17 December 2007
Statement to the House of Commons by Chancellor of the Exchequer, Alistair Darling, MP on the Poynter review
Mr Speaker, with your permission I should like to make a statement on the progress report by Kieran Poynter, Chairman and Senior Partner of PricewaterhouseCoopers, into the loss of child benefit records at HM Revenue and Customs.
Mr Speaker, before I turn to that I can confirm that the police investigation continues. And while the searches are drawing to a close their inquiry is not yet complete.
However, the police have reiterated that they have no information or intelligence that the data has fallen into wrong hands.
They will keep that under review.
The banks too say they have found no evidence of any activities suggesting evidence of fraud arising from this incident. They continue to monitor closely the accounts concerned so they can see immediately if there is any unusual or irregular activity.
As I have told the House previously, the majority of accounts into which child benefit payments are made are with a small number of banks and these banks have checked them back to 18 October, the date the missing data was posted. There are no reports of any activities suggesting increased fraud attempts deriving from the incident.
Mr Speaker, I deliberately gave Mr Poynter wide-ranging terms of reference because of the seriousness of this loss, together with my concern about previous losses of data which I referred to in my statement on 20 November.
Mr Poynter started his review on 23 November, just three weeks ago.
And as he says his work is far from complete and his conclusions will develop as his work progresses.
Inevitably therefore this report is short, but I said, last month, that I would return to the House when it became available. A copy has been placed in the Vote Office in the usual way.
Kieran Poynter sets out the work he has put in hand. He says that he has given priority to the immediate steps Revenue and Customs must take to protect data security.
Revenue and Customs have already put in place a number of measures. Mr Poynter says that these are measures that he would have recommended and which are set out in his report.
As Mr Hartnett the Acting Head of Revenue and Customs said to the Treasury Select Committee on 5 December, they include the imposition of a complete ban on the transfer of bulk data without adequate security protection such as encryption, as well as measures to prevent the downloading of data without adequate security safeguards.
In addition, Revenue and Customs disabled all the personal and laptop computers it uses to prevent the downloading of data onto removable media, and they will only be reactivated at the approval of a senior manager for a specific business critical purpose.
Mr Poynter has also begun his investigation into exactly what happened in relation to the loss. But he makes the point that there are more enquires to be made, more interviews to be carried out and greater examination of the evidence available. As he says, it would be wholly inappropriate of him to draw final conclusions until his work is completed.
Mr Poynter also draws attention to the responsibilities and accountability in HM Revenue and Customs generally.
These issues are also referred to in the Capability Review into HM Revenue and Customs carried out by an independent panel overseen by the Cabinet Secretary.
The House will be aware this review was commissioned as part of a general review of the strengths and weaknesses of all government departments and announced in July 2006. Revenue and Customs' review is published today, along with the Treasury's and updates for four other departments. I am also publishing Revenue and Customs' Autumn Performance Report.
The Capability Review identifies a number of important strengths of Revenue and Customs, including a proven ability to bring in the money to fund public services while driving down its own costs and delivering greater efficiency. It refers to committed people with honesty and integrity, and with clear desire to transform and improve.
The review also highlights a number of areas where improvements are needed, including the necessity of setting up a simpler structure and clearer accountability, improving confidence and strengthening management information.
The Acting Chairman agrees and is announcing proposals to put in place a simpler organisational structure with clearer accountabilities which, as Mr Poynter says, will make it easier to implement recommendations on data security as his review progresses.
Mr Speaker, I said in my statement that Prime Minister had asked the Cabinet Secretary to ensure every government department checked their procedures for the storage and use of data, and to make recommendations on how to improve data handling procedures across government. His interim report is also published today, alongside a Written Ministerial Statement by the Minister for the Cabinet Office.
The Prime Minister has already announced the Information Commissioner will have the power to conduct spot checks on departments.
There will now also be new sanctions under the Data Protection Act for the most serious breaches of its principles.
These will take account of the need not only to provide high levels of data security but also to ensure that sensible data sharing practices can be conducted with legal certainty. We will consult early in the New Year on how this can best be done.
There are also a range of other measures set out in the report.
Mr Speaker, Revenue and Customs and before that the Inland Revenue and HM Customs and Excise have served successive governments well.
Their staff are dedicated and hard working.
However, the loss of this data was extremely serious and should not have happened and again I apologise to everyone who has been affected.
As I told the House in November the loss of this data together with losses in previous incidents means that a wide-ranging review is necessary so that lessons could be learnt, procedures tightened and security improved.
Mr Poynter tells me he expects to conclude his work in the first half of next year and I shall report back to the House when I have his final report.
I commend this statement to the House.