TaxAdministrationLib Dems slam government over tax credit fraud

Lib Dems slam government over tax credit fraud

Party says full cost is likely to exceed £30m and urges chancellor to offer full explanation to parliament on Monday

The Liberal Democrats have slammed the government over the £30m fraud that
forced it shut down its online tax credit application service today, urging
ministers to make a statement on Monday – the day of Gordon Brown’s pre-Budget
report.

Shadow work and pensions secretary David Laws said the fraud would come as a
‘huge embarrassment’ to the chancellor given just that it has happened just days
before his PBR.

‘On Monday, he will want to say what a success his flagship policy is, but
this news is further proof that the system is in chaos. Ministers have led
parliament to believe that the level of fraud is somewhere in the region of just
£30m – I suspect the real figure is substantially higher.’

And Laws said ministers had to shoulder part of the blame as they were
responsible for the tax credit service. ‘This complicated and chaotic system is
wide open to fraud,’ he said. ‘Ministers have known for some time that organised
criminals were using the internet to defraud the system.

‘Ministers must now make a statement on Monday, firstly as to why they have
taken so long to deal with the problem and why such drastic action is necessary.

‘After all, many perfectly honest families will be applying via the internet
and will be forced to join the massive queue of people hoping to speak to an
adviser on the tax credit helpline.’

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