Okay, it´s a catastrophy when you lose 2 CD with data, but it´s a pattern when you lose CD with sensible data on a regular basis. 25 million lost records with bank accounts.. You can only hope that the responsible people were aware of public key cryptography.But … wait … i assume encrypting the data would cost extra at EDS (like desensitizing):

Sir John Bourn's briefing adds that the reason given in the email - which was copied to an HMRC official at assistant director level - was that desensitising the data would require an extra payment to EDS as it fell outside the scope of EDS's data management contract.

And it seems to be a common pattern. The Daily Mail writes in Now two MORE discs containing personal data go missing at bungling Ministry of Mayhem:

The news comes as it was revealed last night that bungling officials who lost the personal and banking details of everyone who receives child benefit were guilty of more than 2,100 security breaches last year - dragging Gordon Brown to the centre of the shambles.

Yet another reason to deny authorities the collection of data. It doesn´t look like they can keep the data for themself …