This morning a firm called The Consulting Association was shut down for gross breaches of the Data Protection Act.

The Information Commissioner has alleged that over 40 multinational construction firms, including Taylor Woodrow, Laing O'Rourke, Costain and Balfour Beatty, have been paying the Worcestershire-based company for years to vet job applicants in terms of their union affiliations, relationships, and other information, such as attitude to work.

While vetting is commonplace and not illegal, holding a secret database is; crucially, this prevents the people concerned from examining data and establishing whether they are correct, relevant, or up to date (which are all legal requirements for such information).

People within the construction industry had long suspected the existence of a 'blacklist', but until now it had been difficult to substantiate.

This got me thinking about a range of issues that I'd like to share with you, as they will impact on the services and outsourcing sectors over the next few years as Whitehall strips away legal protections against the trade in the new currency of the 21st century: your and my private data.

In a spirit of openness and full disclosure, I'm going to share some private data with you: my name appears on a database of people who have been detained and questioned under the Prevention of Terrorism Act (PoTA). The reason is that, one summer's day, I took a photograph of a friend at Brighton railway station.

The national-security-threatening action of a smartly-dressed, middle-aged man from Folkestone taking a picture of a friend at a coffee stand led to my camera being seized by police, an intrusive search of my person and belongings, and my name being added to the police's database of people apprehended under 2005 terrorist legislation.

It's likely that, since then, my career, finances, communications, credit history, and so forth, have been investigated and logged – and I say this as a journalist who uses this forum to discuss India, China, Vietnam, and the Middle East.

Context, however, is the thing lacking in any ill-considered scrabble for data, and technology cannot fill that hole – it can only make it deeper.

Once all these connections have been made a misleading or inaccurate picture can be created about any person, by anyone looking for specific patterns of behaviour.

And believe me, people are looking. However, what no one considers is that the act of looking is itself an inherited pattern of behaviour, a meme, from McCarthyism and the Cold War, but we never learn the signal lessons of history.

Indeed, sometimes the quest to source such information – or its gathering – is a matter of deep-seated prejudice. Data on the Consulting Association's books, for example, included comments about people being Irish, trouble-makers, ex-Army or former shop stewards.

I am far from alone in having been detained under questionable circumstances, but data from such cases remain on government databases. The future implications of that remain unclear for me and, perhaps, millions of others.

In terms of the Consulting Association in the private sector, the implications have yet to be established for anyone about whom inaccurate, out-of-date or irrelevant information may have been used to deny them employment. Legal actions may result from the data's publication later this month – both against the firm that gathered the information and the firms that paid for it.

Now, the reason for me sharing all this with you, voluntarily and candidly, is to demonstrate that vast amounts of intrusive, out-of-date, irrelevant, inaccurate, prejudiced and potentially damaging information will be gathered and traded by organisations about 'private' citizens, given even the slightest opportunity to do so. Any avenue will do, as eventually all lead to the same place once data-sharing restrictions are taken down within Whitehall.

The Government would like to share data across as many departments as possible, and also have access to phone and email records and your and my websurfing habits.

In such a climate, who vets the databases? And who could hope to follow the trail of data about themselves across a sprawl of government departments and their myriad connections with the private sector?

The terrorist at the coffee stand is you or me, in the Government's eyes – and I speak from personal experience.

The thing is, I'm not convinced that the Government really believes that. There are always paying customers for this type of information, and it matters nothing to some that it may be gathered or held illegally, or be out of date, inaccurate, or irrelevant in law. This morning's closure of the Consulting Association is a prime example: once such data exist, someone will pay for them and want to share them to their own advantage.

Trade Secretary Peter Mandelson, once he'd wiped himself down from a faceful of green custard this morning (doubtless now on YouTube), said that he will investigate whether such practices are more widespread

Of course they are, and the Government is in the vanguard. It simply wants to remove all the legal obstacles to their wider usage and commercial exploitation.

Both my detention and that of thousands of others occurred soon after the PoTA was passed, demonstrating that as soon as such legislation becomes law, organisations champ at the bit to use it excessively and, often, inappropriately.

In these days of targets and endless bureaucracy, we should also factor in incompetence, corruption, and the need to be seen to do something. Those are elements just as dangerous as armed zealots, because they are far more prevalent but equally destructive to people's lives.

Those are the views of many leading doctors, who are also concerned about the threats to data protection that seem to be emerging from every quarter as sharing across the public sector becomes seemingly unstoppable.

In a letter to the Daily Telegraph this week, a group of health professionals said: “Both common law and the Data Protection Act (DPA) 1998 enshrine an individual's right to have the data stored about them protected. The DPA in particular includes the principles that data must be processed for limited purposes, be adequate, relevant and not excessive, and not kept longer than necessary.

“The principles of the Data Protection Act 1998 are fundamental to the functioning of the National Health Service. We are therefore extremely concerned that the Coroners and Justice Bill, as currently drafted, allows the override of these principles, and rather than protecting confidentiality, permits an unjustifiable level of sharing of confidential person-identifiable health data.”

The letter was signed by, among others, Dr Hamish Meldrum, chairman of Council, British Medical Association; John Black, president, Royal College of Surgeons of England, and Dr Peter Carter, chief executive and general secretary, Royal College of Nursing.

Security has always been about several things, among them confidentiality, integrity and limited availability, and data protection partly concerns individuals' legal recourse should those elements be breached.

We are moving, however, into a very different world and a data economy in which the Government wishes to be the largest player.

As outsourcing professionals we need to consider all of this very carefully as it is our enterprise that will be called upon to make the Government's proposals a reality, and that spells controversy on a scale not witnessed since the Washington of the 1950s.

The difference is we now have the technological means to make it impossible to undo the damage to a nation's peace of mind, or to many innocent people's lives.

When a figure such as Dame Stella Rimington, former head of MI5, accuses the Government of exploiting people’s fear of terrorism to restrict civil rights we should consider that not everything is an opportunity for new business.