From laughing stock to headless chicken in just twelve days. Twenty five million at risk of identity theft and counting. The UK government disgorges its citizens' identity details like a Niagara Falls in spate.

Two weeks ago the HM Revenue & Customs transferred CDs by its courier service to Standard Life's pension department. They never arrived and 15,000 peoples' identities were put at risk of theft. The CDs were not encrypted and not delivered securely.

It transpired that this was no isolated case of unencrypted CD transfer by the Revenue. Every month, unencrypted confidential ID and financial data on hundreds of thousands of people is couriered around the country by HMRC.

At the time an HMRC statement said: "We have ... reviewed our arrangements and introduced safeguards to prevent this happening in future."

Cue derisive and hotly sarcastic laughter.

Today the Chancellor revealed that the same hapless service has mislaid two more CDs in exactly the same way, unencrypted data transfer by the internal courier service, and an unbelievable 10 million adults' and 15 million childrens' identity details, including much bank account information, has simply gone missing.

It is fatuous behaviour by an organisation that has no reliable policy for sensitive data transfer and no ability to react quickly. Twelve days ago it 'introduced safeguards to prevent this happening in future' and then promptly did it again, but affecting millions and millions more people. Fit for purpose? You tell me.

Every family in the land will have a member affected by this abysmal example of the government's stewardship of its citizens' data.

There must be an immediate order sent to every government department and office in the UK, saying not one piece of digitally stored information about citizens should leave their buildings unless it is encrypted.

Be it on USB stick, laptop computer, CD or inside a data packet travelling by LAN or WAN it must be encrypted - at once. The use of couriers to transfer unencrypted CDs containing citizens' identity information should be made a crime punishable by instant dismissal and fines.

Nothing else makes sense and any other response is simply not proportionate to the grotesque insult visited on us by this palpably stupid and incompetent department of state.

PS. The hapless HMRC was formed by combining two other departments of the Civil Service: the Inland Revenue and Her Majesty's Customs in April 2005. It was told to get rid of 25,000 of its 94,000 staff and to improve its service. This remarkably stupid pair of conflicting demands were imposed on it by one Gordon Brown, then the Chancellor of the Exchequer, and now a man who sat miserably by the side of Alistair Darling as the scale of the disaster perpetrated by the organisation he set up became clear.