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The hon. Member for Tatton asked about letters and the competence with which they had been issued. Her Majesty’s Revenue and Customs send out more than 7 million letters. That is a big logistical exercise. Up to close of business on 26 November, the child benefit helpline had handled approximately 39,000 calls from customers who were concerned about the data loss. However, it might be of interest to hon. Members to know, by way of comparison, that HMRC contact
centres received on average 150,000 calls a day throughout 2006-07 on all their lines of business. That puts in perspective the way in which the public have rightly been able to access call centres to gain advice about their details.
We are not aware of the specific case of the letters that the hon. Member for Tatton mentioned. If what he said is true—I have no reason to doubt it—HMRC regrets that it has happened in a small number of cases. The details in the letters are not sufficient on their own to establish identity in order to open a bank account, claim benefits or in any way abuse an individual’s identity.
The motion asks what policy changes will be introduced to protect the public in future. First, HMRC has immediately communicated to all staff three key steps that must be followed. Transfers must take place only if they are absolutely necessary, written authorisation for the transfer must be given by a senior HMRC manager and a clear instruction must be given regarding the appropriate standard of protection for the transfer. Where directors decide that a data transfer by disc is absolutely unavoidable, such media must in every case be securely encrypted at the appropriate level. Those changes are already in place.
Mr. Ben Wallace (Lancaster and Wyre) (Con): Will the Financial Secretary give way?
Jane Kennedy: I am not sure that the hon. Gentleman has been present throughout the debate. I have a limited amount of time, so if he will permit me, I shall press on and try to respond to some of the serious and thoughtful contributions that have been made.
Secondly, Kieran Poynter, the chairman of PricewaterhouseCoopers, has agreed to undertake an independent review of our data-handling processes in HMRC. His report will be ready by 14 December. Thirdly, the Prime Minister immediately gave the Information Commissioner additional powers to undertake spot checks in relation to Government buildings. I was glad to see that step being taken. The Prime Minister has also asked Gus O’Donnell to ensure that all Departments’ and agencies’ procedures are being implemented in full and to identify where improvements can be made. I hope that that will serve as the reassurance that the hon. Member for Twickenham (Dr. Cable) asked for earlier.
The final part of the Opposition motion asks what policy changes will introduced to protect the public. Again, HMRC put in place immediate steps to improve data security. We have undertaken comprehensive steps to protect customers, to find the missing data and to ensure that the lessons are learned and that all efforts are being made to ensure that such a loss can never happen again.
A number of hon. Members raised proper questions on the steps that we are taking on encryption. It may be of interest to the House to hear what has been done. HMRC has established a central team to handle encryption on behalf of the organisation, to ensure that the proper deployment of encryption is used at the appropriate level. All bulk transfers of sensitive data using CDs are being encrypted and password protected where necessary. Those procedures were implemented on 21 November. [Hon. Members: “Ah!”] Hon.
Members wanted to know what had been done in response and I am explaining what has happened. HMRC has removed the facility for staff to use CDs and other removable media, and only in exceptional circumstances and on approval at director level, as I have said, are staff given access. HMRC is also investigating the electronic transmission of data. It is consulting with the British Bankers Association and currently undertaking further talks to agree standards for and methods of deploying electronic transfers.
I thank the hon. Member for Ludlow (Mr. Dunne) for his comments about Mr. Paul Gray. I agree with the hon. Gentleman that Mr. Gray has given distinguished service to more than one Whitehall Department, as my right hon. Friend the Chancellor acknowledged last week. The hon. Gentleman went into detail about the three e-mails and about what they do and do not say. I say to him and every other hon. Member who has raised the matter that three e-mails do not tell the full story. That is why it is entirely appropriate that we wait for the inquiries. After that, the House will be able to judge the detail of what has happened. It is not a question of lack of resources or staff cuts; the breach of security should not have happened and there is no excuse for it. I am confident that had the procedures that were already in place been followed, the data would have been protected.
