The government will reveal within two weeks how many taxpayers' records were deleted because of a software error at the Inland Revenue, according to a spokesman in the House of Lords.

Lord McIntosh of Haringey said the error that caused the deletions has been corrected and claimed it affected 'a small minority' of taxpayers (Computing, 4 November).

But Tory peer Baroness Noakes alleged 'perhaps hundreds of thousands of taxpayers' have lost out on refunds because of the deletion of their records.

And Liberal Democrat Lord Newby warned that the plan to cut 16,000 Revenue staff depended on realising the benefits of IT and demanded an assurance that, given its 'patchy' track record, customer service would not suffer.

The Commons Treasury committee report on the merger of the Revenue and HM Customs & Excise (HMCE), published last week, also emphasised that tax collection and customer service must remain the top priority as the unification plan goes ahead.

David Varney, newly-appoined head of HM Revenue & Customs, told the committee he is working hard to bring the IT systems into 'some coherence'.

'We have the Aspire contract at the Inland Revenue with Capgemini, and in HMCE we have the deal with Fujitsu. I am hopeful that by the end of this year we will start the process of bringing them together,' he said.

Varney pointed to the appointment of an experienced chief information office - Steve Lamey, from gas firm BG Group.

'I think what we are brining in is expertise of somebody who has a track record of managing change in IT and delivering business benefits,' said Varney.

'What differentiates successful oil companies that use technology and those that are unsuccessful is essentially not the technology but the people and the attitudes,' he said.

But the Chartered Institute of Taxation told the committee of 'some scepticism that staff reductions of the order outlined will result from using new technology, merging related functions and changing working practices without affecting operational efficiency and customer service'.