Gordon Brown's Tax credit system failures means misery for the poor says AM

9.20.01am BST (GMT +0100) Fri 18th May 2007

The Welsh Liberal Democrat Assembly Member for South Wales West Peter Black has hit out at Labour's tax credit system, accusing ministers of ignoring advice on how to improve it, and preferring to pursue people through the courts instead.

Mr Black was responding to the recent findings of the Public Accounts Committee concerning the tax credit system, which they say has cost the public almost £2bn - equivalent to 1p on income tax - through overpayments, errors and fraud. They estimate that £5.8bn was wrongly paid out in the first three years, £557m of which has been written off and £1.4bn of which is unlikely to be recovered.

"Our own research shows that Labour pursued 38,000 of the poorest families through the courts last year alone, while choosing not to implement changes to the tax credit system put forward by the parliamentary ombudsman in June 2005," said Mr Black. "Like other AMs, my own postbag contains far too many examples of overpayments made through no fault of the families concerned which the Government then pursue with scant concern for the financial plight into which people may be forced."

"This report is a terrible indictment of a tax credit system set up with the best of intentions but which is now burdened with the very worst administration. Levels of fraud and error in tax credit payments remain unacceptably high, creating huge waste and often placing families in real distress and financial hardship. Before the Chancellor moves to Number 10, he must first face up to the very real problems that are bogging down his tax credit system."