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Personal Data of Millions Lost in U.K. Security Breach

The personal details of half of Britons have been mislaid by the government, finance minister Alistair Darling said on Tuesday, in another major blow to an administration reeling from an earlier banking debacle.

The opposition Conservatives accused Prime Minister Gordon Brown's Labor government of laying 25 million people open to identity theft and bank fraud, ridiculing its competence.

The head of Britain's tax authority, Paul Gray, quit earlier and Darling described the incident as a "serious failure" on the part of the revenue collector, already embroiled in two other breaches of security.

Darling told parliament two discs containing information on 25 million Britons had disappeared after being sent through the courier used by the nation's Revenue and Customs office, Dutch mail and parcel company TNT NV, and a police investigation was underway. There was no sign of fraud at present, he said.

"The missing information contains details of all child benefit recipients: records for 25 million individuals and 7.25 million families," Darling said. "These records include the recipient and their children's names, addresses and dates of birth, it includes Child Benefit numbers, National Insurance Numbers, and, where relevant, bank or building society account details."

The finance minister, already under fire for the crisis at mortgage bank Northern Rock, which suffered Britain's first bank run in more than a century in September, said the details were not enough for someone to access a bank account fraudulently.

But he warned the public to monitor their accounts and guard against any unusual activity.


Government Already Suffering

Political analysts said the revelation could not have come at a worse time with Brown's popularity already suffering after Northern Rock and with the economy set for a slowdown next year.

"It's another thing at a bad time," said Nick Moon, director of political research at NOP, a market research organization. "It adds to a perception that the government does not know what's going on."

The opposition was gleeful.

"Get a grip and deliver a basic level of competence," Conservative Treasury spokesman George Osborne shouted across the parliamentary floor at Darling. "Half the country will be very anxious about the safety of their family and security of their accounts will be wondering how the government allowed this to happen."

Business groups were also worried that if this could happen to consumer details, data on companies could also easily pass into the wrong hands.

"The inevitable result will be that people and businesses stop providing it where possible," said Frank Haskew, head of the Institute of Chartered Accountants in England and Wales tax faculty.

Government Information Commissioner Richard Thomas said he had warned several times about the danger of poor data security.

"There's so much risk now with collecting personal data that every organization, right from the top, needs to take security and other data protection safeguards very seriously indeed," he told Channel 4 News.

The Conservatives said this marked the final blow to government plans to introduce a national identity card system. "They simply cannot be trusted with people's personal data," said Osborne.