Tax credits were a disgrace, MPs tell Revenue

Former social security minister Frank Field made the comment at the Common's Public Accounts Committee, where Sir Nicholas was explaining why hundreds of thousands of people had gone without the payments. Field said people had been left sick with worry by the fiasco.

Sir Nicholas conceded trust in the Inland Revenue has been 'severely dented'. 'I very much regret the fact a lot of people who should have been paid on time were not,' he said.

But he pointed the finger of blame at new computer software provided by Electronic Data Systems.

'I expected EDS to provide a system that was stable and fit for the purpose,' he said.

Edward Leigh, the chairman of the PAC, was also critical of EDS. He pointed out it had made a 'fat profit' after 'unleashing' an unready system on society's most vulnerable.