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25m confidential records missing

By Gary Gibbon

Updated on 20 November 2007

Last month an official in the Revenue and Customs office downloaded the confidential details of 25 million individuals onto two discs.

The official then popped them in an internal post envelope and plopped that in the office out-tray. They were meant to be sent to the National Audit Office, but they've never been seen since.

The chancellor Alistair Darling came to the Commons to say this was just one of a series of security lapses at Customs and Revenue, and investigations had only just begun.

The chancellor reported that a junior customs official put the two discs packed with millions of individuals confidential details into the internal post on October 18.

About a week later, the audit office in London reported that they hadn't turned up.

The official then downloaded the information again, this time splashing out on recorded delivery, and the discs arrived.

Customs management say they only heard about the missing discs on November 8.

Two days later the news was broken to the chancellor and the prime minister.

Staff at the child benefit office in Washington, Tyne and Wear, have been interviewed and the premises searched.

Last week, the police were called in to investigate any possible foul play, and their latest advice is that they see no reason to believe that the discs are in the wrong hands. But there's speculation about how criminals could use the data to gain access to confidential information, or to set up fraudulent credit card accounts.

The treasury said tonight that individuals should keep an eye on their bank accounts to check there are no unusual money movements. The opposition said the treasury was out of control.

The Revenue and Customs chairman Paul Gray resigned today. Channel 4 News has learnt that he'd been very concerned about a series of security lapses this year and had asked to be notified about every single one.

Paul Gray, Revenue and Customs

"This is not the way I would have planned to organise my departure from HMRC. I had hoped to be around a while longer, and to have had the continuing privilege of leading HMRC towards the vision we have been developing."

In a resignation statement to staff he said: "This is not the way I would have planned to organise my departure from HMRC. I had hoped to be around a while longer, and to have had the continuing privilege of leading HMRC towards the vision we have been developing."

Even if the discs turn up there will be a big political fall-out. The chancellor revealed the same data on child benefit claimants had actually been sent a third time - through the post - in March this year.

It suggests that government data security rules may have been regularly breached.

An outside inquiry is now under way, and flak is already flying in Whitehall.

The danger for the government is that the opposition's charge of incompetence sticks.

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