Chancellor Brown sees organised savings as an easy touch.

His first Budget eight long years ago hinged on taxing the dividends paid to pension funds - with ruinous results now plain to see.

Then he gradually stripped away the tax break on PEP and ISA dividends. Along the way, he brought in a means test for top-up pensions that makes any saving for old age pointless unless you are quite well off.

So you cannot blame the Association of British Insurers for denouncing his latest plan to tax life assurance reserves as "another smash and grab on the savings industry", or Legal & General for claiming it could face a one-off charge of £500 million out of the blue. Resolution Life, which includes the former Britannic Assurance funds, fears it could be badly hit, too.

The Revenue and Customs dismisses all this as " nonsense". It is just part of Mr Brown's clampdown on tax loopholes - and it cannot consult on loophole-stopping without alerting everyone who would like to slip through a final billion or two while they are still open.

The underlying idea is clear enough. Back in 1989, life companies were given an option to count investments in their reserves at their original book value. They could shunt money into them, instead of declaring it as (taxable) profit, and then escape corporation tax on the investment gains.

That helped them smooth out the ups and downs of the stock market in the bonuses they declared on with-profits policies - though not enough, as it turned out, to pay out as advertised on endowment mortgages.

What irked the Treasury was to see this tax-free money going into reserves backing non-profit policies. These promise to pay a sum stated at the outset without any bonuses generated by stock market or property investments. Nobody needs nonprofit reserves, says the Treasury. They are a tax dodge, pure and simple.

That is not how the Financial Services Authority has put it in the past. The regulator is rather keen on things like " solvency" and "resilience". There is little joy in a non-profit policy with a company that goes bust.