Treasury apology over tax credits

Dawn Primarolo, the Paymaster General, was forced to admit to the House of Commons that more than 800,000 people who had applied for the new child and working tax credits had yet to receive any of their money while a further 450,000 eligible for the scheme had not yet taken it up.

The ground-breaking scheme, announced by Gordon Brown, the Chancellor, last year and which came into operation this month, was designed to simplify the benefits system.

More than four million people have applied to the Inland Revenue for the child tax credit - available to eligible families on incomes below 58,000 - but thousands had either not received their payment or had not had their applications verified.

Ms Primarolo apologised for the errors after MPs from all sides of the House gave examples of how their constituents had been let down by the new system and had struggled to contact the helpline set up by the Inland Revenue.

One MP cited a constituent who tried 2,400 times to call the helpline only to be put on hold for 15 minutes when he finally got through.

In an embarrassing admission, Ms Primarolo announced an additional helpline, especially for the use of MPs, was being set up to help deal with constituency complaints.

"I apologise for the difficulties experienced by individual families and I can assure the House that the Revenue is doing all it can to put things right," said Ms Primarolo.

But she insisted millions had successfully applied for the new credits and received payments.

Michael Howard, the shadow chancellor, said the "point of blame" for the catalogue of errors resided solely with Mr Brown.

"Isn’t it the case that this shambles is entirely the responsibility of the Chancellor?" said Mr Howard.

And the Labour MP Harry Barnes (Derbyshire North East) said "a good scheme was in danger of getting a bad name".