The hon. Member for Twickenham made a sensible and thoughtful speech. I have responded to his point about encryption, although I do not accept his point about a lack of scrutiny across government. I hope that the work that Gus O’Donnell is undertaking will ensure that the concerns that the hon. Gentleman raised are properly dealt with.
The right hon. Member for Charnwood (Mr. Dorrell), who gave the most distinguished service as a Cabinet Minister and for whom I have the highest regard, made perhaps the most serious speech to which I am going to respond. I hope that he will accept that my right hon. Friend the Chancellor and I have been entirely focused on what should be the proper way for data relating to customers of Her Majesty’s Revenue and Customs to be respected. I agreed with a large part of his criticism. As I have said, procedures were in place. It is not the case that there is a systemic disregard right across Her Majesty’s Revenue and Customs for the protection of customers’ details. If the procedures that are in place had been followed, we would have safeguarded the confidential information that was requested by the National Audit Office. I know that the staff of Her Majesty’s Revenue and Customs are horrified at the failure that we have disclosed to the House.
I know that the House is very concerned about the nature of what we have been debating today. I should like to leave hon. Members with a quote on the question of whether the merger should ever have happened. This also brings me to the final speech to which I wish to respond, that of the right hon. Member for North-West Hampshire (Sir George Young), whom I also admire very much. Mr. Jeffrey Owens, the director of the centre for tax policy and administration of the Organisation for Economic Co-operation and
Development, has said the following in conversation with my office, and he is prepared to allow me to use this quote:
“The allegation that the merger of the Inland Revenue and Customs and Excise was a mistake is completely unfounded. The merger was the right thing to do and other countries that have taken this route have found that once the merger has bedded-in, real benefits start to flow through. In fact, out of the other 30 OECD countries there is only one that hasn’t adopted this approach. Comparing the UK to the other OECD countries”—
Mr. Andrew Robathan (Blaby) (Con): On a point of order, Mr. Deputy Speaker—
Mr. Deputy Speaker: Order. I think that the right hon. Lady has perhaps anticipated the hon. Gentleman, if she has completed the quotation and her speech.
Jane Kennedy: Can I just finish the quote, Mr. Deputy Speaker?
Mr. Deputy Speaker: In the spirit of the occasion, yes, if the right hon. Lady will do so briefly.
Jane Kennedy: Jeffrey Owens’ very last comment is:
“Comparing the UK to the other OECD countries, it is quite clear that HMRC is one of the lead tax administrations, both in terms of service delivery and enforcement.”
I shall await the inquiry, as I am sure will the rest of the House.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 235, Noes 312.
AYES
Afriyie, Adam
Ainsworth, Mr. Peter
Alexander, Danny
Amess, Mr. David
Ancram, rh Mr. Michael
Arbuthnot, rh Mr. James
Atkinson, Mr. Peter
Bacon, Mr. Richard
