Formerly a colleague of Cherie Blair at Matrix Chambers, specialising in human rights law, Mr Justice Bean demonstrated his judicial independence last week with some harsh words for Tony Blair’s government. Ruling that the Department for Work and Pensions had misled the public over the safety of occupational pension schemes, Bean remarked acidly that the government’s attempt to reject the decision of the parliamentary ombudsman “can only give comfort to those who consider it unwise to believe anything one reads in a government publication”.

Nearly 10 years’ experience has certainly left a large section of the British people reluctant to believe anything new Labour tells them. Cynics will ask: what’s new? But the government’s refusal to heed the ombudsman, or to take responsibility for the protection of pension rights, goes to the heart of the relationship between citizen and state and is part of a much bigger betrayal.

In 1996 Britain had the best funded private pensions in Europe, by a long way. In part this was a legacy of corporate responsibility among employers, for whom a well funded pension scheme was important in attracting and retaining staff. This legacy was built on during the Thatcher years, with tax incentives to reduce our dependence on the state in old age.

The legacy was blown away by Gordon Brown, for whom pension funds looked a soft target to help to fund his public sector spending binge. His decision in 1997 to withdraw tax relief from pension schemes not only depleted those schemes to the tune of £5 billion a year, it also contributed to the poor performance of the stock market.

At the same time, by introducing expensive and heavy-handed regulation of private pension providers, the government precipitated a flight from equities when the market was at its lowest, further damaging returns on pension investment. Together with the pressure on schemes of increased life expectancy, this has led to the closure of most final salary pension schemes, as employers realised the impossibility of funding their liabilities. Meanwhile, the self-employed and others with personal pension savings have seen their value plummet and the prospect of comfortable retirement recede over the horizon.

Making matters worse, the chancellor has demonstrated his passion for tinkering by embarking on reform of the tax regime for individual pension savers. The result has been unpredictability and confusion for both the pensions industry and consumers, in an area which depends on a settled regulatory framework.

Brown’s enthusiasm for means testing means that those on low earnings who manage to set aside money for retirement are effectively throwing their money away, as it renders them ineligible for pension credits. Nearly half of all current pensioners are already reliant on means-tested benefits and that proportion will continue to increase, placing a rising burden on taxpayers and reducing independence among a growing elderly population.

Already there are huge inequalities between those members of final salary schemes who got out in time — by reaching retirement — and those whose pension schemes closed or failed and who are now faced with little or no return on their past contributions. Like the four men who brought last week’s case, many of today’s oversixties simply cannot afford to retire.

The greatest inequality of all is between the protected final salary pension schemes of the public sector — including MPs — and the rest of us. As the chancellor’s fondness for creating public sector jobs has pushed up the proportion of workers paid by the state, so too has he insulated the public sector from the vagaries of personal pension saving.

Government statistics show that almost 90% of state employees can look forward to a final salary pension, while the proportion in the private sector has fallen to a mere 15%. At the same time, big wage increases in the public sector have added to the cost of funding those pensions.

Not only do public sector employees look forward to a guaranteed index-linked income in retirement, they can also enjoy it sooner. While everyone else is under pressure to postpone their retirement age beyond 65, the government has caved in to union demands and allowed the public sector to retire on full pensions at 60.

The collapse of private pensions has left a generation of workers struggling to make up the losses they have suffered. At the same time they must shoulder an increasing tax burden to cover the public payroll. It is also hard to see how younger people, with their particular financial burdens, will have any incentive to embark on pension saving.

The government believes it has no duty to act as guarantor of private pensions and has defended its actions in the recent case on the grounds that it cannot expect taxpayers to pick up the bill for failed schemes. But government decisions have been largely responsible for the present debacle and it is unseemly now to rely on what Bean described as “minute textual analysis” to avoid liability.

Blair hinted last week that a deal of some kind might be offered to the pension victims and he presumably hopes that an accommodation can be reached to avoid more bad headlines. But even if a deal is struck, it will not be enough to restore public confidence in pension saving. Through a lethal cocktail of tax-grabbing and overregulating, the government has destroyed faith in private schemes yet tried to wash its hands of all responsibility.

Confidence, once undermined, is hard to rebuild. The parallels with the rest of the Blair-Brown spin regime are easy to see.

The chancellor, while superficially a convert to the market economy, has been unable to resist easy tax grabs to fund his spending spree on unreformed public services. If Brown does succeed Blair at No 10, his new next-door neighbour will struggle with his inheritance as the soft targets disappear and the postdated cheques are presented for payment.

Brown, in the hot seat, will have to hope that voters forget his leading role in the Tony years. Otherwise he might be drawing his own gold-plated pension rather sooner than he expects.

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