It's not what you know, it's who else knows it too

The privacy issue flared briefly when Google Street View arrived in Britain a fortnight ago. In among the blushes over illicit stolen kisses and the luckless bloke caught urinating, there was a flurry of genuine unease about abusive men snooping on fleeing partners or the government peering through our windows.

Every breath you take Every move you make Every bond you break Every step you take I'll be watching you What was once a wistful lament for lost love now reads like an anthem for the surveillance society. The problem is that not enough of us are singing it. And many of those who do are dismissed as paranoid or geeks.

By contrast, the revelation this week that the UK government is party to talks about installing a "communication box" in all new cars, capable of tracking drivers right across Europe, barely made the news. This idea will be sold to us as "a good thing", you can depend on it. It could mean an end to those frustrating waits at traffic lights when there's nothing coming the other way. It could divert you around traffic jams and reserve you a parking space at your destination. The big "but" is that it will enable anyone with access to the data to trace your car within one metre at any time, which, as the EU Data Protection Supervisor conceded recently, will have a "great impact on rights to privacy and data".

In Britain, many campaigners would argue that privacy is already dying or dead. An excellent House of Lords report in February warned that the surveillance of the everyday activities of innocent individuals had become "pervasive" and "routine". Last week Database State, a report for the Joseph Rowntree Trust, concluded that of 46 British public sector databases, "only six are found to have a proper legal basis for any privacy intrusions and are proportionate and necessary in a democratic society".

It gets worse. While Orwell's Winston Smith had only one Big Brother looking over his shoulder, we have several. As the government increasingly pools information about our health, education and contacts with police and social services (enabling officials to draw sometimes erroneous and damaging conclusions), a parallel process is taking place in what used to be known as our "private transactions". Every time we fill our supermarket trolleys or embark on a shopping spree, information from loyalty cards is stored to help retailers target and tempt us more effectively. Each time we surf the net, we leave a trail of cookie crumbs, enabling Google, whose declared aim is to "organise the world's information", to build a detailed picture of each of us. Picasa, Google's software application for organising and editing digital photos, is developing clever image matching technology capable of identifying, for example, the designer label on your handbag: commercially useful info for the retailer hoping to sell you another.

Datamining companies will be delighted to sell embarrassing pictures of your children's gap-year antics at Australian barbecues to their future would-be employers.

Interaction between public and private databases merely exacerbates the problem, with commercial operators able to buy certain categories of government data, while banks, shops, telephone companies and internet service providers are liable to be instructed to hand over personal information to a range of public authorities. In 2007 alone, police and public officials requested details of more than 500,000 telephone calls and internet communications.

Don't be fooled by the government's apparent U-turn on the Coroners' Bill. Last month Jack Straw scrapped the proposal to allow patients' medical and DNA records to be shared between the police, other bodies and even foreign governments, following the Scottish Government's decision to withdraw support. The issue hasn't gone away. The UK Government still plans a more limited sharing exercise which, judging from the level of major leaks and misplaced computer disks, is tantamount to advertising your embarrassing ailments on a billboard. In the wrong hands, the same information could result in you being denied life insurance or a mortgage.

A world record number of CCTV cameras, Automatic Number Plate Recognition, the use of the Regulation of Investigatory Powers Act by local councils to target littering and dog fouling have combined to make Britain the least private country in the world.

These gross intrusions are sold to us as necessary to prevent terrorism and make life more convenient. Data-sharing obviates the need for us to provide different government agencies with identical information. We'll no longer face the heartbreak of communications addressed to dead relatives. At least, that's the theory. We should be asking more about the price, not only to the Treasury but to our privacy.

The Scottish Government appears to be on the side of the angels in this debate, having rejected the whole notion of ID cards and a huge police DNA database. But beware "function creep": the growing exploitation of increasingly overlapping databases that are designed to protect us but are used to spy on us. Could Scotland's beloved pensioners' free bus pass become a wolf in sheep's clothing, an ID card through the back door? There's already talk of "entitlement cards", based on a personally unique number for use in communicating with all state agencies.

Any changes would be incremental but if such cards were to incorporate biometric information to prevent fraud and a Radio Frequency Identification tag to help transport planning, and it then became illegal not to carry it (as in Greece and Argentina), you have a perfect Big Brother scenario. Add a few details about your "private" life from a datamining company, and Big Brother could look right into your mind.

This takes us right back to Orwell's 1984 when "it was terribly dangerous to let your thoughts wander when you were in any public place or within range of a telescreen. The smallest thing could give you away. A nervous tic, an unconscious look of anxiety, a habit of muttering to yourself - anything that carried with it the suggestion of abnormality, of having something to hide. In any case, to wear an improper expression on your face was itself a punishable offence. There was even a word for it in Newspeak: facecrime "