Baker, Norman
Baldry, Tony
Barker, Gregory
Baron, Mr. John
Barrett, John
Beith, rh Mr. Alan
Bellingham, Mr. Henry
Bercow, John
Beresford, Sir Paul
Binley, Mr. Brian
Bone, Mr. Peter
Boswell, Mr. Tim
Bottomley, Peter
Brake, Tom
Brazier, Mr. Julian
Brokenshire, James
Brooke, Annette
Browne, Mr. Jeremy
Browning, Angela
Burns, Mr. Simon
Burrowes, Mr. David
Burstow, Mr. Paul
Burt, Lorely
Butterfill, Sir John
Cable, Dr. Vincent
Campbell, Mr. Gregory
Campbell, rh Sir Menzies
Carmichael, Mr. Alistair
Carswell, Mr. Douglas
Cash, Mr. William
Chope, Mr. Christopher
Clappison, Mr. James
Clark, Greg
Clarke, rh Mr. Kenneth
Clifton-Brown, Mr. Geoffrey
Conway, Derek
Cormack, Sir Patrick
Crabb, Mr. Stephen
Curry, rh Mr. David
Davies, Mr. Dai
Davies, Philip
Davis, rh David (Haltemprice and Howden)
Djanogly, Mr. Jonathan
Dodds, Mr. Nigel
Dorrell, rh Mr. Stephen
Dorries, Mrs. Nadine
Duncan, Alan
Dunne, Mr. Philip
Evennett, Mr. David
Fabricant, Michael
Farron, Tim
Featherstone, Lynne
Field, Mr. Mark
Foster, Mr. Don
Fox, Dr. Liam
Francois, Mr. Mark
Fraser, Mr. Christopher
Gale, Mr. Roger
Garnier, Mr. Edward
Gauke, Mr. David
George, Andrew
Gibb, Mr. Nick
Gidley, Sandra
Gillan, Mrs. Cheryl
Goldsworthy, Julia
Goodman, Mr. Paul
Goodwill, Mr. Robert
Gove, Michael
Gray, Mr. James
Grayling, Chris
Green, Damian
Greening, Justine
Greenway, Mr. John
Grieve, Mr. Dominic
Gummer, rh Mr. John
Hammond, Mr. Philip
Hammond, Stephen
Hancock, Mr. Mike
Hands, Mr. Greg
Harper, Mr. Mark
Harris, Dr. Evan
Harvey, Nick
Hayes, Mr. John
Heald, Mr. Oliver
Heath, Mr. David
Heathcoat-Amory, rh Mr. David
Hemming, John
Hendry, Charles
Herbert, Nick
Hermon, Lady
Hoban, Mr. Mark
Hogg, rh Mr. Douglas
Hollobone, Mr. Philip
Holloway, Mr. Adam
Holmes, Paul
Horam, Mr. John
Horwood, Martin
Hosie, Stewart
Howarth, David
Howarth, Mr. Gerald
Hughes, Simon
Hunter, Mark
Hurd, Mr. Nick
Jack, rh Mr. Michael
Jackson, Mr. Stewart
Jenkin, Mr. Bernard
Johnson, Mr. Boris
Jones, Mr. David
Kawczynski, Daniel
Keetch, Mr. Paul
Key, Robert
Kirkbride, Miss Julie
Knight, rh Mr. Greg
Kramer, Susan
Laing, Mrs. Eleanor
Lait, Mrs. Jacqui
Lamb, Norman
Lansley, Mr. Andrew
Leech, Mr. John
Lewis, Dr. Julian
Liddell-Grainger, Mr. an
Lidington, Mr. David
Llwyd, Mr. Elfyn
Loughton, Tim
Luff, Peter
Mackay, rh Mr. Andrew
Maclean, rh David
MacNeil, Mr. Angus
Main, Anne
Malins, Mr. Humfrey
Maples, Mr. John
Mates, rh Mr. Michael
Maude, rh Mr. Francis
May, rh Mrs. Theresa
McCrea, Dr. William
McIntosh, Miss Anne
McLoughlin, rh Mr. Patrick
Mercer, Patrick
Miller, Mrs. Maria
Milton, Anne
Mitchell, Mr. Andrew
Moore, Mr. Michael
Moss, Mr. Malcolm
Mulholland, Greg
Mundell, David
Murrison, Dr. Andrew
Neill, Robert
Newmark, Mr. Brooks
O'Brien, Mr. Stephen
Oaten, Mr. Mark
Öpik, Lembit
Osborne, Mr. George
Ottaway, Richard
Paterson, Mr. Owen
Penning, Mike
Penrose, John
Pickles, Mr. Eric
Price, Adam
Prisk, Mr. Mark
Pritchard, Mark
Redwood, rh Mr. John
Reid, Mr. Alan
Rennie, Willie
Rifkind, rh Sir Malcolm
Robathan, Mr. Andrew
Robertson, Angus
Robertson, Mr. Laurence
Robinson, Mrs. Iris
Rogerson, Dan
Rosindell, Andrew
Rowen, Paul
Russell, Bob
Sanders, Mr. Adrian
Scott, Mr. Lee
Selous, Andrew
Shapps, Grant
Shepherd, Mr. Richard
Simmonds, Mark
Simpson, David
Soames, Mr. Nicholas
Spelman, Mrs. Caroline
