MHAIRI Black has called on the government to bring in a law banning private companies from stopping tax credit payments.

The Paisley and Renfrewshire South MP’s demand comes in the wake of the Concentrix shambles, where the US contractor incompetently stripped tax credits from tens of thousands of people on low incomes.

Treasury bosses had employed Concentrix to investigate fraud and to try and reduce error in the system, and had given the firm power to stop tax credit payments. In total some 45,000 payments were stopped.

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Ministers were sheepishly forced to admitted that 87 per cent of the 36,000 people who had appealed against the Concentrix decision had the decision overturned.

It was during an investigation by the Work and Pensions select committee, on which Black sits, that the full ineptitude of the outsourcing was laid bare.

One single mother who lived in a housing association operated by the Joseph Rowntree Foundation was accused of being in a relationship with Joseph Rowntree. She had to rely on foodbanks while going through the appeals process to prove she was not in a relationship with the Quaker philanthropist who died in 1925.

So bad was the customer service at Concentrix that claimants who found they were to have their payments stopped could not get through by phone to contest the decision. Only 10 per cent of calls to the company were being answered in five minutes.

In often emotional evidence sessions in front of the committee, some of those who had been affected told of how they been forced to take payday loans, and others told of how the company had left them feeling suicidal.

While Concentrix was sacked by the HMRC last year, there were fears history might be about to repeat itself after the government put out a notice looking for a private company to search for “undeclared partners” of those claiming Income Support.

Work and Pensions Secretary Damian Green said this would be different from Concentrix as the new external agency would not “have any contact with claimants directly or any decision-making authority”.

He added: “All cases will be progressed through the existing DWP fraud and compliance processes.

“We expect to award a contract for around 18 months and will evaluate its effectiveness in order to inform decisions about whether this type of data matching provides a useful indication of undeclared partners for future use in the Universal Credit system.”

Black said the government needed to take responsibility for the behaviour of the private firms.

“The practices used by Concentrix are certainly questionable but the real blame lies with this Tory government, who came up with a model which indiscriminately targeted low income families – a way of working which placed the burden of their failing austerity agenda firmly on the shoulders of those most disadvantaged in our society,” the MP said.

“Ultimately, the blame lies with the Tories and they must show that they have learned their lesson by legislating to ensure that this kind of scandal is never repeated.

“The Treasury needs to urgently reconsider the ongoing policy of downsizing HMRC as it is clear that these offices and resources are needed to properly notify claimants, provide support for queries and ensure that vulnerable individuals are not stripped of support.

“The evidence heard by the Work and Pensions Committee laid bare the real hardship families endured as a result of this utter shambles and the UK Government must apologise fully for the agony it has caused.”