Extraordinary loss of child benefit records

Published on 21 November 2007

The Chancellor of the Exchequer announced yesterday that HMRC had lost two computer discs containing the personal records of child benefit recipients. These discs contain details of some 25 million individuals and 7.25 million families.

In a most extraordinary lapse of security it appears that child benefit data held by HMRC has been lost in transmission between HMRC and the National Audit Office.

There is no suggestion that the information has fallen into the wrong hands, or that it is being used for criminal or fraudulent purposes. But the banks have been asked to put in place all the precautions that they reasonably can.

We are told that the data in itself is not sufficient for anyone to access people’s bank accounts, as passwords and other information would be needed. However, as there is an increased risk, everyone should remain vigilant for unusual activity on their account.

We have been informed by HMRC that if anyone is the innocent victim of fraud, the Chancellor has said that they will have protection under the banking code and will not suffer any financial loss.

As a result of this breach of security, the Chairman of HMRC, Paul Gray, has resigned.

We regret his departure as, from our experience, he was someone who understood and empathised with the problems of people on low incomes. His background with the Department for Work & Pensions also meant that he was working to ensure that the two departments charged with the eradication of child poverty co-operated at all levels.

We fear that this loss of data and all the recriminations that are bound to follow will once again divert HMRC management from carrying out the urgent improvements that are needed to so many of HMRC processes.


Contact: John Andrews (Tel: 0844 579 6700 Fax 0844 579 6701)