Losing data 'should be a criminal offence', say MPs

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Managers should also be obliged to report losses of data and other breaches to the Government's information watchdog.

The controversial recommendations, in a report by the Justice Select Committee, are likely to encounter fierce opposition from firms that deal with large amounts of personal information - such as banks and telecoms groups.

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The HMRC office from where two discs containing millions of people's details were lost: the loss of such information could become a criminal offence in future

Fears over data security have been fuelled by a series of scandals, including the loss by HM Revenue and Customs of 25 million people's child benefit records.

The MPs warned that the massive HMRC breach was not an "isolated example", and there was evidence of a "widespread problem within Government relating to establishing systems for data protection and operating them adequately".

They urged Prime Minister Gordon Brown to rush through plans to give Information Commissioner Richard Thomas powers to carry out unannounced "spot checks" on procedures in firms and Whitehall departments.

The report also backed Mr Thomas's call for new laws which would punish those who put people's details at risk.

"There is currently no criminal offence of a data controller (such as a private business or a Government department) intentionally or recklessly disclosing personal information," the MPs wrote.

"Furthermore, the current criminal offences only cover individuals and non-Governmental bodies or organisations; Government departments or agencies cannot be held criminally responsible for data protection breaches."

Committee chairman Alan Beith said: "The scale of the data loss by Government bodies and contractors is truly shocking but the evidence we have had points to further hidden problems.

"It is frankly incredible, for example, that the measures HMRC has put in place (as described in the Chancellor's statement of December 17) were not already standard procedure."

A Ministry of Justice spokeswoman said: "The Government takes data protection seriously and welcomes the report of the Justice Committee.

"The Government identified the need to strengthen the UK's data protection framework before the HMRC data loss. It commissioned the Thomas/Walport Review in October 2007.

"Parliament is currently considering proposals to amend s60 of the DPA through the Criminal Justice and Immigration Bill. This will provide a custodial sanction as well as the existing fines for those found guilty of unlawfully obtaining or disclosing personal data."