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

    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

    “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.

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