In a hard-hitting report, she says that, without reforms to the system, "a sizeable group of families will continue to suffer not only considerable inconvenience, but also significant worry and distress".

She urges ministers to reconsider the way the Government pays tax credits, which are claimed by around six million families.

She also accuses the Treasury of misleading MPs about the extent of the problems and calls for claimants to be allowed to keep overpayments received as a result of error. The ombudsman's findings, which are echoed in a separate report today from the charity Citizens Advice, are an embarrassment to the Chancellor, who considers tax credits to be one of his major achievements.

The full article is in the Telegraph.

Polly Toynbee, in the Guardian, rode to the defence of tax credits although in the process she was good enough to lay bare more about how disastrous they have been:

If the sums involved are eye-wateringly huge - £2bn overpaid - that is because more families are getting these payments and the money they receive is far more generous than ever before. Even so, it takes the breath away to find that out of the 6 million families getting tax credits, almost 2 million have been overpaid by an average of £1,000 each.

For Ms Toynbee, it is a regrettable side issue that two million overpayments have been made. For her, the point is how generous Mr Brown has been and how clever he is politically to help the poor, despite the fact that - so she claims - the electorate does not like this.

She claims, incidentally, that there is no higher incidence of computer systems going wrong in the private sector than in the public sector. I wonder what evidence she has for that, assuming she has some? But in any case, should not prudent government policy allow for the fact that public sector computer systems, at least, tend to go wrong (and way over budget)? Would it not be sensible to make policies, where possible, that do not heavily depend on them?

But the major failing of her piece is the failure to consider much simpler (and thus less accident-prone) approaches such as introducing a high threshold for tax free income. Tax credits are generally repayments of tax paid. It is far simpler not to take the tax in the first place.

A second failing in her piece is to ignore the fact that many of the poorest and least able do not claim their tax credits. It is just too difficult. So they are not helped at all.

Today, Polly Toynbee has been reminded that her great admiration for tax credits is not shared by, er,

The Guardian

The Guardian was the first newspaper to reveal the tax credit system was in trouble and Jobs & Money has campaigned tirelessly for two years for the Inland Revenue officials to take a more lenient stance on repayments.

Last year, under the headline "Don't make it easy for the taxman" we told how Citizens Advice was advising claimants to check their records before agreeing to make overpayments. Given the official reports detailing how Inland Revenue systems make thousands of errors a month, it turned out be sound advice.

In the spring we offered further tips on how to appeal if the Revenue had begun to claw back overpayments ("Tax credit victims in fightback") and reported on calls by MPs for ministers to tackle the "tax credit shambles".

It would be a further two months before Dawn Primarolo, the minister in charge would concede to conducting a limited review. Calls for her resignation this week were rebuffed by the government.

The government has resisted calls for an overhaul of the tax credits system ever since it was launched in 2003 amid chaos and confusion.

Ms Primarolo ordered a limited review last month, but this week's critical reports have failed to persuade her the system is flawed.

She has also ignored calls by charities representing low income families, MPs and civil service unions, which have campaigned for a moratorium on demands for tax credits to be repaid until basic defects in the system are investigated.

"Chaos", "confusion", "shambles"? Not a problem for Polly.