Gordon Brown said something today which I have never heard him say before. Sorry.

Referring to the government’s loss of 25m pieces of personal data in the post - described by one security expert as a "starter kid for identity fraud" - the prime minister did not mess around.

"I profoundly regret and apologise for the inconvenience and worries that have been caused to millions of families who receive child benefit," he told the Commons.

This seems to be the first time Mr Brown has apologised for anything as prime minister. I don’t recollect him ever apologising for anything, and his aides looked flummoxed when I asked them whether this was a first.

Mr Brown has expressed regret for his decision to raise the state pension by just 75p one year, according to Downing St officials. But that isn’t exactly the same as issuing an apology.

So - if this is indeed a first for Mr Brown - it shows the political magnitude of this data blunder and the possible damage it could do to the government.

What I’d like to know is whether the government is now going to underwrite every case of fraud committed on every parents’ bank account in the land - if these discs got into the hands of big-time crooks.

Mr Brown again repeated that any fraud would be compensated through the banking industry’s own code. But Treasury officials have also told me that the banks could then get that money back off HM Revenue and Customs, if they could show the fraud was linked to the lost data.

What we know about fraudsters is that - if they got their hands on the missing CDs - they would probably wait a few months before starting to rip off the banks.

In which case, how would the banks know whether HMRC was to blame? Or, put it another way, how could the government say it was not its fault, if the discs are still out there somewhere?

Is the government nationalising the Banking Code and its fraud compensation scheme? After guaranteeing deposits in the Northern Rock, is this starting to become a habit?

November 21st, 2007 in Labour, The business vote | Permalink