Brown must fix tax credits shambles before leaving Treasury - Foster

3.58.28pm BST (GMT +0100) Mon 21st May 2007

The Liberal Democrats today called on Gordon Brown to fix the 'administrative shambles' of the tax credits system before leaving the Treasury.

The attack comes ahead of the release of Government figures on tax credits tomorrow, which are expected to show £6bn of overpayments - over £2bn of which may never be recovered.

Bath's MP, Don Foster, said:

"The tax credits system has turned out to be a well meaning administrative shambles. Almost £6bn has been overpaid in just three years - £2bn of which will never be recovered.

"There have been few government programmes of this scale which have led to more personal distress or more wasted taxpayers money.

"The overpayments shambles has driven many poor people further into debt and despair, but in spite of this the Government has failed to act on the recommendations made by the Parliamentary Ombudsman two years ago.

"The system is grossly unfair because overpayments are automatically recovered, even in cases where the Government itself has made the mistakes which led to excess money being paid out.

"Gordon Brown has failed to sort out these problems, and has instead resorted to ducking questions and trying to wish the problems away. This is one of the Chancellor's flagship schemes; he must be held personally accountable for sorting out the mess.

"If the Chancellor wants to show that under his leadership the Government will start to listen and learn, then he must do precisely this - and use the next few weeks to fundamentally reform the tax credits system."

Notes:

1) Liberal Democrat analysis shows that only four of 12 recommendations for reform of the tax credits system made by the Parliamentary Ombudsman two years ago have so far been implemented - in spite of Treasury Ministers claiming that the 'vast majority' have been.

2) See the link below for the Liberal Democrat briefing 'Brown's Legacy: The Tax Credit Fiasco', which includes a five point plan to fundamentally reform tax credits and introduce greater stability and fairness.

Related Link:

Brown's legacy - the Tax Credit fiasco