Instead, we have yet another stealth tax, and if the damage isn't nearly as great as the Government's raid on the tax privileges of the pension funds eight years ago, the effect is much the same.This is a Chancellor who professes himself a true believer in the merits of tax competition between European states, yet he speaks with forked tongue on these matters. Even if there is merit in what the Treasury proposes, the right approach would have been to establish the implications first. Other quoted insurance companies seem to be less badly hit, but some foreign-owned life companies are said to be severely affected. The already limited attractions of these islands to the savings industry have just suffered another body blow.The Treasury insists that because the industry has been deliberately trying to avoid tax, it didn't need to consult. Yet what's being attacked is not a sneaky, faintly dishonest wheeze for the purpose of paying for the chief executive's Mediterranean yacht.

It is a practice that has been going on for years with the apparent blessing of the Financial Services Authority, which allows the monies so saving to be used for capital adequacy purposes.The move therefore has important implications for solvency, and is bound to affect some savers. The whole thing has proved a wonderful gravy train for the lawyers Nobody else will gain a sausage This is a case that should never have been brought. The sooner the liquidators swallow their pride and abandon the chase, the better.Another raid on the savings industryWe all know that the Chancellor is desperate to find new sources of taxation to feed the black hole in the Government's finances, but does he really need to raid the already beleaguered savings industry to obtain them?Well obviously he does, for the news that the Treasury is to hit the industry for anything up to £1bn in extra taxes was snuck out without consultation under cloak of darkness as an apparently innocuous and unimportant piece of anti-tax avoidance legislation.The Treasury said last night that the figures being bandied around in the City were a gross exaggeration of the likely impact, but that's not what the industry thinks. Legal & General alone reckons it might cost as much as £500m in additional taxation. Even today, years after the event, and with the Bank of England stripped of the supervisory powers it had back then, the allegation stabs at the heart of the Old Lady of Threadneedle Street's integrity as a central bank.The liquidators have known this all along, yet encouraged by a host of successes in recovering money on behalf of creditors, they forged ahead, vainly assuming that the legal juggernaut would eventually force the Bank to cave in and pay at least a little of their £850m claim.

In essence, the liquidators have to show that the Bank deliberately went out of its way to disadvantage and help defraud BCCI's depositors. It is easy to see why Mr King could never accept such a charge. The idea that countless Bank of England officials conspired over a period of years to keep the BCCI fraud from the public is plainly ridiculous Negligence is one thing; dishonesty quite another. In an effort to protect the taxpayer from a tidal wave of compensation claims, Parliament has seen fit to surround its executive with all kinds of legal immunities.Yet it is possible to sue for malfeasance, or outright dishonesty.