Gordon Brown has issued an unprecedented apology for the HM Revenue and Customs (HMRC) data fiasco as the Tories sought to hold him personally responsible for exposing millions of people to identity fraud.
Pressure mounted on the Prime Minister yesterday to abandon plans for a compulsory identity card scheme, which No 10 insisted would go ahead. Some ministers and Labour MPs believe the HMRC affair may force a rethink.
Mr Brown told the Commons: "I profoundly regret and apologise for the inconvenience and worries that have been caused to millions of families who receive child benefit."
Aides insisted he had said sorry before, expressing regret as Chancellor for a paltry 75p-a-week rise in the state pension and his differences with Tony Blair. But he has never made such a full apology in the Commons.
Labour MPs rallied behind Mr Brown at Prime Minister's Questions but in private, normally loyal backbenchers expressed fears that the label of "incompetence" may stick permanently to the Brown Government. Ministers are already braced for another damaging scandal. A report by the National Audit Office (NAO) tomorrow will criticise the rushed sale of the Ministry of Defence's research arm QinetiQ. The Commons Public Accounts Committee, which will launch its own inquiry, is expected to point finger at Mr Brown for ordering the sell-off.
The "blame game" over the HMRC's loss of the records of 7.25 million families claiming child benefit intensified yesterday.
The Government insisted that the two computer discs went missing in the post because a staff member at the HMRC did not follow proper procedures. But the Tories sought to put Mr Brown in the frame, pointing out that as Chancellor he pushed through the 2004 merger of the Inland Revenue and Customs and Excise and then cut 25,000 jobs. It blamed the problems on "systemic failure" at HMRC, including a string of security breaches, for which ministers should be held responsible.
The Tories claimed last night that new evidence showed the decision to send the data to the NAO was taken by senior HMRC officials rather than the junior employee blamed by the Government. Sir John Bourn, the head of the NAO, may publish emails to prove this.
David Cameron told Mr Brown in the Commons that millions of people were now "worrying about the safety of their bank accounts and the security of their family details" and "angry that the Government has failed in its first duty to protect the public".
The Tory leader said the public would find it "bizarre" that the Government was not willing to "stop and think" about the introduction of ID cards in the wake of the blunder. "Won't they see a prime minister who tries to control everything but actually can't run anything?" he asked.
Despite the crisis, Mr Brown reassured Labour MPs by putting in a stronger Commons performance than in recent weeks. He hit back at Mr Cameron by saying the Tory manifesto he wrote for the last election called for even deeper cuts in the HMRC budget.
Karen Buck, a former Labour minister who has endorsed ID cards, admitted she was "wobbling" and suggested a pause was needed before going ahead with it. "The real fallout from this has got to be confidence," she said.
But Downing Street argued that ID cards would help to protect against fraud. Mr Brown's official spokesman said: "In the design process, they are factoring in security measures so biometrics, such as fingerprints, will link a person securely and reliably to his or her unique identity, which means it should be much more difficult to misuse another person's identity, even if the full details are known of his or her biographical information."
Alistair Darling, the Chancellor, who admitted publicly that his confidence had been shaken by the affair, met the Metropolitan Police last night for a progress report on their investigation into the lost discs.Reuse content