Treasury covering up massive tax credit fraud - Laws

10.30.00am UTC (GMT +0000) Mon 19th Jun 2006

David Laws MP, Liberal Democrat Shadow Work and Pensions Secretary, today accused Treasury Ministers of a cover-up over the scale and causes of fraud in the tax credit system. The Liberal Democrats are pressing Treasury Ministers to publish a new report on tax credit fraud and error, which is believed to be complete, and which was due out this Spring.

The report is expected to significantly increase the estimate of the annual cost of tax credit fraud from the initial figure of £460m.

Commenting, Mr Laws said "The Treasury has failed to get a grip on tax credit fraud, and now they seem to be hiding a new report revealing the cost of such fraud, which was ready months ago. We understand that the Treasury has completed its estimates of fraud, but seems to be delaying this latest embarrassment for the Chancellor."

Mr. Laws further said "The Treasury has been so concerned to increase the take-up of the Chancellor's pet scheme that the proper checks on fraud have been neglected at great cost to the taxpayer. Basic anti-fraud provisions have been deliberately and persistently ignored, leading to problems such as the fiasco of paying credits to illegal immigrants. The Minister responsible for the tax credits mess, the Paymaster General, should be sacked. If the Chancellor fails to deal with the known faults of this system, tax credits will end up being permanently discredited."