William Kay: Brown's message to disillusioned savers: it's the election, stupid

The Budget was every bit as streetwise as the pundits had predicted, mainly because huge chunks of it had been leaked to an extent which would have got previous Chancellors the sack.

It's the election, stupid. That was the key to Gordon Brown's slick presentation and overall refusal to raise taxes, while giving the over-70s a bribe to help them pay council tax and retreat from the barricades and - more importantly - newspaper front pages. Other potential horrors, such as taxing granny flats, were toned down in what Mr Brown portrayed as an exercise in listening. As if.

But while second or third-time homebuyers might be relieved that Mr Brown spared them stamp duty increases, capital gains tax, or higher VAT, he also did nothing about savings. That is a project for another day, nothing to worry our little heads about just now, when we are being softened up for a visit to the ballot box.

Maybe I'm being too cynical. Mr Brown is nothing if not consistent. His name is a byword for stealth taxes, fiscal prudence, golden rules, enterprise and not raising spirits duty. What you see is what you get. And what you don't get is any serious thinking about savings, investment, pensions and the like. Oh yes, we have had Isas - now being wound down. We can look forward to the Child Trust Fund, which will buy less well-endowed 18-year-olds a free Club 18-30 holiday if they're lucky.

Beyond that, not a lot. Pensions have been simplified, and few of us are going to be bumping up against the forthcoming £1.5m lifetime ceiling. Equitable policyholders, and those of any other insurer who has closed a with-profits fund, can go jump. Tax relief favours existing savers who have some tax to relieve, which is why Isas are on their way out, but so far nothing is replacing them. Non-savers can look forward to a heady cocktail of state basic and second pensions and a pension credit, which might buy them a weekly trip to the pub and the odd night at the bingo. Nice.

And it's not as if we are getting much help from the pensions and savings industry. Fresh humiliation was dumped on it this week, when a Daily Mail reader said he would rather tell his children to take their money to a bookmaker than an investment firm. Christopher Robotham, of Chesterfield in Derbyshire, said that, compared with the pensions and savings industry a bookmaker was "a bastion of respectability and makes no promises about you ever seeing your money again ... and you might have a little fun before you wave your cash goodbye".

Mr Robotham has been unlucky. He is an Equitable policyholder and his occupational pension scheme has been wound up. But his sense of disillusionment is all too prevalent, and Gordon Brown did nothing to restore his or any other saver's confidence in this "now you see it, now you don't" Budget.

* It was one of those cringe-making moments that make unmissable television. At the end of an interview about store cards on BBC Breakfast, the presenter Natasha Kinski brightly concluded "of course, the best thing to do with them is cut them up but of course" - turning her most winning smile on Martin Hall, spokesman for the Finance and Leasing Association - "you wouldn't agree with that, would you?" Mr Hall's face was a picture of exquisite torture before the camera mercifully turned away.

The Office of Fair Trading on Thursday ordered a Competition Commission inquiry into store cards. Publishing summary boxes stating the rate of interest is not enough. A small minority cannot handle these cards: they should be identified and rescued as early as possible.

Protected products risky for banks

Richard Pym, chief executive of the mortgage bank Alliance & Leicester, gave a glimpse into the future of savings this week. He said "a growing culture of blame and compensation", would mean financial companies marketing more boring, risk-free products. Basically, he was saying the industry does not like the way the rules are being rewritten by the Financial Services Authority, so it intends to hide in the corner and sulk.

But Mr Pym also stumbled on the weakness in his own argument. He said: "Even if there was no loss, just a smaller profit is now a cause for compensation."

And that is where banks, insurers and investment companies are caught in a double bind if they are to remain in business at all. By retreating into ultra-safe products they are denying customers the possibility of the fullest profits a market may yield. Indeed, protected products guaranteeing investors' money back but paying only a proportion of any uplift may turn out to be highly lucrative for the providers.

Mr Pym and his counterparts cannot escape the "culture of compensation" so easily. The answer will be to ensure that customers know what risk they are taking on, so that only justifiable compensation is paid.