It appears that a junior official in Tyne and Wear was asked for details of all child benefit (the old Family Allowance) recipients by the National Audit office and sent them via TNT, unregistered, on two CDs. This was not the first time this has been done apparently only this time they failed to arrive. The Chancellor says that although he has known about this since the 10th of Nov he only got round to asking the Met to investigate on the 16th. He also says that the two CDs are "password protected". The details on them are the names and addresses of every qualifying child (ie every child under the age of 16 in the UK) as well as the name, benefit number National insurance number and full bank account details of the parents or guardians who receive the money (ie the bank details and Nat Ins number, address etc of some 8.5 million people)
And they want us to trust them with ID card information on computers. I wouldn't trust them with looking after a whelk stall.