Chancellor under fresh fire over HMRC data loss

Chancellor Alistair Darling has come under renewed fire from MPs who came close to accusing him of lying to the Commons about HM Revenue and Customs’ loss of 25 million people’s details held on two CDs.

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Chancellor Alistair Darling has come under renewed fire from MPs who came close to accusing him of lying to the Commons about HM Revenue and Customs’ loss of 25 million people’s details held on two CDs.

Shadow chancellor George Osborne accused his opposite number in terms that came as close as parliamentary etiquette allows to saying that he lied about details of Britain’s biggest ever data security breach.

In his statement to the Commons on 20 November, Darling blamed the data breach on a “junior official” at HMRC, and said that although he had been informed of the incident on 10 November he had delayed his statement for 10 days at the request of the banks.

But Osborne challenged: “We now know that what the chancellor told the House was not close to an accurate statement of what actually happened. We now know that it was not left to someone at a junior level in the organisation to make that decision.”

The Conservative MP pointed to emails released by the National Audit Office – the intended recipient of the CDs – that reveal more senior officials at HMRC were aware that unfiltered data on millions of child benefit claimants was to be sent to the audit body.

“The child benefit process manager, the senior official in charge of the entire child benefit system, as I understand it, was copied into those emails and was aware of the discussion about whether to send the information,” Osborne said.

Darling replied that there was “no inconsistency between what I said in my statement last week and the information publicly available”.

The correspondence between HMRC and the NAO showed both public bodies had agreed they had “no evidence that the process owner for child benefit made the decision to release the data”, Darling argued. “In other words, that evidence is not available to us.”

Osborne also challenged Darling’s November 20 assurance that “the banks were adamant that they wanted as much time as possible to prepare” and wanted a delay before his Commons statement.

But the banks had denied calling for a delay, Osborne pointed out, quoting a statement from the British Bankers Association that said: “At no point did the banks request a period of weeks, as the chancellor stated.”

Osborne asked: “Who is telling the truth? Is it the banking system or the chancellor? Is it the emails from the NAO or the chancellor? I guess that the public will decide.”

Darling replied that he had told the banks about the breach through UK payments association Apacs on Friday 16 November. “On the Monday morning [19 November], when I was reaching a decision about when I would report to the House, I asked what the banks’ view was. A number of banks said that they wanted more time,” he said.

Asked which banks had said this, the chancellor responded: “I am not prepared to say that without those banks’ consent, but their request was based on perfectly good operational requirements.”

Osborne also told MPs that HMRC had made errors in sending apology letters to benefit claimants in the wake of the data fiasco, with some individuals receiving the confidential details of other claimants.

“The Treasury appears to have compounded its mistake by sending to some members of the public letters that include the personal details and national insurance numbers of other people,” he said.

An HMRC spokesperson said the department was investigating the issue “on a case by case basis”.

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