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Too much credit

Labour has overpaid poor families by £2 billion, but this is no cause for celebration

By David Harker   August 2005

Those parts of the welfare state used by everyone at some point in their lives, like health and education, feature constantly in the media. Welfare benefits, unless the story is of scroungers and fraud, are minority issues, difficult to understand or explain. This applies even more to tax credits, in spite of the large amount paid out—£13.6bn to over 6m people in low-paid jobs last year. The term “tax credit” still puzzles many people.

But the extraordinary overpayment of £1.9bn in tax credits to some of the poorest people in the country did cause a brief media storm at the…

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