Shamed revenue chief given new job with Civil Service

The former head of Her Majesty's Revenue and Customs, who resigned over the loss of government child benefit data, has been given a new job advising the head of the Civil Service.

Paul Gray gave up his 165,000-a-year job as head of the tax collection agency last month after it emerged that two discs containing the financial details of 25 million people had been lost in the post. He has started work on a special project and now reports to his former boss, the Cabinet Secretary Gus O'Donnell.

The Cabinet Office said that, despite his resignation, Mr Gray, 59, remained a senior civil servant "for contractual reasons" and would carry out a "short piece of work" before leaving at the end of this month.

Vince Cable, the acting Liberal Democrat leader, said the decision to keep Mr Gray on made "a mockery of the act of resignation".

He added: "This takes no account at all of the signal this is sending. When somebody presides over an almighty mess, you punish them by getting them to resign for a week and then sign them on again."

John McFall, chairman of the all-party Commons Treasury committee, told Channel 4 News: "On the day of the announcement, he resigned forthwith and it seemed the courageous thing to do. If it is the case that he is working in the Cabinet Office, he has not fallen on his sword he has fallen on a feather bed."

In his resignation statement, Mr Gray said he was stepping down "as a result of a substantial operational failure in the department".

The Cabinet Office said: "When he resigned ... Paul Gray's period of notice meant he would be paid until the end of the year. As a result, he could receive payment for no work, or receive payment for doing some work. It was thought to be in the public interest that he did some work."