The extraordinary news of HM Revenue and Customs’ (HMRC) spectacularly incompetent loss of personal details – addresses, national insurance numbers, child benefit reference numbers and the banking details of 25 million individuals – has implications way beyond the resignation of the head of HMRC and the immediate breach by the Government of its duty to protect its citizens.

In first place is the consideration that the Government’s ID Card scheme is now fatally holed beneath the waterline. How can any Citizen trust for a nanosecond that his or her personal data will be kept secure by this shambles that calls itself a Government? George Osbourne homed in on this in his reply to the Chancellor’s statement and the Tories should now pick up this point to renew the assault on this repugnant scheme which is going to do nothing more than create more opportunities for identity fraud than ever before if this is how they go on.

Secondly, it reveals, as Mr. Cable for the LibDems observed, that the Treasury has become the equal at least of the Home Office for lacking ‘fitness for purpose’ and for dysfunctionality. And let us just remind ourselves who it is who has been in charge of this shower for the last ten years: none other then the Prime Minister himself.

Alistair Darling may be the one holding the can right at this very moment but it is Brown himself who stands accused of rank incompetence for failing to ensure that the department under his control from 1997-2007 was carrying out properly the most basic functions of its duty to the public. No wonder the Prime Minister was sitting next to his Chancellor this afternoon looking very worried indeed. He knows only too well that this is a blunder of disgraceful proportions and that it is bound to redound to his discredit. He will also have noted the lacklustre performance of his Chancellor.

One hesitates to make predictions in the complex business of politics. Harold Macmillan’s bon mots about ‘Events, dear boy, events’ could strike at any moment and Brown could find himself walking on water once more. But, as I observed on Saturday, this Government has begun to have the rank smell of death about it much as that of John Major had after ‘Black Wednesday’ and the collapse of our membership of the ERM whereupon it was then buffeted on a weekly and sometimes daily basis by cock-ups such as this.

Watching the Labour Front Bench this afternoon was instructive: they each looked as though they would have infinitely preferred to be elsewhere. And those Labour Backbenchers who had the stomach to turn up for the Chancellor’s statement (there were strikingly empty benches on the Government side) were notably silent and dismayed. Labour MPs must be sick to their stomachs tonight as they contemplate the train wreck that Gordon Brown’s government has become. And the rest of us will be enjoying the fact that more than three hundred of that particular class of Ass signed their names to his nomination papers: no way out there either.

This particular scandal will have some legs yet and it may well be that I shall return to it ere it is done. But for the moment half the nation (yes, HALF THE NATION!) is going to be wondering tonight if his or her bank account is about to be plundered. That surely is going to be highly corrosive of Labour’s standing in the polls.

The other half of the nation will be sitting there wondering just how incompetent this shower can get and, if nobody in Government resigns over this disgraceful affair, what sort of foul-up has to occur before someone finally gets a grip and resigns.

The smell of suppuration wafting around the body of Brown’s apology for a government just got perceptibly stronger.