Vince Cable quizzes Chancellor over lost records

5.39.00pm GMT Wed 21st Nov 2007

[Nov 20] Alistair Darling (Chancellor of the Exchequer, HM Treasury): With permission, Mr. Speaker, I should like to make a statement on the breach of procedures which led to personal data relating to child benefit from Her Majesty's Revenue and Customs going missing . .

Vincent Cable (Twickenham, Liberal Democrat): I think I should thank the Chancellor for both his frankness and his apology, but is it not now the case that the Treasury has replaced the Home Office as the Department that is unfit for purpose, and also that he inherited from his predecessor systems of management that are totally dysfunctional? On the specifics, how many unencrypted CDs are being posted around Government every year? Since this is the second case within the past few weeks of a CD being lost in the post-the other in relation to insurance data-what is the status of the comment made in respect of the loss of a CD in September by HMRC that it had "reviewed our arrangements and introduced safeguards to prevent this happening in future"? Why should we have more confidence today that that will be implemented? Can the Chancellor also explain why, in this day and age, information is being transmitted through CDs, rather than electronically? Is that not just a reflection on the ancient IT systems employed by HMRC? [Interruption.] For example, is he aware that officials within HMRC- [Interruption.]

Michael Martin (Speaker): Order. Let the- [Interruption.] Order. Let the hon. Gentleman speak.

Vincent Cable: Is the Chancellor aware that officials within HMRC are being told to disregard elementary precautions such as dual running of old and new IT systems in order to make savings on the £8 billion Capgemini project? Will he not make an open, transparent statement of the IT position by publishing the gateway review rather than trying to suppress its findings by going to the High Court?

A basic question one has to ask is why private finance initiative contractors are being given greater data protection than 7.5 million families concerned with child benefit. Is not at least part of this problem due to the 25,000 job losses being implemented in HMRC? Clearly, if officials are being asked to do more and more with fewer staff, mistakes will be made, as they have been here and in relation to tax credits and VAT registration. Is the issue of confidence in Government databases restricted merely to the future ID card system? Is there not a complete lack of confidence in future benefit claims? How on earth are poor people going to have confidence that their data will be protected when they claim benefits?

Finally, I want to raise the issue of the principles governing resignation from Government when administrative disasters occur. One senior official, Paul Gray, has now resigned as a matter of honour; another, the Metropolitan Police Commissioner, declined to do so. Home Office Ministers have resigned on matters of honour; Treasury Ministers decline to do so. Where does the buck stop in this Government?

Alistair Darling (Chancellor of the Exchequer, HM Treasury): The hon. Gentleman asks a number of questions and I agree with him that this information should not have been downloaded in the way that it was; it certainly should not have been sent in the way that it was, without any readily available means of identifying where it was. It was password-protected, but that was inadequate. However, the hon. Gentleman needs to bear it in mind that the key problem here is that HMRC has clear instructions, rules and procedures in relation to requesting, downloading and transmitting information, and that the individuals concerned ignored those instructions. That is the difficulty, and that is what we need to make sure does not happen again.

HMRC is operationally responsible for the collection and making of payments. It is, quite properly, independent of Government, because it is involved in dealing with personal data. That is why it is a responsibility, which this House recently agreed to, of a board of commissioners and the chairman. They are accountable to Parliament through me, which is why I am making this statement today, but there is no doubt in my mind that what we have here is an extremely serious breach. It should never have happened, and the problem is that individuals within HMRC ignored the procedures that were there. That should not have happened and that is what we need to put right.

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