“Woefully inadequate”, “a muddle-through ethos”, “a lack of awareness” - just some of the phrases used in scathing reports to describe data protection practices at the HM Revenue and Customs (HMRC).

The inquiries followed Britain’s biggest data loss scandal, when two discs containing child benefit records, including names, addresses and bank details, of some 25 million people, went missing after being put in the post by a junior employee.

The reports concluded that it wasn’t individuals who were to blame - some 30 were officials played some role in events leading to the loss of the discs - but institutional and systematic failures at Britain’s tax authority.

But the HMRC is not alone in such security breaches. A separate report into a stolen laptop containing the details of 600,000 potential recruits revealed similar failings at the Ministry of Defence. In all, four MoD computers had been stolen since 2004 and the report said the MoD was probably in breach of several principles set out in the Data Protection Act.

It concluded that a “serious security event of this nature was inevitable”. It added: “Generally, there is little awareness of the current, real, threat to information, and hence to the Department’s ability to deliver and support operational capability. Consequently, there can be little assurance that information is being effectively protected.”

The reports come days after a computer containing restricted information was stolen from the office of cabinet minister Hazel Blears and the government admitted that senior intelligence official had left a folder with top secret documents on a commuter train.

Unsurprisingly, the Conservatives have seized on the revelations as evidence of incompetence that showed the government could not be trusted with the public’s personal data. Shadow Chancellor George Osborne said there had been 12 “major” security breaches since the HMRC scandal.

“With a record like that, how on earth can they even consider proceeding with plans for a compulsory ID card for every citizen of the country,” Osborne told parliament.

Chancellor Alistair Darling and other ministers insist that lessons had been learned. But two further reports on data security for the Cabinet Office said the government had to adapt to a rapidly changing environment where masses of electronic data had to be stored and shared, and more still needed to be done.

“Looking forward, the challenges in this area are going to get harder rather than easier,” one said.

The government say better use of information means better services. But critics say
security breaches are not a price worth paying.

In light of the recent scandals, do you trust the government with your personal details?

By Francesca Lagerberg, head of the national tax office, Grant Thornton

Most Budgets have all the attraction of being slapped in the face with a wet kipper and sadly this one is unlikely to reverse the trend. As expected, from today up goes the cost of booze (4p on a pint) and fags (11p on a packet). Also for those who like driving larger less-green new cars there is a “showroom” tax coming in from 2009 that could cost them around 950 pounds.

However, for the entrepreneur there was a little cheer. After strong representations from business, Chancellor Alistair Darling has deferred the “income shifting” rules that were due to start from this April. These were a direct attack on family-owned businesses that include lower tax paying family members who take out dividends or profits but make a less significant contribution to the business. A case last year (Jones v Garnett) went against the government and it was looking to legislate to get the result it wanted. The proposals were wide-ranging and ill-targeted. A deferral will hopefully allow time to revisit this whole approach.

The working family got several name-checks in the Budget speech and this broadly amounts to an increase in child benefit (20 pounds per week for the first child) and the child element of child tax credit, but this will not take effect until April 2009.

There was no further change to the capital gains tax (CGT) regime so that from April 6 all individuals will be paying at a flat rate of 18 percent with the only hope of reducing the charge being a special entrepreneurs’ relief that has stringent qualifying conditions, but may help the smaller business to take their charge down to an effective rate of 10 percent. However, some others clearly benefit under the new regime. For example, those looking to sell a buy-to-let property after April will find that the new rules help them as the best tax rate they would get under the existing legislation would be 24 percent.

For non-domiciled individuals, the Chancellor provided further details on the radical changes taking effect from April 6. If they want to continue to get the tax advantages of being non-domiciled in the UK after then they will have to pay 30,000 pounds for the privilege once they are resident here for seven out of the past 10 years. However, for those who would not remotely be able to pay such a high levy remitting just small amounts of foreign income (2,000 pounds) will not be caught. This is a slight increase on the original 1,000 pound proposal. There is also a new test of where you were at midnight to work out what days you were really present in the UK, which may be more useful to internationally mobile workers than the rules we heard of last October at the pre-Budget report.

So, overall Darling’s first Budget was short on drama, but long on minor detail. A massive 207 pages of back-up notes support the Budget Red Book. For most people this event will provide little to cheer, but equally little to passionately dislike.