Workers who lost their pensions through corporate failure accused the Government yesterday of opportunism and double standards over its decision to bail out Northern Rock while denying them compensation.

Investors whose savings were slashed after the near-collapse of Equitable Life, and those robbed of final-salary pensions after the failure of their companies, have been refused full compensation by the Treasury. The Government insists that taxpayers should not foot the bill for their losses.

Alistair Darling, the Chancellor, said on Monday that he would guarantee the savings of all Northern Rock customers. By implication, that has made taxpayers responsible for underwriting the entire £1,600 billion held in UK deposit accounts.

Hector Sants, chief executive of the Financial Services Authority, said yesterday that the compensation scheme set up to protect retail bank deposits may be made even more generous to restore confidence in the system. He said that the limits of the Financial Services Compensation Scheme, which pays a maximum of £31,700 on deposits, had contributed to the panic over Northern Rock.

Customers withdrew more than £2 billion after it emerged that Northern Rock had sought an emergency loan from the Bank of England. As much as half of the bank’s £24 billion retail deposit base is expected to drain away.

Having announced that the Government would cover all of Northern Rock’s deposits if the bank collapsed, Mr Darling said yesterday that the same support would be given to other banks hit by the crisis stemming from problems in the American sub-prime mortgage market.

Paul Braithwaite, general manager of the Equitable Members Action Group, said that members were furious over the treatment handed out to Northern Rock’s customers, compared to those of Equitable Life.

“We’ve been stonewalled for six years and Northern Rock, with its highly dubious business model, gets dealt with in a few days,” Mr Braithwaite said. “What’s the difference? An election’s looming this time, that’s what.”

More than one million Equitable policyholders found that their pensions and savings had been cut by up to 50 per cent after the House of Lords ruled in 2000 that the mutual must honour its promises to policyholders with guarantees built into their pensions.

The judgment blew a £1.5 billion hole in the insurer’s finances, forcing it to close to new business.

Despite being responsible for financial regulation at the time of Equitable’s near-collapse, the Treasury refuses to take responsibility for the debacle. The Parliamentary Ombudsman is due to report on the Equitable case next year.

Ros Altmann, a spokeswoman for the Pensions Action Group, said that the Government’s decision to bail out Northern Rock, while refusing full compensation to workers who lost their final-salary pensions when their companies collapsed, was unacceptable. “The Government has consistently said that taxpayers cannot be expected to compensate the victims of this scandal, [but] Northern Rock savers have had their savings fully underwritten by the taxpayer,” Dr Altmann said. “No wonder no one trusts the Government when it says that Northern Rock is safe. It said the same thing about final-salary pensions, and look what happened to them.”

The Parliamentary Ombudsman ordered the Government to cover the total losses of an estimated 125,000 employees who followed incorrect government advice that final-salary schemes were infallible.

The Government has refused, instead setting up the Financial Assistance Scheme, which pays out about 65 per cent of the lost pensions — and costs more to run than it delivers in compensation.

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