborne's ministerial car was photographed, in a service station's disabled car parking bay. The story was subsequently reported in the tabloid press. On the surface, this should perhaps be seen as an accidental error or at the worst very minor transgression and not one to cause a major embarrassment for the Chancellor. Arguably, there might have been any number of justifiable mitigations for how this could have happened. Is it simply that these weren't reported fully in the press that latched onto the story? For example, if there was a chauffeur or driver involved, it might not even be something that the Chancellor was aware of until the tabloids picked it up. What matters of course is how the public perceived the reports.

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Does this perception of such a small act, as reported, show that this inability to adhere to one minor rule is how rest of us might act in similar circumstances? After all no-one got hurt by this infringement and many might say that rules like this are 'an inconvenience' and others as 'not important' or 'petty'. However, some of the Chancellor's political critics might be less charitable and ask if such actions are saying, "Do as I say, not as I do".

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So do these same commentators feel that the practice by many different elements of society in compromising minor rules cut to the heart of why serious fraud is so high in the UK? Might it just be the way that 'human nature' is in the UK culture today? Is it because nearly all people, the politicians apparently not excluded, will do whatever they think they can get away with – or that they can justify to themselves? So in search of an answer let's delve deeper.

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Blue Badge Scheme & Travel Ticket Fraud in UK

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Back in 2011 the Government made much of Blue Badge fraud and abuse, spending millions of tax payers' money on a national computer system that was to reduce fraud and abuse. Supermarkets were amongst those who supported the proposals, as they knew that abuse of disabled parking generates high levels of complaints from disabled drivers and passengers who are prevented from parking in these spaces. For example the charity, Scope, was quick to complain about the reports of the Chancellor's alleged disabled bay parking as it was reported in the press.

Norman Baker, the Transport Secretary said at the time, "I am delighted to have secured the support of the major supermarket groups and to know that they share my view that abuse of Blue Badge parking bays needs to be tackled, protecting customers who rely on such spaces. I hope other large retailers will now follow suit and consider what action they can take to help their Blue Badge customers." Ironically the National Blue Badge system has not really helped private sector car parking operatives in being able to prevent abuse. And while it may have reduced fraud it has not, many claim, reduced abuse.

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But such flexible attitudes towards, what is seen as 'low level' fraud, rests not just with abuse of the blue badge system. Ticket fraud is another example. Large numbers of people will attempt to travel without a ticket or without a proper ticket, believing that it is only a minor infringement and NOT a £multi-million problem or theft.

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On 19 April 2007 between 4pm to 8pm a high-visibility operation sanctioned by the Mayor of London to tackle fare evasion on London's transport network took place at Kensal Green station. It resulted in 254 people being found travelling without a valid ticket, six arrests were made in total, three for fare evasion and three for unrelated offences. 2,636 passengers were checked and the results showed that ticket evasion was much higher in percentage terms than benefit fraud.

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Anyone who travels regularly on the trains know that you have to possess a valid ticket before travelling. Sometimes, at smaller stations, it is simply not possible to purchase in advance, but the inspectors are well versed in station lore to know when someone is pulling a fast one or not.

In October 2012 the Chancellor, (yes, it is that man again), boarded the London Train at Wilmslow along with his assistants but instead of turning to sit in the second-class carriage for which he'd paid, Mr Osborne apparently took his place in First-Class carriage; where he stayed until he was confronted by a ticket inspector who insisted that he pay a surcharge for First-Class travel.

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Now, I am sure Mr Osborne could more than amply justify the correctness of his actions. However, by being reported in the press, the public became aware of just one side of the problem through tabloid headlines. Some pundits armed only with these headlines might have thought that this could be an example that most people will try and get away with a minor transgression if they can. No doubt if they had both sides of the story they would probably have felt differently.

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However with the news covering so many transgressions by all manner of people, might the expectation for most be that they will not get caught if they tried to transgress rules themselves in their own lives? One has then to ask the question, as to how far such minor avoidance differs from deciding to commit a more serious fraud?

