But a spokeswoman for the Department of Work and Pensions said the device contained user names and passwords for testing an old version of the system, and all the information was encrypted.
Encrypted? With the total ineptitude of this government odds are your encryption is so basic that a 5 year old could crack it. Besides, if the key gives login details that would bypass the encryption anyway as you would be LOGGED INTO THE BLEEDIN' SYSTEM you gormless tossmonger.
I'm not sure I agree with the Lib Dems wanting to ban the use of USB sticks as they do have their uses, but if you are going to use them then at least make sure that the only ones allowed to be used are secure like the Iron Key:
http://www.reghardware.co.uk/2007/09/05/review_ironkey/Combine that with PGP encryption before the data is transferred to the key and if someone loses it it will be beyond the ability of most people to access the data on it.
