Tax Credits Complexity Must be Rooted Out

May 9, 2007 2:30 PM

Commenting today on the Public Accounts Committee's report into Tax Credits, Jenny Willott MP and member of the Work and Pensions Select Committee, said:

"From the first day that Gordon Brown's brought his cherished tax credits policy into this world, it has been characterised by immense complexity leading inaccurate payments and the largest fraud & error problems in the entire Government.

"Billions of pounds of taxpayers' money have been wasted in overpaid tax credits. And in clawing back this money from unsuspecting low income households, way after they would have spent it, tax credits have left thousands of vulnerable Welsh families in a worse financial state than they were in the first place.

"What's more, the 'pay now, check later' attitude that the Treasury uses to administer tax credits has been a magnet for organised criminals who have defrauded many hundreds of millions of pounds of pubic money.

"Tax credits are a classic example of a new Labour policy that, while noble in principle, has gone horribly wrong because it is over centralised, over bureaucratic and overly complex."

Commenting on the ongoing Work and Pensions Select Committee inquiry into 'Simplifying the Benefits System', Jenny said:

"Up until now, Gordon Brown has chosen to tinker with tax credits system from afar while leaving his junior ministers to take the rap for it.

"If the Chancellor is serious about getting benefits only to those that really need it, he must simplify the system and tighten up on fraud & error.

"I hope Gordon Brown will take note of the recommendations the Committee will bring forward later this year."

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