MPs were told that millions of claims were held up and 375,000 emergency payments had to be made when the April 2003 roll-out of new systems hit trouble.
Facing the committee's MPs were Inland Revenue's chairman Sir Nick Montagu, senior officials from his department and Bill Thomas, a president of EDS, the Inland Revenue's main IT supplier of systems to support tax credits. Montagu blamed the delays on EDS. "One thing went wrong," he said, "that was the failure of the systems".
Under interrogation by MP Richard Bacon, Montagu was asked whether he had read "Crash - 10 ways to avoid a computer disaster". "No, I have not," he replied. "Maybe it would be a good use of my coming retirement."
Bacon quoted from the book, which emphasised the importance of being an "intelligent customer". He accused Montagu of not understanding what EDS was capable of delivering. Montagu replied, "We understand well what EDS was and was not capable of delivering."
None of the Inland Revenue's witnesses at the hearing was an IT expert. Montagu said that even if the Inland Revenue had been a more "intelligent customer", the nature of the fault meant it would not have been identified in advance. Thomas accepted some of the blame for the problems, but said that the time for testing had been curtailed.