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'No fraud' from lost data discs Morale 'not to blame' for breach
(about 5 hours later)
There is no evidence criminals have been using the personal details of 25 million people contained on two missing data discs, the chancellor has said. Low morale at HM Revenue and Customs was not a factor in the loss of two discs containing 25m people's data, its acting chairman has told MPs.
Alistair Darling said police searches for the discs was ending, but banks had found no evidence of fraud. David Hartness told the public accounts committee there was no evidence cost efficiencies or job cuts were to blame.
He said an inquiry into the loss was "far from complete" but the Tories said his update was "wholly inadequate". He said it had been a "dreadful mistake" but denied admitting it was due to "systemic failure".
HM Revenue sent the unencrypted discs by courier in October to the National Audit Office, but they did not arrive. Earlier the chancellor said there was still no evidence information on the discs had been used by criminals.
It also emerged earlier that personal details of three million learner drivers, stored by a private contractor used by the Driving Standards Agency, have been lost in the US. Mr Hartnett took over as acting chairman of HMRC when the previous chairman Paul Gray resigned over the loss of the discs.
Accounts monitored Departments merged
Mr Darling was giving a Commons presentation of an interim report by Kieran Poynter, UK chairman at PriceWaterhouseCoopers, into the loss of the child benefit data by Revenue and Customs in October. Police are still searching for two discs, sent from HMRC offices in Tyne and Wear, unencrypted and unregistered, by courier to the National Audit Office in London. They never arrived.
He said there was still no evidence of any fraud from the loss of the two discs containing names, dates of birth, bank and address details. The discs contained personal details of 25 million people, including National Insurance numbers and bank accounts.
The loss of this data was extremely serious and should not have happened and again I apologise to everyone who has been affected. Alistair Darling Millions of L-drivers details lostThe loss of this data was extremely serious and should not have happened and again I apologise to everyone who has been affected. Alistair Darling Millions of L-drivers details lost
But police searches for the discs were "coming to a close" - although the investigation was not yet complete and banks were continuing to monitor accounts for any signs of fraudulent activity. Mr Hartnett said morale had been low after revenue and customs departments were merged, but said he had found no evidence that had contributed to the loss of the discs.
It is believed police think the two discs may have accidentally been thrown out as rubbish and police have visited several tips around London. "I think there has been a dreadful mistake here and it has had a potentially huge impact," he told MPs.
Mr Darling told MPs Mr Poynter's review had prioritised the immediate security measures that were needed at HMRC. But he said he had never agreed there was a "systemic failure", saying that was for Mr Poynter's review to determine.
Among them were banning the transfer of "bulk data" without certain security measures, and disabling lap tops to stop information being downloaded without the permission of a senior manager. 'Complete one-off'
'Catastrophic breach' He was accompanied by HMRC's new director of data security, Nick Lodge, who said that Kieran Poynter, who is conducting a review of the security breach, had advised there should be one person responsible.
He also confirmed that 1.5kg of cocaine had gone missing from an HMRC secure lock-up in Coventry and a police investigation was underway.
Mr Darling apologised again for the loss of the discs
"What I don't know at the minute is whether this cocaine has been sent for destruction, or to a court or to a forensic science laboratory and the paperwork has not been done properly - or it has been stolen. I am very worried if it is the latter," he said.
But he said it was a "complete one-off" and not evidence of a systemic failure.
And it has emerged that a pension firm, Countrywide Assured, has sent out more than 6,500 letters to its customers saying a cartridge containing their personal details had been sent to, and received by, HMRC in September but had since disappeared.
Earlier Chancellor Alistair Darling outlined the interim findings of the Poynter review. He said police searches for the discs was ending, but so far banks had found no evidence of fraud.
Security measures had been recommended including banning the transfer of "bulk data" without certain security measures, and disabling computer laptops to stop information being downloaded without the permission of a senior manager.
'Wholly inadequate'
But Mr Darling said it would be "wholly inappropriate" to draw final conclusions while more inquiries were being carried out. The full report is due "in the first half" of 2008, he said.But Mr Darling said it would be "wholly inappropriate" to draw final conclusions while more inquiries were being carried out. The full report is due "in the first half" of 2008, he said.
He said: "The loss of this data was extremely serious and should not have happened and again I apologise to everyone who has been affected." But Philip Hammond, for the Conservatives, said it was "a wholly inadequate response from a wholly inadequate chancellor".
If data and valuable information is consistently lost or stolen or abused the public completely lose confidence in government in general Vincent CableLib Dems Acting Liberal Democrat leader Vincent Cable added: "If data and valuable information is consistently lost or stolen or abused the public completely lose confidence in government in general at all levels."
Philip Hammond, for the Conservatives, said it had been "the most catastrophic data security breach in British history" and criticised Mr Darling's early explanation that a junior official who had not followed the rules was responsible. Transport Secretary Ruth Kelly has said details of three million people who took their driving theory test between September 2004 and April 2007 had disappeared from a secure facility in Iowa in the United States.
"Responsibility for systemic failure does not lie with junior staff - it lies at the very top," he said.
"In the face of the overwhelming scale of systemic failure behind this disaster, this statement can only be described as a wholly inadequate response from a wholly inadequate chancellor."
Acting Liberal Democrat leader Vincent Cable said the whole episode had done "damage" to public confidence.
"If data and valuable information is consistently lost or stolen or abused the public completely lose confidence in government in general at all levels," he said.
"It is very difficult to see how we can be confident of the government proceeding with much more ambitious initiatives, not just the compulsory ID cards scheme, but the DNA database and the NHS spine."
Meanwhile, a capability review of HM Revenue and Customs found that "the senior leadership has not been successful in injecting pace, confidence and dynamism throughout the department".Meanwhile, a capability review of HM Revenue and Customs found that "the senior leadership has not been successful in injecting pace, confidence and dynamism throughout the department".
The top team "has more to do to demonstrate that it can take the tough decisions required to set priorities and to bring about organisational clarity".The top team "has more to do to demonstrate that it can take the tough decisions required to set priorities and to bring about organisational clarity".
It also needed "a robust plan" to "resolve staff uncertainty" and be clear about what HMRC will look like in the future.It also needed "a robust plan" to "resolve staff uncertainty" and be clear about what HMRC will look like in the future.
A capability review of the Treasury found the department was "not driving change with sufficient passion and pace".A capability review of the Treasury found the department was "not driving change with sufficient passion and pace".