Lib Dems call for tax credits to be written off

The Liberal Democrat party yesterday called on the government to
write off tax credit overpayments caused by official errors,
writes Clare Jerrom.

In a speech to the annual party conference in Blackpool, shadow
work and pensions secretary David Laws called on Dawn Primarolo,
the paymaster general, to solve the problems in the system within
six months or resign.

“The implementation of this policy has been a shambles. It
has led to the tragedy of some of Britain’s poorest families
being driven further into poverty and debt,” said Laws.

“Many families have given up on a system which seems to
deliver precisely what people on low incomes least need –
instability and uncertainty,” he added.

Laws proposed a five point action plan:-

1) There should be a statutory right of independent appeal for
recovery of over payments.

2) Tax credit overpayments due to official error must not be
recovered unless people could reasonably have been expected to be
aware of the overpayments, and no recovery of overpayments due to
official error should take place without prior investigation as to
whether these conditions have been met.

3) Tax credit overpayments due to official error for 2003/4 and
2004/5 should be written off, as recommended by the
ombudsman.

4) Tax credit award notices and administration must be urgently
improved and simplified.

5) An assessment should be made urgently of the case for returning
to a system of fixed tax credit awards.

“The government must stop recovering money from people
before they have even given those people a chance to argue their
case,” Laws continued. “Many of the overpayments are
due to official error, not to fraud or to inaccurate
information.”

“The paymaster must sort these problems out over the next
six months. If she fails, then she must accept the personal
responsibility and public accountability which comes with high
office,” he concluded.

More from the conference throughout the week.