[~Kizwiz~]

Chancellor Alistair Darling is making a statement to MPs after details of 15 million child benefit recipients was lost by HM Revenue and Customs.
The confidential details were contained on a computer disc and is understood to have been lost in transit.

The organisation's chairman, Paul Gray, resigned earlier.

Revenue and Customs says it does not think the records - names, addresses, date of birth and bank accounts - have fallen into the wrong hands.

Police inquiries

BBC political editor Nick Robinson said he understood ministers had been aware of the problem for nine to 10 days.

The Metropolitan Police have confirmed they are "making inquiries" into the discs.

A source close to the Child Benefits Agency has told the BBC that they understand a courier was carrying the disc between its headquarters in Washington, Tyne and Wear and London when it went missing. An internal inquiry has begun.

Mr Darling is expected to outline the measures taken to protect those whose data has been lost and explain any delay in making the matter public.

The resignation of Mr Gray was accepted because discs had been transported in breach of rules governing data protection.

In a letter to Revenue and Customs staff, he said: "This is not the way I would have planned to organise my departure from HMRC.

"I had hoped to be around for a while longer, and to have had the continuing privilege of leading HMRC towards the vision we have been developing.

"But I am extremely proud of what all of you in the organisation have achieved during my time as deputy chairman and chairman."

'Difficult job'

He was defended by Jonathan Baume, general secretary of the FDA, the union for senior public servants, who said while there had been a "serious operational error" Mr Grey "was in no way personally responsible".

"His decision to take on this accountability is an example of British public service at its best," he said.

Home Office minister Liam Byrne said: "I think that the department does a difficult job and I think it does it well - the chancellor will set out a full statement and a full account to the background of this story a little later on."

But Conservative MP Michael Fallon, who is vice-chairman of the Treasury select committee, said there had been "persistent rumours that all is not well at Revenue and Customs".

Nigel Evans, head of the Parliamentary All Party Group on Identity Fraud, said he wanted to know exactly what information was on the disc - such as bank account numbers and sort codes - and whether it was encrypted or password protected.

'Horrendous problem'

The Tory MP also said the chancellor would have to explain why he did not immediately publicise the problem: "He should have told the public straight away in order that they could have taken precautions against anyone's information being used by ID fraudsters."

And for the Liberal Democrats, Chris Huhne told the BBC: "It is a horrendous problem, it's one of the biggest failures in a major government department that I can remember.

"It's an enormous delivery problem and I think that clearly that's been recognised by the head of HMRC when he resigned... I would be surprised if we did not see ministerial heads rolling as well."

Customs and Excise was merged with the Inland Revenue in 2005, creating the biggest department in Whitehall. It was also ordered to reduce its 94,000 total staff by 25,000.

It is run by an executive board, but the chancellor is responsible to Parliament for its operations.

It collects taxes and other government receipts worth about £400bn a year, as well as administering benefits and tax credits, which require it to process large amounts of personal data.

BBC News