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Brown denies tax raid on low paid Brown denies tax raid on low paid
(about 2 hours later)
Chancellor Gordon Brown has hit back angrily at claims he hit the poor in what was expected to be his final Budget earlier this month.Chancellor Gordon Brown has hit back angrily at claims he hit the poor in what was expected to be his final Budget earlier this month.
He insisted the low paid can claim any lost income back through tax credits.He insisted the low paid can claim any lost income back through tax credits.
And he rubbished suggestions by a Treasury official that the government relies on 75% of people not bothering to claim what they are owed.And he rubbished suggestions by a Treasury official that the government relies on 75% of people not bothering to claim what they are owed.
According to the most recent figures, from 2004, only 25% of those entitled to tax credits actually claimed them.According to the most recent figures, from 2004, only 25% of those entitled to tax credits actually claimed them.
Tory MP Michael Fallon, of the Treasury select committee, accused Mr Brown of "relying on people being put off by the complexity of the system to meet your own fiscal projections".Tory MP Michael Fallon, of the Treasury select committee, accused Mr Brown of "relying on people being put off by the complexity of the system to meet your own fiscal projections".
But Mr Brown said the figures, quoted by the Treasury official in evidence to the committee on Wednesday, were just "projections" of future public spending estimates.But Mr Brown said the figures, quoted by the Treasury official in evidence to the committee on Wednesday, were just "projections" of future public spending estimates.
'Ridiculous''Ridiculous'
He told the committee: "We are obliged to pay the working tax credit to those who take it up. We cannot refuse to pay the working tax credit if people claim it.He told the committee: "We are obliged to pay the working tax credit to those who take it up. We cannot refuse to pay the working tax credit if people claim it.
"And if people claim it as we want them to do then we will pay the money."And if people claim it as we want them to do then we will pay the money.
"The idea that we would close the working tax credit when there is a certain take-up and say it's not available to anyone beyond that level is ridiculous."The idea that we would close the working tax credit when there is a certain take-up and say it's not available to anyone beyond that level is ridiculous.
"We are not only making it available to people but publicising its availability.""We are not only making it available to people but publicising its availability."
He said take-up of tax credits had gone up since the last figures were published and there pilot schemes underway round the country to increase it further.He said take-up of tax credits had gone up since the last figures were published and there pilot schemes underway round the country to increase it further.
'Write-off''Write-off'
Mr Brown also came under attack from committee member, Tory MP Brooks Newmark, for underpayment of tax credits.Mr Brown also came under attack from committee member, Tory MP Brooks Newmark, for underpayment of tax credits.
He denied that there were plans to write off £1.37bn of overpayment of tax credits. He also denied there were plans to write off £1.37bn of overpayment of tax credits.
Mr Brown said the figure, which is a third of the debt owed to the treasury from overpayment, has not been "written off".Mr Brown said the figure, which is a third of the debt owed to the treasury from overpayment, has not been "written off".
He said it was classed as "provision for doubtful debt", which the government aims to recoup.He said it was classed as "provision for doubtful debt", which the government aims to recoup.
Mr Brown cut income tax by 2p in his Budget but he also abolished the 10p starting rate, in what he hailed as an historic "simplification" of the system.Mr Brown cut income tax by 2p in his Budget but he also abolished the 10p starting rate, in what he hailed as an historic "simplification" of the system.
But the Conservatives say the changes will leave five million low paid workers worse off.But the Conservatives say the changes will leave five million low paid workers worse off.