Spicer, Sir Michael
Spring, Mr. Richard
Stanley, rh Sir John
Steen, Mr. Anthony
Stuart, Mr. Graham
Stunell, Andrew
Swayne, Mr. Desmond
Swinson, Jo
Swire, Mr. Hugo
Tapsell, Sir Peter
Taylor, Mr. Ian
Taylor, Matthew
Taylor, Dr. Richard
Teather, Sarah
Thurso, John
Turner, Mr. Andrew
Tyrie, Mr. Andrew
Vaizey, Mr. Edward
Vara, Mr. Shailesh
Viggers, Peter
Walker, Mr. Charles
Wallace, Mr. Ben
Walter, Mr. Robert
Waterson, Mr. Nigel
Watkinson, Angela
Webb, Steve
Weir, Mr. Mike
Whittingdale, Mr. John
Widdecombe, rh Miss Ann
Wiggin, Bill
Willetts, Mr. David
Williams, Hywel
Williams, Mark
Williams, Mr. Roger
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Wilson, Mr. Rob
Wilson, Sammy
Winterton, Ann
Winterton, Sir Nicholas
Wishart, Pete
Wright, Jeremy
Yeo, Mr. Tim
Young, rh Sir George
Younger-Ross, Richard
Tellers for the Ayes:
Mr. Crispin Blunt and
Mr. Richard Benyon
NOES
Abbott, Ms Diane
Ainsworth, rh Mr. Bob
Alexander, rh Mr. Douglas
Allen, Mr. Graham
Anderson, Mr. David
Anderson, Janet
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Austin, John
Bailey, Mr. Adrian
Baird, Vera
Balls, rh Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Beckett, rh Margaret
Begg, Miss Anne
Bell, Sir Stuart
Benn, rh Hilary
Benton, Mr. Joe
Berry, Roger
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blears, rh Hazel
Blizzard, Mr. Bob
Bradshaw, Mr. Ben
Brown, Lyn
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Browne, rh Des
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, rh Andy
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, Mr. Liam
Cairns, David
Campbell, Mr. Alan
Campbell, Mr. Ronnie
Caton, Mr. Martin
Cawsey, Mr. Ian
Challen, Colin
Chapman, Ben
Chaytor, Mr. David
Clapham, Mr. Michael
Clark, Ms Katy
Clark, Paul
Clarke, rh Mr. Charles
Clarke, rh Mr. Tom
Clelland, Mr. David
Coaker, Mr. Vernon
Coffey, Ann
Connarty, Michael
Cook, Frank
Cooper, Rosie
Cooper, rh Yvette
Corbyn, Jeremy
Crausby, Mr. David
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
Darling, rh Mr. Alistair
David, Mr. Wayne
Davidson, Mr. Ian
Davies, Mr. Quentin
Dean, Mrs. Janet
Denham, rh Mr. John
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dismore, Mr. Andrew
Dobbin, Jim
Dobson, rh Frank
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Drew, Mr. David
Dunwoody, Mrs. Gwyneth
Eagle, Angela
Eagle, Maria
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Etherington, Bill
Farrelly, Paul
Field, rh Mr. Frank
Fitzpatrick, Jim
Flello, Mr. Robert
Flint, Caroline
Follett, Barbara
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
Godsiff, Mr. Roger
Goggins, Paul
Goodman, Helen
Griffith, Nia
Griffiths, Nigel
Grogan, Mr. John
Gwynne, Andrew
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. David
Hamilton, Mr. Fabian
Hanson, rh Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Henderson, Mr. Doug
Hendrick, Mr. Mark
Hepburn, Mr. Stephen
Heppell, Mr. John
Hesford, Stephen
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodge, rh Margaret
Hodgson, Mrs. Sharon
Hoey, Kate
Hood, Mr. Jim
Hoon, rh Mr. Geoffrey
Hope, Phil
Hopkins, Kelvin
Howells, Dr. Kim
Hoyle, Mr. Lindsay
Humble, Mrs. Joan
Hutton, rh Mr. John
Iddon, Dr. Brian
Illsley, Mr. Eric
Ingram, rh Mr. Adam
Irranca-Davies, Huw
Jackson, Glenda
James, Mrs. Siân C.
