In an article for The Telegraph today, Iain Duncan Smith says that “Labour’s legacy on tax credits tells a sorry story of dependency, wasted taxpayers’ money and fraud.”, and that “Even for those in genuine need of support, tax credits were not fit for purpose”. Now, for sure I am one who is almost always cynical of claims made by politicians – especially by conservative politicians – but does he have a point? After all, there is no doubt that the benefits system is outdated and inefficient.
On some of the specifics, he may have a case; It is true that the level at which your income must increase before your claim for tax credits is reassessed was raised from £2,500 to £25,000 in 2008 by Labour, and it is also most likely true that this raise was put in place as a means of attracting votes for the election – not that the conservatives would ever cynically invent policies for that end (and assuming that the public actually pays attention to policy). This increase most definitely would have increased the bill, for obvious reasons, and does appear to legalise what seems like bona fide fraud. So score one for IDS.