So the records of three million UK driving test applicants go missing in Iowa. These things happen. For the government of Britain, with unprecedented and unparalleled ambitions to gather and retain personal information, these things happen with increasing, if predictable, frequency.

Perhaps it concerns you. If not, it should, at least according to the government that keeps on losing the stuff. When not mislaying 25 million child benefit records, or information on three million people with hopes of mastering driving theory, ministers and civil servants are keen to remind us of the need for vigilance. Identity theft is a large and growing problem, they say. Larger after their recent efforts, perhaps, than before.

Leave it to Ruth Kelly, Westminster Transport Secretary, to put minds at rest. The three million records missing from a "secure" facility maintained by Pearson Driving Assessments, a "private contractor", contained names, home addresses, phone numbers and e-mail addresses, but nothing - I paraphrase - important.

The missing hard drive was not, this time, stuffed with bank, national insurance, or credit card numbers. Three million applicants are perfectly safe. All they have lost is a bit more privacy. In return, when gratitude subsides, they are granted two or three questions.

Nothing complicated. What was my information doing in Iowa, in a foreign country? Who said that my name and phone number could be handed over to a third party, for private gain? Who said, and when, that privacy, far less confidentiality, had ceased to matter in Britain?

To be fair to the government, precious few of the three million people affected will actually have such questions on their minds. Reasonably enough, they are more concerned with the possibility of being robbed. It is difficult to picture the driving theory test as a civil liberties issue.

"Data loss" - or information theft - is not, in any case, an exclusive preserve of government. According to a poll of information security professionals with large British companies conducted by Cisco Systems earlier this year, information-pilfering has replaced computer viruses as the "number one concern", followed by regulatory compliance, or the lack of compliance.

We should worry about that, too, if we have a moment to spare after spending hours online surrendering our credit card numbers for the Christmas plunder. Unlike certain government explanations, it stands to reason. If our society depends on computers for its wellbeing and security, personal and public, then it depends on the security of those computers. But if no system is perfect, how - the avoidance of astounding negligence aside - do you keep imperfections to a minimum?

The words "eggs", "basket", "all" and "your" spring to mind. Like keeping your life savings under the mattress, keeping everything that matters to people and their world in fallible pieces of hard or software seems equally ill-advised. But perhaps, given the complexities of modern life, we have no choice about that. Perhaps.

We do have a choice, though, when it comes to the wisdom of retaining everything in a single virtual basket, privacy and other rights included, and we have a choice when it comes to allowing a government to create that basket. We have further choices when that government fails to explain why this is necessary and desirable rather than risky and deeply dangerous. Finally, we have a choice when it comes to paying attention while all this is going on.

After the child benefit fiasco there was a widespread assumption that the government would "think again" over a national identity card. The existence of a sufficient supply of gall was in question. It was almost taken for granted that humbled ministers would understand "A therefore B". If you cannot manage one set of records, therefore you cannot hope to manage one giant, interlaced system containing all records.

But not a bit of it. The ID card will proceed, they said, after the usual "review". Britain, almost as one, merely shrugged. We are forever disgorging passwords into a phone-line, forever having our movements tracked by CCTV, forever disclosing our most intimate information to strangers "for security reasons". A little bit more couldn't hurt, not if we're helping to fight terrorism. Or benefit fraud. Or illegal immigration. Or - what's this week's horror?

The estimable no2id campaign will walk you through the arguments. Huge costs, reduced liberty, unproven technology, lifelong surveillance, inevitable errors, unchecked executive power and a "security system" that will, in fact, create threats: your card has been marked. If that doesn't bother you - you've done nothing wrong, so you won't mind being treated as a criminal, will you? - the campaign offers a new phrase for the new Orwellian age. The "database state", they call it: "the tendency to try to use computers to manage society by watching people". Britain's plans are more advanced, and more extravagant, than any totalitarian fantasy: we are world leaders in this somnambulist Olympics.

First you get your National Identity Register number to match your ID card. "Information sharing" between government departments follows. Thence - all at the planning stage, according to campaigners - ID interrogation centres, e-passports, e-borders, and Automatic Number Plate Recognition logging all car journeys.

Your entitlement to, and use of, public services would be tracked via your ID card. Your child would be biometrically surveyed (finger- printed and more) in school. The "ContactPoint" database would collect information on every child. The national DNA database, already the biggest in the world, would become universal. Police would acquire new powers to check identities. And employers would grow ever more patriotically vigilant and assertive.

Paranoid fantasies, no doubt. Or necessary measures in dangerous times, entirely for our own good. The universal system would never fail - the IT contractors would never allow it - and never be abused by a nosy clerk or a government minister.

No-one would then dream of sticking 25 million family data sets into an insecure mail system, or hand over three million names to some nice folk in Iowa. Since we would all be in this together, privacy and the like would begin to seem an antique, certainly inconvenient, concept.

I ask myself three things. First, am I more worried by the thought that government will make its usual unholy botch of these grandiose schemes, or that this time, finally, it will get what it wants? Which would be worse? All I know is that, either way, I am not worrying unduly. The grand design, the linkage of disparate systems, is at the heart of the threat to a great many of the things we take for granted.

That said, I ask myself if so many of us went through poll tax non-payment simply to tolerate this. There is an equivalence. The poll tax was a tax on existence, you will recall. The fact of existing was the criterion. So how does every detail of my existence stand in the scales? To quote the title of that old play, entirely out of context, who's life is it anyway?

So the final question. When did we lose sight of the essential relationship between the state and the individual, the one that separates democracy from the less agreeable systems? Suddenly government (and every other powerful organisation) behaves as though it has a right to demand and receive information, and that this right is beyond dispute.

If that's the game, we need to reclaim a six-word sentence: "Who wants to know, and why?"