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Tax credits - Ombudsman`s Report backs MP`s Claims  (October 9th 2007)

Claims made by North Thanet`s MP, Roger Gale, that Gordon Brown`s Tax credit system is operating unfairly and causing hardship to families have received dramatic support from the Ombudsman, Ann  Abraham.

In her report, published today (Tuesday) the Onmbudsman acknowledges that the system is too complex and that it has not taken account of information supplied by claimants leading, as a result, to overpayments.  She also highlights the weakness in the Revenue and Customs "Code of Practice 26" which says that even though official errors may have been made claimants should have been aware of those errors and therefore are responsible.

"In the course of this year I have held private meetings with the Adjudicator, Dame Barbara Mills, with the new Chairman of Revenue and Customs, Paul Gray and with Ann Abraham, the Ombudsman, herself.  I am delighted that the Ombudsman, whose position was becoming difficult to say the least, has so clearly underscored the weaknesses in the system.

I have, at present, about forty cases of hardship caused as a result of COP 26 and the Revenue`s insistence that "we were wrong but you should have known that we were wrong so we are right and you are wrong and we want our money back!".

The Chairman of Revenue and Customs has told me that the operation of COP 26 is under review and of course I hope that this will lead to changes.  However, Government must now respond to the Ombudsman`s report.  I am due to see the new Minister responsible, Jane Kennedy, shortly and I shall press the case for all current claims for repayment to be written off.

It`s simply not good enough for the Treasury to say that "this is taxpayer`s money" and that it must be reclaimed: the fact is that the money has already been spent, in most cases in good faith, by claimants who now are not in a position to repay it. That is the fault of Brown`s system - it was he who introduced it and claimed its "success" - and the Treasury must foot the bill, if necessary out of cuts in its own departmental budget.  Perhaps the Chairman who received a knighthood for presiding over this incompetence, Sir David Varney, would like to make a contribution to the refunds!"

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