If it went ahead, the move would affect all sectors including financial services as problems are occurring in all areas, said MP.

The committee also said the Information Commissioner's Office (ICO) should also have a robust system of escalating fines at its disposal to sanction those who fail to report, prepare for or learn from data breaches.

The Committee's recent inquiry into cyber-security was triggered by a series of data breaches at Talk Talk, but the Committee has warned that the problem is significant, growing, and affects all sectors with an on-line platform or service. Ninety per cent of large organisations have reportedly experienced a security breach, and 25% of companies experience a cyber-breach at least once a month.

Latest research from the ICO shows that the health sector has the most data breaches, followed by local government. Over 40% are caused by employees, contractors and third party suppliers, and half of these are accidental, says the report.

The Committee also focused on strengthening consumer rights and awareness of scams, implemented and enforced by a series of new requirements and sanctions on company directors and chief executives, including:

The Committee says:

• Companies must make it much easier to verify if communications, whether online or by telephone, are genuine. The ICO’s system of sanctions should include fines for companies that fail to do this

• It should be easier for victims of a data breach to claim compensation

• It is not enough for companies to say they weren’t aware. Breaches are common, and all companies need to plan and test for that eventuality

• Further, they need to demonstrate they have identified and addressed the weaknesses that have led to any data breaches

• The vulnerability of the massive new data pools that will be created by the Investigatory Powers Bill needs to be urgently addressed by Government

• Good cyber practice will need to evolve and develop: this is essential to maintain consumer confidence and Britain’s place as the top internet economy in the G20

• There needs to be a step change in consumer awareness of on-line and telephone scams, and the Government should initiate a public awareness-raising campaign, on a par with its campaign to promote smoke alarm testing

Jesse Norman MP, committee chair, said: “Cyber-security is a critical issue for consumer confidence, and increasingly important for the UK economy. Companies must have robust strategies and processes in place, backed by adequate resources and clear lines of accountability, to stay one step ahead in a sophisticated and rapidly evolving environment.

“Failure to prepare for or learn from cyber-attacks, and failure to inform and protect consumers, must draw sanctions serious enough to act as a real incentive and deterrent."