Press coverage of 'The labour market impact of the Working Families' Tax Credit'

On Monday April 3, The Daily Telegraph ran an article by Anne Segall, Economics Correspondent, which began with the sentence:

'The Working Families Tax Credit, which will cost taxpayers £5 billion in the year ahead, could prove among the costliest failures in social engineering ever attempted by a British government, a damning new report says.'

The headline was 'Family Tax Credit will be £5bn a year failure says report'.

The article in Fiscal Studies, to which The Daily Telegraph refers, makes no reference to social engineering, or to failure, or to costly failure. What the article attempts is an objective assessment of the effect of the WFTC on the distribution of income and on labour market behaviour. Normative judgements, which were not made by the authors, should not be attributed to them.

A similar problem is seen in an article in The Daily Mail of April 4, which includes the sentence 'A devastating report from the independent Institute for Fiscal Studies concluded that the grandiose scheme Šwould be a massive flop.' Neither 'massive flop', nor 'flop', nor any similar statement appears anywhere in the report referred to.

Ends

Notes to editors

1. The original press release on this article can be found here
   Summaries of previous work on the WFTC can be found in The employment effects of the WFTC (Briefing note No. 6) and Family Credit and the WFTC (Briefing note No. 3).
2. The article "The Labour Market Impact of the Working Families' Tax Credit" by Richard Blundell, Alan Duncan, Julian McCrae and Costas Meghir is published in Fiscal Studies, vol. 21, No. 1. This is available from the Institute for Fiscal Studies, 7 Ridgmount Street, London, WC1E 7AE, 020 7291 4800, @email
Current Fiscal Studies articles are now available online to institutional subscribers from Wiley.