A benefits system insider writes ...

Every private hire cab driver I've dealt with states they earn around £100 p.w for 30 hours; private hire has to be booked through the cab company for the insurance to be valid, so there is a record of how many hours and jobs they have done, but we don't ask to see it (nor do the Inland Revenue), so we are naively relying on their honesty. If I don't pay them they just appeal.

The other scam is the 16 hours rule, the minimum need for maximum tax credits. So everyone who works in a takeaway, restaurant, corner shop all work 16 or 18 hours on minimum wage; I'm not allowed to ask "why do you only work part-time when you have a family to support" so they get away with it.

Take a worker in a takeaway with a family. He works 18 hours for £110 per week but when you add up tax credits, child benefit, housing and council tax benefit he gets nearly £27,000 a year. Doesn't pay a penny in income tax or national insurance, all his rent and council tax is paid. It would probably be cheaper to pay his JSA (or around the same amount) but then he would add to the unemployment figures.

Romanians can't claim out of work benefits so they say they are self-employed and can claim tax credits and housing benefit. Their "self-employment" is selling The Big Issue. More and more of them are doing this.

The Welfare State is no longer fit for purpose.

On this basis our conservative figure of £3.5bn a year for benefit fraud alone is the tip of the iceberg. And that figure is serious enough for the public finances - and for public morals.