James Daley: Brown will pay for evading the pensions compensation issue

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The department of Work and Pensions (and Incompetence) has been busy being quiet over the past few weeks, helping the Government keep pensioners off the political agenda, to make way for a string of happy-happy announcements about child trust fund handouts and first-time-buyer initiatives.

The department of Work and Pensions (and Incompetence) has been busy being quiet over the past few weeks, helping the Government keep pensioners off the political agenda, to make way for a string of happy-happy announcements about child trust fund handouts and first-time-buyer initiatives.

With some real progress made in the last few months of 2004 - as first the Turner report, then the final readings of the Pensions Bill, helped to propel the pensions crisis onto the front pages - such a sudden halt to the momentum is desperately frustrating.

Although the tangible victories for pensioners in 2004 were very few, there was a genuine feeling that the Government's days of being able to bury its head in the sand had ended. Talk of Blair and Brown fighting over pensions credit, and an increasingly sympathetic tone from the new Work and Pensions minister, Alan Johnson, delivered some hope that the importance of pensions was finally seeping though into the Government's consciousness. But with the new year came a new tone - and as the decks were cleared for the election, the pensions train was derailed.

While sorting out the problems with the state system and tackling the UK's perennial savings apathy are important, these are challenges that (although I'm loath to admit it) can probably wait until after the election. Finding solutions to these issues should be a priority for any government, but trying to prevent politicians from focusing on the most populist policies in the run-up to an election is more effort than its worth.

But while parts of the pensions mess can afford to be put on hold for a few months, the more immediate problems cannot. For the thousands who have lost most or all of their pensions through no fault of their own, in the schemes of now insolvent companies, it is incomprehensible that the Government continues to drag its feet over their compensation pot - election or no election.

While some £400m (a grossly inadequate sum) has been promised to help bail out the estimated 65,000 pensioners who have suffered this fate, no details of how and when this money will be paid have yet been published. Meanwhile, those who are already in retirement, are receiving a fraction of a pension that they spent their whole life saving for - and which the Government told them was guaranteed.

Although Alan Johnson is the Government's new fall guy for pensions-related incompetence, it is the Chancellor who lies behind the latest stalling. While Gordon Brown farms out his dirty work to the likes of Johnson, and his new financial secretary, Stephen Timms, it is well known within Government that the harsh line on pensions compensation comes from the Chancellor himself, who feels he has no obligation to help the cheated pensioners.

But although there might not be anything that can be done to get the ball rolling before May, it may not be much longer before Brown's stubbornness comes back to haunt him. With the Parliamentary Ombudsman now several months into her inquiry into alleged Government maladministration over pensions, there are growing whispers in Westminster that the chances of a pensioners' victory are steadily increasing. This could see Brown humiliatingly forced to cough up billions in compensation - not just to the 65,000 but to many others.

The longer the Government drags its feet, the more it will deserve everything it gets.

* It was astonishing and encouraging to see Eon, the German electricity giant that owns Powergen, take responsibility for the enormous hole in its UK pension fund this week, injecting a whopping £420m. It may still leave a deficit of more than £300m, but it's a big step in the right direction, and all too rare given the number of companies that suffer from similarly sizeable pension-fund black holes. There are tens of companies Eon's size, which have the resources to help repair their pension funds' deficits, but instead remain irresponsibly neglectful. BA, BT, Rolls-Royce - the list goes on - all have deficits in excess of £1bn which they are quietly hoping will be repaired by rising markets. Unlikely. It may not be long before one of these giants is brought to its knees by its pension fund.

Rage against the machines is just a pantomime

The cash-machine panto comes to town again on Tuesday, when the Treasury Select Committee interviews a rabble of the nasty people who charge you to get your hands on your own hard-earned cash. Boo! Hiss! Etc.

I still find it extremely hard to get excited about this apparent "scandal", which - as far as I can see - is not much more than a great publicity stunt by Nationwide, which has been leading the campaign against the fee-charging cash-point operators.

Ever keen to keep the story rolling, Nationwide this week published a new cash-machine "code of conduct" to keep those nasty men in their place. Their wish-list includes the request that all charging machines have a "prominent warning of charges BEFORE a card is inserted" (just in case you fail to understand the screen that comes up AFTER you've put your card in, which clearly warns you about the charges and gives you the option to quit).

As I've said before, I can understand those who get hot and bothered about the removal of free cash-machines in rural areas - and maybe there is a genuine need for something to be done to help people who have no easy free access to their cash. But big warnings on the machines (and in the shop windows too, demands Nationwide) is a waste of time, and quite frankly a pretty patronising gesture.

Still, watching the Treasury Select Committee getting themselves in a sweat over nothing is always good fun. Oh no it isn't...


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