Some thoughts on the Child Benefit fiasco
21 Nov 2007
There were rumours swirling around Westminster about the loss of Child Benefit data but it was only when I went into the Chamber to listen to Alastair Darling’s statement that the full extent hit me – and other MP’s. It was simply staggering that so much confidential data was on two discs that could be treated in such a cavalier way. And when the first lot went astray, a second lot were simply run off. The faces of the Labour MP's as the Chancellor made his statement said it all. This has severely dented any claim to competence.
Anyone who has ever run a Department must have had some sympathy for Alastair. No Minister can run a department single-handed, and you have to trust other people. When that trust is mis-placed, you have to take the rap. I remember, 25 years ago, when a workman put anti-freeze into the drinking water supply in the House of Commons, I was the Minister in charge. I had to make a statement to the House.
On the other hand, in a democratic system with a chain of accountability, Ministers cannot wholly distance themselves from errors in their departments. That is where the buck stops.
Turning to Child Benefit, in this country, there is a massive financial interface between citizen and state. Huge numbers pay tax, and huge numbers get benefits. Billions of pounds are churned around in Whitehall. There should be a political imperative to reduce this amount of churning, to simplify and streamline systems, and to minimise this interface between citizen and state. It would reduce - but not eliminate - the risk of data loss, and would be cheaper to run.
If we audit Child Benefit in the way described, presumably we audit pensions and other universal benefits in the same way with the same risks. Are there discs buzzing around the UK on their way to the National Audit Office that we don't yet know about?

Ministers recently merged Inland Revenue with Customs & Excise – an option I looked at when I was Financial Secretary to the Treasury ten years ago, and rejected. This has led to some organisational upheaval as two massive departments merged and a new IT system was introduced. When folk have to manage this turbulence, it is inevitable that their routine responsibilities may take second place.
And associated with that, there have been staff reductions in HMRC which may have led to short-cuts being taken and to low morale.
One other factor that has not been mentioned. Until a few years ago, responsibility for Child Benefit rested with the Department of Work and Pensions. That Department specialises in paying out. This Government transferred responsibility from DWP to HMRC - a Department that specialises in getting money in. We opposed that transfer, and this additional bruden on HMRC cannot have helped.
We await the outcome of all the enquiries that are now under way which will shed light on some of these questions.
If this data has fallen into wrong hands, that will put an entirely different complexion on the issue; likewise if the data is recovered.
In the meantime, constituents are emailing me with wholly understandable anxiety and anger. Their confidence in government has been undermined. What about their medical records? the DVLA?
And how good is Government at running things? I am inundated with complaints about Tax Credits and the Child Support Agency.
And where does this leave the debate on Identity Cards?
As always, I would be delighted to hear the views of constituents.
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