Iain Duncan Smith claims more than £10 billion of public money has been lost in fraud and error under the tax credit system put in place by Labour.
In a scathing attack on the welfare model of the last government in today's Daily Telegraph the work and pensions secretary said tax credits were "not fit for purpose", and that the system was "wide open to abuse" and "haemorrhaging money."
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Shadow chancellor John McDonnell has backed a free vote for MPs on the issue.
Savers into the new scheme can expect rates as high as 4 per cent from some banks.
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