Tories seek inquiry into tax credit 'shambles'

Gordon Brown faced demands yesterday for an urgent inquiry into the "shambles" surrounding the Government's new tax credits amid claims that hundreds of thousands of families are waiting to receive payments.

Michael Howard, the shadow Chancellor, called for a statement on the "chaos" in the new £11.7bn system of tax credits for families and the low paid. The child tax credit and working tax credit came into force this month, with households whose income does not exceed £58,000 a year able to claim. But many people have complained of delays in receiving payments under the new system, of complex and lengthy claim forms, and of constantly engaged Inland Revenue helplines. More than one in ten eligible households has not bothered to apply.

Yesterday the Treasury admitted a "couple of hundred" families had to be given emergency payments because of delays in processing their details, and said 300,000 people who applied before 31 January had been asked for more facts to allow claims to be processed.

Seven hundred extra staff had been drafted in to bolster the 2,000 already manning the helpline and one million payments had been made.

The Inland Revenue has received 3.9 million applications. So far, 2.4 million of the 2.7 million claims made by 31 January, the cut-off date to guarantee the first payment would be made on time, have been processed.

Ruth Kelly, the Financial Secretary to the Treasury, defended the Government's handling of the payments. She said: "Most people have been able to receive their new tax credits without any significant input, on time. Two thirds of people have got until the end of the month until any payment is due so what I would say to people is, 'Don't worry ... help is there for you and the Inland Revenue is working its hardest to get on top of this problem and will make the payments as soon as they are able to'."