Jan. 3 (Bloomberg) -- The U.K. should introduce new criminal penalties for breaches of data privacy after the loss of personal records of almost half the population, a panel of lawmakers said.

The data-protection regulator must get new powers to check on government data systems and there should be laws making significant security breaches a criminal offense, Parliament's Justice Committee said in a report published today.

Tax authorities on Nov. 20 admitted losing two computer disks containing personal details of almost every family claiming child-benefit payments. The loss, the largest of its kind in U.K. history, lays open 25 million people to the risk of identity fraud and theft. A month later, Transport Secretary Ruth Kelly said that a U.S. subcontractor had lost records of 3 million who took driving tests since 2004.

``The scale of the data loss by government bodies and contractors is truly shocking but the evidence we have had points to further hidden problems,'' Justice Committee Chairman Alan Beith said in an e-mailed statement. ``It is frankly incredible'' that the measures introduced since the missing tax disks were made public ``were not already standard procedure.''

The error has led to a slump in support for Prime Minister Gordon Brown, with many voters questioning the competence of his government. A YouGov Plc poll found 60 percent of people were ``dissatisfied'' with Brown as prime minister compared with 27 percent in July and 48 percent in October. YouGov sampled 2,060 voters from Dec. 17-19.

`Extremely Concerned'

Brown and his Chancellor of the Exchequer Alistair Darling, whose Treasury oversees the tax service, say security procedures were breached when the data was downloaded and sent by courier to the National Audit Office. They say there was no ``systemic'' failure, as suggested by the Conservative opposition.

The Justice Committee said it is ``extremely concerned'' about the risk of future data breaches. It called for new rules that would require companies to report losses of data and laws that would make significant security breaches, where reckless or repeated, a criminal offense.

Government proposals to let Information Commissioner Richard Thomas carry out spot checks on government departments should be enacted without delay, the panel said.

To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net.

Last Updated: January 2, 2008 19:02 EST