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HMRC Chief Steps Down Over Taxpayer Data Loss

by Jason Gorringe,, London

22 November 2007

UK Chancellor Alistair Darling has made unreserved apologies after discovering earlier this week that the personal details of over 25 million individuals in the UK have been lost in a colossal blunder by HM Revenue & Customs.

Mr. Darling said that the error occurred after a junior official placed two discs full of information into a general post by accident. The package was not sent by recorded delivery, and has failed to be traced since leaving the office.

The discs contained names, addresses, dates of birth, child benefit numbers, National Insurance numbers and bank or building society account details of some 25 million individuals and 7.25 million families.

Mr. Darling spoke out earlier this week, attempting to reassure those whose information has gone missing that the discs in question are protected by secure passwords.

He stated that:

"Our priority was and is to find this data. Searches have been and continue to be carried out, including of HMRC and NAO premises. Staff are being interviewed. But so far the missing data has not been found," adding that:

"The police tell me that they have no reason to believe that this data has found its way into the wrong hands. The police are not aware of any evidence that it has been used for fraudulent purposes or criminal activity."

The Chancellor continued: "I regard this as an extremely serious failure by HMRC in their responsibility to the public."

Mr. Darling concluded:

" There is no evidence this data has reached the wrong hands There is no evidence of fraud or criminal activity Banks and building societies are putting in place safeguards to protect people's accounts Banks and building societies will continue to monitor their accounts. No-one will suffer any loss if they are an innocent victim of fraud. And I will, of course, keep the House updated of any further developments."

Allen Blewitt, Chief Executive of ACCA (the Association of Chartered Certified Accountants) offered the following views in response to the Chancellor's announcement, observing that:

"ACCA is alarmed at this week's announcement by the Chancellor, and especially that errors within HM Revenue & Customs have come to a head in such a way. We always knew there were issues with the department, and in the early stages of the merger from Inland Revenue and Customs & Excise into HMRC, teething problems could be expected.But after this weeks' announcement, it is apparent that the problems are more deep rooted and endemic."

In the light of the seriousness of the blunder, Paul Gray, the Chairman of HM Revenue and Customs, has informed the Secretary to the Cabinet and Head of the Home Civil Service, Sir Gus O'Donnell, of his intention to step down from his post.

Mr. Gray explained that:

"Ensuring that our customers and stakeholders can trust how we handle sensitive information is one of our most important responsibilities. Given my overall accountability for the way the Department operates I have concluded that, as a result of the recent failings, it is right for me to decide to stand down."

This comes at an especially difficult time for the Chancellor, who is still working to recover the trust of the electorate after the Northern Rock crisis earlier this year.

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