The National Audit Office has reported on the dog's breakfast that is tax credits. For 2007-8, HMRC estimated fraud and error overpayments as between £1.58bn and £1.84bn (7.9% to 9.2% of the final award by value). After all these years, that is a clear sign of a system which is expensively unworkable. You can see some recent convictions for tax credit fraud here.

Since 2006-07, we are told, increases in error and fraud have been primarily in the categories of ineligible children, overstated work and hours and ineligible disability claims. The Institute for Fiscal Studies has estimated that there are 200,000 more people claiming tax credits as lone parents than actually exist in the UK.

HMRC estimates that fraud accounted for £150m (8.8%) of total error and fraud in 2007-08. This is higher than the estimated £40m (2.8%) of fraud identified in 2006-07, "but is partly explained by a change in approach to the classification of fraud cases in its Error and Fraud Analysis Programme".

In other words, they haven't got a firm handle on it. So we're talking £150m+. If HMRC asks a taxpayer questions, they may say that an attempt at a fraud was just a mistake.

HMRC are belatedly making more use of other data to corroborate information provided by claimants, for example by matching tax credits data against child benefit records to identify young people who are no longer in full-time non-advanced education but still included in a tax credits award.

These estimates do not include figures for organised fraud. We are told blandly that in 2008-09 losses from organised fraud were £31.9m. Presumably that's identified losses. How much more did organised crime get away with? A total of £50m seems a modest guess.

And do we believe that individuals' fraud was only three times that figure? Tax credits were paid to 5.9m families in 2008-9, at an administrative cost of £584m.

HMRC's numbers put tax credit fraud at £181.9m. £250m was looking like a very conservative estimate.

And in late 2011 HMRC signed a 12 month contract with Experian which was expected to prevent tax credit fraud of £700m!

We weren't told whether they would concentrate on new applications, or whether Experian would be digging right through tax credit claims which had already been processed. But the level of tax credit fraud must surely be at least £1bn. It's probably more.