When the political obituaries of Gordon Brown are written, the Kafkaesque system of tax credits that he introduced as chancellor will merit a chapter in itself. Today we report that HM Revenue & Customs (HMRC) is preparing to write off £2.8 billion mistakenly overpaid in tax credits to more than 1.5m people. Worse, evidence obtained by some of those from whom HMRC is demanding repayment reveals a chaotic, error-strewn service, capable of enormous mistakes even when repeatedly provided with accurate information by claimants.

A system supposed to help those on low incomes has turned into a nightmare. A department that specialises in retrospective taxation and harassing the law-abiding cannot keep its own affairs in order. Last year HMRC lost two discs containing bank details and National Insurance numbers of every family in Britain claiming child benefit – 25m individuals. Paul Gray, its chairman, resigned but with a big pay-off and a pension pot of more than £2m.

These problems are not confined solely to HMRC. This government has done little to reform an inefficient public sector and in many cases has made it worse. That matters at any time but particularly now, when private firms are being squeezed and long-term prosperity requires that young talent is attracted to the wealth-creating sector. Any government must ensure that taxpayers’ money is put to good use. This time it failed spectacularly.