Our tax service, HMRC, put 25 million people's details on CD, gave it to a delivery company, who lost it, or delivered it to someone who lost it. No security involved, just CDs in an envelope.
They are trying to blame it on the recent merger of Customs & Excise (big, relatively efficient for the government) and Inland Revenue (way too big, way too inefficient). The merger was one of these things announced and rammed through for political ends, integration seems to have been simply carried out by changing the signs on buildings and transferring managers to the other part of HMRC where they had no idea what they were doing.
This is a smokescreen it is just a fuckup. I doubt the CDs will ever be used for anything nefarious, they will be lost in a desk somewhere.