Business leaders lose confidence in Chancellor

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The reputation of the Chancellor, Alistair Darling, among business leaders has slumped in the wake of the Northern Rock crisis, according to a survey. Fewer leading businessmen think Mr Darling understands business than last month and fewer believe that he is well-equipped to steer the economy through problems, while more of them feel he is out of his depth, the poll by ComRes, formerly CommunicateResearch, showed.

The setback came as the Treasury's embarrassment over the Datagate scandal deepened. It emerged yesterday that unencrypted discs with 25 million child benefit records on them were handed to the accountancy firm KPMG by the National Audit Office (NAO) for auditing. Similar to the ones lost by HM Revenue & Customs (HMRC), they included details of people's bank accounts. The discs were delivered to KPMG by hand and returned safely. KPMG has assured the NAO that the data has been erased from its computer system.

Richard Thomas, the Information Commissioner, declined to comment on whether the law was broken. A spokesman said he would look at "all aspects" of data protection surrounding the missing child benefit records as part of his investigation.

Today, David Cameron will blame the loss of data by HMRC on the Government for being "stuck in the bureaucratic age". Speaking in Prague, the Tory leader will say that the scandal is a "shocking consequence" of the "bureaucratic over-reach" which has seen the Government creep further and further into people's lives.

Mr Darling said: "Revenue & Customs is established as an organisation separate from mainstream government," but admitted, from his Edinburgh South West constituency, that the Government was going through "some difficult times".

The "Darling index" produced by ComRes after interviews with 100 leading businessmen found that the Chancellor's standing declined in the past month as he received more media exposure. The number of business leaders who had no opinion about him dropped sharply and most of those now expressing one went against him. The proportion of business figures who do not think the Chancellor "seems like he understands business" has risen from 42 per cent last month to 71 per cent. The number who do not believe he is "well equipped to steer the economy through problems like Northern Rock" has increased from 69 per cent to 76 per cent. Some 62 per cent feel Mr Darling is "out of his depth" – up from 57 per cent last month. The number who think his plans to reform capital gains tax will damage business has risen from 61 per cent to 69 per cent.

Today a Guardian/ICM poll put Labour on 31 per cent, down four points , and almost as low as the party's scores in April when they trailed the Tories by seven points as Tony Blair drifted towards the end of his premiership. Today's poll put the Tories on 37 per cent, down three points.

George Osborne, the shadow Chancellor, said: "Alistair Darling's inept handling of the Northern Rock crisis has contributed to the collapse in public confidence in his ability to do his job."

He called on Mr Darling to spell out the amount of taxpayers' money that might be involved in supporting Northern Rock after reports that the total exposure could be as high as £50bn.