Jenkins, Mr. Brian
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jones, Lynne
Jones, Mr. Martyn
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Kennedy, rh Jane
Khan, Mr. Sadiq
Kidney, Mr. David
Knight, Jim
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Lloyd, Tony
Love, Mr. Andrew
Lucas, Ian
Mackinlay, Andrew
MacShane, rh Mr. Denis
Mactaggart, Fiona
Mahmood, Mr. Khalid
Malik, Mr. Shahid
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Marshall, Mr. David
Marshall-Andrews, Mr. Robert
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCabe, Steve
McCarthy, Kerry
McCarthy-Fry, Sarah
McCartney, rh Mr. Ian
McDonagh, Siobhain
McDonnell, Dr. Alasdair
McDonnell, John
McGovern, Mr. Jim
McGuire, Mrs. Anne
McIsaac, Shona
McKenna, Rosemary
McNulty, rh Mr. Tony
Meacher, rh Mr. Michael
Merron, Gillian
Michael, rh Alun
Miliband, rh David
Miliband, rh Edward
Miller, Andrew
Mitchell, Mr. Austin
Moffat, Anne
Moffatt, Laura
Mole, Chris
Moran, Margaret
Morden, Jessica
Morgan, Julie
Morley, rh Mr. Elliot
Mountford, Kali
Mudie, Mr. George
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Denis
Murphy, Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
O'Brien, Mr. Mike
O'Hara, Mr. Edward
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pearson, Ian
Plaskitt, Mr. James
Pope, Mr. Greg
Prentice, Bridget
Prentice, Mr. Gordon
Prescott, rh Mr. John
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, rh James
Rammell, Bill
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Riordan, Mrs. Linda
Robertson, John
Robinson, Mr. Geoffrey
Rooney, Mr. Terry
Roy, Mr. Frank
Ruane, Chris
Ruddock, Joan
Russell, Christine
Ryan, rh Joan
Salter, Martin
Sarwar, Mr. Mohammad
Seabeck, Alison
Sharma, Mr. Virendra
Shaw, Jonathan
Sheerman, Mr. Barry
Sheridan, Jim
Simon, Mr. Siôn
Simpson, Alan
Skinner, Mr. Dennis
Slaughter, Mr. Andy
Smith, rh Mr. Andrew
Smith, Ms Angela C. (Sheffield, Hillsborough)
Smith, Angela E. (Basildon)
Smith, Geraldine
Smith, rh Jacqui
Smith, John
Snelgrove, Anne
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Straw, rh Mr. Jack
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Taylor, Ms Dari
Taylor, David
Thomas, Mr. Gareth
Tipping, Paddy
Touhig, rh Mr. Don
Trickett, Jon
Truswell, Mr. Paul
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Ussher, Kitty
Vaz, rh Keith
Vis, Dr. Rudi
Walley, Joan
Waltho, Lynda
Watson, Mr. Tom
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, rh Mr. Alan
Williams, Mrs. Betty
Wills, Mr. Michael
Wilson, Phil
Winnick, Mr. David
Winterton, rh Ms Rosie
Woodward, rh Mr. Shaun
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Wyatt, Derek
Tellers for the Noes:
Claire Ward and
Mr. Dave Watts
Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
Mr. Deputy Speaker forthwith d eclared the main Question, as amended, to be agreed to.
That this House approves of the decisive action taken by the Government when it became aware of the data loss by HM Revenue and Customs, including the collaborative work undertaken in association with the UK Payments Association, the British Bankers Association and the Building Societies Association and through them individual banks, building societies and other financial institutions which enabled them to put in place appropriate safeguards and monitor any irregular activity; welcomes the decision of the Chancellor of the Exchequer to initiate an urgent investigation by the Metropolitan Police and his appointment of Mr Kieran Poynter to conduct an independent review of HM Revenue and Customs’ data handling procedures; acknowledges the steps which have already been taken to improve the department’s data transfer processes; and notes the Chancellor’s assurance that he will keep the House fully informed of further developments.
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