Harold Pinter would be proud to dream up a stage play capturing the unfolding saga surrounding one of Gordon Brown’s pet projects– tax credits. But while the underlying justification is commendable (it is sensible to encourage people to take on paid employment), the implementation of the scheme has been riven with mind-numbing complexity and delivering bizarre outcomes. Most bizarre of all, the Prime Minister now faces the possibility he will have to reimburse a quarter of a million people who repaid tax rebates that should not have been paid.

The narrow financial lesson to be learnt from this fiasco is that simplicity should always be honoured as the mother of invention – especially when it comes to tax. Only in theory can it be cogently argued that tax credits are a sound concept, helping the less well off into work at the same time as alleviating poverty. Unpleasant realities have ruined the attractions of the regime and this, moreover, is an observation that could be made, and was made by some, without the benefit of hindsight. Tax credits are inherently problematic because those citizens in greatest need of help are likely to be the ones least capable of claiming what could rightfully be theirs. They might be too proud, too lazy, too distrustful of the State, or insufficiently educated. In any case, most people think of tax as a financial penalty and find it difficult to comprehend how the tax system can mutate into something that gives cash away. No less an intelligence that Albert Einstein said that income tax was the “hardest thing in the world to understand,” although if he’d heard about tax credits he might have concluded there was such a thing. Then there is the administrative burden of ensuring the right payments go to the right people at the right time.

Maladministration has dogged the project at almost every turn. About £6 billion worth of tax credits has been paid in error since 2003 and these numbers may be higher – it is an administrative nightmare even to reckon precise numbers. Now the Government must find an estimated £500 million to repay those 250,000 people who, thanks to an apparent misreading of its own rules, it may have chased inadvertently. The Government, because of administrative difficulties, such as locating people, reclaimed only a fraction of the paid-in-error tax credits.

If Mr Brown wants to encourage the needy to work their way out of poverty, he should wind down the unwieldy tax credit regime and replace it with a system built on lower taxes. If he wants to direct specific help at poorer families, he should raise the income threshold at which people begin to pay tax. In the name of simplicity, he should also dismantle national insurance and create a single, comprehensive and comprehensible tax-collecting apparatus.

The increasingly sorry story of tax credits gives telling clues about Mr Brown’s manner of governing and could hurt him politically. But Governments of all types tend to overelaborate. The Child Support Agency, despite the decent intention of its designers to oblige fathers to pay for their children’s upbringing, was hobbled by administrative complexity. Might carbon trading become another regrettable example? A mantra extolling the virtues of simplicity for the sake of effectiveness is one that would bring help across the board. Health and education services would benefit from a commitment to avoid unnecessary complexity. It is a simple truth that voters dislike unneccessary complexity.