The government has announced there will be new tougher sanctions under the Data Protection Act for the most serious breaches. The proposed new sanctions may include prison sentences for officials.

In an  update to MPs yesterday on Her Majesty’s Revenue & Customs’ (HMRC) data loss of 25m child benefit records, Chancellor Alistair Darling said: "There will now also be new sanctions under the Data Protection Act for the most serious breaches of its principles.

"These will take account of the need not only to provide high levels of data security but also to ensure that sensible data sharing practices can be conducted with legal certainty. We will consult early in the New Year on how this can best be done."