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Blue badge abuse and ticket evasion also shares several similarities with other areas where there is high level fraud. Benefits, mortgage application, insurance claims, tax evasion, petty pilfering and expenses frauds are all subjected to what used to be known (especially by people who felt that they were better than to be labelled as fraudsters) as 'fiddling' or even "perks". But are these not all a path to bigger things. Does acceptance of such minor transgressions underlie our entire culture of fraud and lead some to be tempted into full scale financial criminality as seen with credit cards or in the banking sector.

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"As Bill Trueman CEO of fraud watchdog UKFraud (www.ukfraud.co.uk) said, "There is a progression here. People learn to defraud through smaller offences, with 'weak' self-assessed excuses and then apply what they have learnt to far more major things as they progress through life. Today, white lies and other transgressions might all progress into more sinister frauds tomorrow – equally self-excused. Naturally we expect to look to our leaders to set an example. However when you hear of then often getting caught-out in fully public gaze, over expenses for example, it can risk damaging the reputation of the very public bodies they represent. Worse still, it might set an inappropriate example in showing people that this behaviour is somehow 'normal' or even acceptable. It encourages the public to think they are only doing what everyone else is doing. It would be interesting to see if amongst the public funded plans of the UK's National Fraud Authority if there are any plans to introduce an educational or awareness campaign to educate the public as to the reality and the risks of Fraud.

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"We need to stop people from thinking that 'minor fraud is ok'. There really does need to be a zero tolerance approach. When one looks at the MP expenses fiasco, one can question whether things that start as minor offences lead on to expenses theft. It is not about whether 'one can afford it', it is not about whether it is serious or minor fraud; this is all about moral leadership and ethical values.

"The 2013 Experian fraud report shows that mortgage fraud is on the increase for the sixth consecutive year and that insurance fraud remains high. The report suggests that most fraud attempts are by those on lower end incomes. However, this is not surprising as pressure on low earners will drive the rise in numbers at that end. However, fraud by those that are better off still remains at the same levels. It would be interesting to see whether these mortgage fraudsters started out parking in disabled spaces, progressing through ticket dodging and expenses theft, and into mortgage fraud. What do they then do next?"

The National Survey of Retail Crime and Security showed that total 'shrinkage' (which is actually another one of those words that hides the crimes of theft or fraud) was the equivalent to 24.1% of retail profit, with employees stealing as much as customers.

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Benefit fraud, is believed by the people to run at about 21%, whereas it is actually only measures at 0.7% - depending on who you believe! This includes prosecuted fraud and general abuse. In all, 54% of MPs were found to have abused claims. Is it just that there were better controls preventing benefit fraud abuse than there were for member's expenses?

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The key issue is that the excuses used by MPs and Benefit claimants for abusing the system were broadly the same: "I didn't understand the rules", "No one told me it was wrong", "Everybody was doing it". But of course 'no-one in their right mind' believes that claiming from public funds to pay for rent or a mortgage that you are not liable for, or through failing or under declaring your income; is an acceptable practice.

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Similarly, no one believes that manipulating international exchange rates to benefit your company or to miss-sell products that you know that people do not need or can afford is anything other than fraud. But there, by the grace of God, goes everyman. Everyman is quick to deny people who have a real entitlement of their parking spaces or their school places for their own gratification. Everyman will also to try and travel first class on a second class ticket, or to look for ways to claim more expenses than paid for as a 'perk of the job'. It is a natural proclivity as is the desire to prevent others from taking advantage of the system.

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In a robust speech in October 2010 the Chancellor of the Exchequer said of benefit fraudsters "Frankly, a welfare cheat is no different from someone who comes up and robs you in the street. It's your money... This money is paid through our taxes which is meant to be going to the most vulnerable in our society, not into the pockets of criminals."

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And he is right, the fare evader, the expenses thief, the shop-lifter all share something in common with the benefit fraudster, the insurance manipulator, the credit card fraudster or the tax evader. They all want something for nothing – or a bit more, for a bit less!

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Malcolm Gardner
Senior Director at the Welfare Reform Club