James Daley: Whose money is it anyway, Mr Brown?

Gordon Brown was once again performing his Robin Hood party-trick last week, announcing plans to raid the unclaimed billions sitting in dormant bank accounts to hand out to the poor and needy (or, in this case, a handful of youth projects across the UK).

Although such a policy seems imminently sensible, the move marks the completion of yet another remarkable U-turn for the Treasury, which for years has claimed it could not touch the stash of unclaimed assets, because it was not theirs to touch.

This is absolutely true. Every penny and pound sitting in an unused bank or building society account has an owner - and even if that owner has passed away, the money still technically belongs to their estate.

However, given that in many cases the banks no longer have the necessary paperwork to identify what belongs to whom, and given that many of these accounts have not been touched for decades and never will be, the idea of using the cash for good causes is not an outrageous one.

The problem, however, is how the Treasury has decided to allocate the money. There are, of course, a multitude of needy causes in Britain which could make a justifiable claim for a share of this pot - and I'm sure it will be put to excellent use in regional youth projects, just as it would have had it been handed to a number of other charities.

But there is one group of people who rightly feel aggrieved at the Treasury's decision to snub them - as it was they who, for the past two years, have been calling on the Government to use at least some of this money to help them.

These are the 85,000 or more people who have lost most or all of their pension savings in recent years, after their employers ran into financial difficulty. Most of these were told that their pensions were guaranteed. However, after the sharp fall in the stock market between 2000 and 2003, large holes began to appear in their company pension schemes. When their employers then hit hard times, many of these schemes were ditched or wound up, cementing their deficits and ensuring that their members lost a lifetime of savings.

Although the Government has agreed to put up some £400m to help compensate some of these workers, this is not nearly enough (the actual bill is closer to £3bn). While the Treasury claims it cannot spare any more from its own coffers, this would have been the perfect cause for which to use at least some of the money in dormant bank accounts. When the pensioners suggested this last year, however, they were given the stock line that this money was not the Government's money to give .

With the compensation pot likely to remain inadequately funded, those who do eventually receive payouts are now set to get only a fraction of what they lost. Furthermore, although the pensions minister Stephen Timms personally promised this summer that the first payouts would be sent out by the end of the year, not a single payment has yet been made. Some of those who fought for this compensation, such as Dexion's Dave Cheshire, died before they received a single penny.

Gordon Brown's decision to once again pass up an opportunity to help these people is heartless. But it is also short-sighted. What message does he think he is sending out when he turns his back on people who lost a lifetime's savings through no fault of their own?

All hopes now lie with the Parliamentary Ombudsman, who is investigating the issue and has the power to order the Government to pay full compensation. Given the way it has acted so far, it is hard not to hope that she comes down on the Treasury and the Department and Work and Pensions with her full force.

David Prosser is away