Unemployed people claim Jobseeker's Allowance, which is administered jointly by the Employment Service and the Benefits Agency. The summary of Lord Grabiner's recommendations and some examples of the hidden economy are attached. Every year billions of pounds are lost to the informal economy, or hidden economy. Others defraud the social security system by claiming benefit for being unemployed when they are in work. Many employers are committing or colluding in a range of different offences at the same time.
Honest taxpayers have to pick up the bill.
Some of those in the informal economy would like to come clean. But they may not know what opportunities exist in the regular economy or how to take advantage of them. It is important to take steps to encourage these people and their businesses to become legitimate. In order to detect people in the informal economy, Departments must co-ordinate and improve their investigations. They also need to be able to share the information they hold and use information from other sources to check for suspicious signs of fraud.