Hewlett Packard, the prime contractor for the Department of Works and Pensions (DWP) plans to move some 200 ICT support jobs from Newcastle, Sheffield and Lytham St Annes to India, pending approval from ministers.
But a group of MPs are campaigning against this move, claiming that moving millions of people's personal data to another country could pose a huge potential security threat.
They claimed they were "alarmed at the increased security risks of storing millions of live personal data files, including national insurance numbers, offshore".
Also the move had strong "ethical implications" in exploiting lower-paid foreign workers. They stated that savings would be "exceeded by lost tax revenues and increased payment benefits".
Leading the campaign is North Tyneside MP Mary Glindon, who believes that once the information is allowed to go overseas, the Government will lose control of it.
She said: "One of the issues is the loss of 200 jobs in Tyneside, but the other key issue is the security of sensitive information, including NI numbers, zipping back and forth between Britain and India."
DWP minister Chris Grayling claimed that a review is ongoing about the possibility of the plans coming to fruition.
He said: "All aspects of security, including access to any data that may be required, will be part of this review.
"Proposed offshore activities need to gain a formal approval against stringent DWP, CESG - the -information assurance arm of GCHQ - and Cabinet Office requirements before being permitted."
A decision is expected to be made by the end of the year.
Read more on the story (Guardian)
Learn ways to fight identity theft (FindLaw)
Find local specialist solicitors throughout the UK (FindLaw)