Take-up of child tax credit (CTC) and working tax credit (WTC) has been a success with the vast majority of claimants receiving the right amount of payments at the right time.
Tax credits have helped to lift 700,000 children out of relative poverty since 1996-97—compared to a doubling of child poverty in the previous 20 years.
Tax credits have also helped increase the number of people in work by over 2.5 million since spring 1997, and since 1997 long-term unemployment has reduced by 450,000.
Furthermore, tax credits have also been central to reducing the tax burden on low to middle income families. The latest OECD study shows the tax burden on a single-earner couple with two children earning £21,000 has fallen from 17.3 per cent. of gross earnings in 1997 to 9.8 per cent. in 2004.