Taxing problem

At the heart of the Government's ambitions to reform the welfare state has been the desire to reduce poverty by getting many more people into work.

And one of Gordon Brown's biggest and most expensive has been tax credits which are designed to make it more worthwhile for people, especially poorly paid people, to get jobs.

The credits have certainly put more money into many people's pockets. The trouble is that it has often been the wrong people's pockets.

Organised crime has targetted tax credits - last week it was revealed that one group of fraudsters has made off with at least £15 million - some think the real figure is more like £100 million- by making multiple applications for tax credits.

An even costlier problem is a systemic one - the difficulty the bureaucracy has when people's circumstances change.

In the first year of operation of tax credits, more than two billion pounds was overpaid to two million people - a loss to the taxpayer of some of the money while trying to claw it back has meant financial hardship to many of very people the policy was meant to help.

MPs on the Commons Treasury Committee are now so concerned that they have launched an investigation.

Our reporter Rachel Wright has been making her own inquiries, which she begins in the West Midlands. There she finds one woman who has decided that tax credits have made it too expensive for her to be in work - precisely the opposite of what the Chancellor intended.

We should point out that the minister responsible for tax credits, Dawn Primarolo, had agreed to come on the programme to respond to the criticisms of tax credits heard in the report. But on Thursday we were told she had become unavailable.