BY THE early years of the next decade the majority of those who vote will be pensioners. That will be the grey vote with a vengeance. The projection comes from the House of Commons Library and is very bad news for the Labour Party, and particularly Gordon Brown.

Since 1997 the pensions system of the United Kingdom, which used to be the best in the world, has been stripped down and left lying in pieces on the floor. Every party, now including the Labour Party, wants to put it together again. But demographics are moving against them and eight years of destruction cannot be repaired, perhaps ever. Tony Blair must, of course, share the responsibility. If Gordon Brown is the captain of the Titanic, Mr Blair is the chairman of the White Star Line. He decided to buy the leadership of the Labour Party, and therefore the key to Downing Street, by promising Mr Brown monopoly control of economic and social policy; that is an abdication no modern Prime Minister has ever made. Nevertheless the main executive responsibility must fall on Mr Brown.

He took all the big decisions on pensions. He has wrecked the system of private pensions; he has wrecked the system of public pensions; he has destroyed the system of savings; he has taxed pensions by deliberate stealth; he has impoverished generations of old people, past, present and to come. Brown’s pension policy has been one of the great disasters of British financial history. He must be held responsible.

In his first Budget, in July 1997, Mr Brown “reformed” the system of advanced corporation tax; this was the first and largest of all his stealth taxes. The public did not understand what he presented as a technical adjustment of tax, which would fall on companies. Yet its effect was to increase the tax on funded private pensions and endowment systems by about £5 billion a year. Mr Brown knew that the public would not immediately recognise that he was taxing pensions. He taxed all the tomorrows of old age because he thought he could get away with it.

The sums are huge, and they have had a huge impact. Over eight years the tax will come to £40 billion. The accumulated loss of interest brings the cost up to £50 billion. Beyond that there is the effect such a tax has in lowering the valuation of the whole stock market. The present value of pension funds and assurance assets is £1,100 billion. If Gordon Brown had not imposed his tax, it would probably be about £1,300 billion.

The damage can be seen in the number of final-salary pension schemes which have had to be closed, and the number of pension funds which are now in serious deficit. It can also be seen in endowment and with-profits assurances that will provide only half their expected return, or will fail to cover mortgage repayments.

For private pensioners, Mr Brown’s stealth tax has been a disaster; it has led to the virtual winding up, often on very poor terms, of sections of the British life assurance industry, once one of the prides of the City of London.

He also changed the state pension system into a complex and largely means-tested structure. Almost everyone advised him against that, but Tony Blair did not have the guts to stop him. Brown’s system is absurdly expensive to administer and fails to reach a large number of the poorest pensioners because it is too complex and too demeaning. Millions have failed to claim. It largely removes the incentive to save.

Both the Conservatives and the Liberal Democrats have made their proposals to restore the state pension to a level which would largely eliminate the need for means-testing. Both opposition parties regard Mr Brown’s pension system as a wasteful disaster.

So, strangely enough, does the Labour Party itself. Gareth Davis, a Labour adviser, has drawn up a scheme under which the Gordon Brown structure of means-tested benefits would be wound up and replaced by a single state pension. The pension would go up from £79.60 to more than £100 a week under the Davis scheme, which is now being studied by Tony Blair. Of course, this proposal would mean another new tax.

The problem with stealth taxes is that they eventually have to be paid. Those whose pensions funds or endowment assurances have produced far less than they reasonably expected have only to read the City pages to understand what has happened. Pensioners who are getting £79.60 a week plus means-tested benefits can easily discover whose crazy plan determines what their pension will be.

Neil Kinnock made a famous speech in which he said the people should not be old under the Tories; they certainly should not try to be old under the regime of Gordon Brown. Politically his failure poses two problems. How is the Labour Party to persuade pensioners, outside the public sector, to vote for it at the next general election? Of course, ministers have not had their pensions stealth-taxed nor have Members of Parliament, nor senior civil servants. But all private-sector pensioners ought to regard Gordon Brown as the enemy.

Can Gordon Brown and Tony Blair continue to cohabit? So long as the Chancellor was successful and delivered the goods, Mr Blair perhaps had to put up with him. But even by the next election, nearly half those who actually vote will be pensioners.

They will be divided into two groups, those who do not know what has hit them and those who know it is the Labour Party. That makes Gordon Brown a political liability as well as the neighbour from hell.

Joint the Debate at comment@thetimes.co.uk

Times Recommends

• Ted Hughes was a prophet of climate change
• Health & safety can damage your reasoning
• It’s Big Brother’s stupidity that scares me