The Rail Regulator, Tom Winsor, speaks softly but perhaps unfortunately he no longer carries a big stick. He was robbed of it the day that Stephen Byers had the brainwave of closing down Railtrack and replacing it with a not-for-profit organisation. Railtrack was funded by the capital markets and answerable to its shareholders. Network Rail is bankrolled by the Government and answerable to a 116-strong council of members - a pantomime horse with 232 legs and about as much authority.
Deprived of a shareholder base, Mr Winsor no longer has anyone to penalise when things go wrong and no lever to keep Network Rail on its toes. The result has been as sad as it has been predictable. The performance of the rail network has deteriorated whilst the cost of maintaining it has exploded. In its first year of existence Network Rail managed to exceed its budget by £1.5bn without employing so much as an extra signalman. Meanwhile delays rose by 9 per cent.
Now it is asking the regulator for £12bn more than even Railtrack and its money-grabbing shareholders were demanding, this just to keep the network in a steady state with no promise of any significant improvement in services for the foreseeable future. Mr Winsor promises Network Rail a tough settlement when he decides its access charges for the period up to 2006. Yet he is armed only with rhetoric if Network Rail calls his bluff and asks its political paymasters to shovel more money into the boiler. There are only two places that can come from - passengers or taxpayers.
Alistair Darling, who has been saddled with making the best of the bad job left behind by his predecessor, has the unenviable choice of presiding over a Beeching-style hatchet job on the network or ploughing more money in at the same time as services decline.
Fortunately for Mr Darling, the Government's inspired off-balance sheet treatment of Network Rail lets it borrow more and more without it every appearing on the public finances. Even so, he's preparing everyone for the prospect of above inflation fare increases. Mr Winsor only has a year to go before returning to a decently-paid job as a City lawyer, so it will not be a resigning matter even if the Government rides roughshod over his review in December. But it could be grim tidings for the rest of us.
J Sainsbury is following Safeway on to the petrol forecourts. In the ever more hungry search for growth among the big supermarket groups, convenience shopping has become the new battleground. Where once the trend was to ever bigger, edge of town hypermarkets, today's hot property (apart form Safeway, that is) is the smaller, more localised outlet, where incremental increases in market share can be achieved without constantly running up against the planning or competition authorities.
When it comes to convenience, location is everything, which is why Tesco paid so heavily for T & S, owner of the OneStop chain of cornershops. Both Safeway and Sainsbury have gone the organic expansion route instead in what's turning into a land grab race as ferocious as the battle for big supermarket sites back in the 1980s.
Sainsbury is right to identify petrol stations as a potentially quite large market for convenience shopping. The retail proposition at most forecourts is abysmal, so improvement won't be difficult to achieve. Results from a pilot of six stores have encouraged Sainsbury to push ahead with plans to open a further 100 Sainsbury Locals at Shell petrol stations. Both Safeway and Somerfield have already successfully exploited the forecourt market. All three supermarket chains are also targeting motorway service stations and airports for expansion.
That there is a ready market in such locations for the big grocers is not in doubt. As things stand, these places tend to be very poorly served. Less certain is how much money they'll make out of them. Shell will be extracting a heavy rent, either directly or by way of share of turnover, from Sainsbury for the privilege of setting up shop on its sites. Call it symbiosis, or perhaps just sweet revenge for all the inroads the supermarket groups have made into the petrol market over the years.
It's that time of year again. No, not Lord Saatchi's now rather laboured Tax Freedom Day - the day of the year you stop working for the Government and start start working for yourself, which as he points out takes longer to reach every year - but the time of year when for many of those in money purchase or personal pension schemes (so called defined contribution arrangements) the annual pension return wings its way through the letter box. For a large proportion of them, the returns will make particularly alarming reading.
The stock market has perked up a bit over the past two months, but that's after one of its worst years on record. The damage from the three year bear market is still catastrophic. Depending on precisely how the money was invested or what dates are used for valuation purposes, most people not in the immediate run up to retirement (where the pension ought to have been transferred into cash and bonds) will have seen the value of their pension pots shrink by about a quarter over the past year. It won't much matter how much extra has been saved in the form of normalised or additional voluntary contributions, the pot is still likely to be a good deal less full than it was a year ago.
What's more, the number that shows what pension to expect in retirement provided contributions are maintained at current levels, will also have shrunk alarmingly. It matters not that this is only partly caused by the bear market. Greater longevity is also to blame, by sharply reducing annuity rates. Even so, the effect is much the same in making people realise that they are not nearly as well off as they thought they were.
For most of those in final salary schemes (defined benefit), things look better, but only partially so. Their pensions are guaranteed by the employer, whatever happens to the stock market. However, even among final salary schemes there is a growing number of cases where employees are being asked either to contribute more, accept poorer benefits, or work longer. In a small number of distress cases, the final salary scheme is being wound up, with devastating consequences for members and pensioners.
Furthermore, big pension fund deficits cannot be ignored indefinitely. Eventually they have to be funded through increased contributions from the employer, as is happening with British Telecom. That means less profit, which in turn means less money for pay rises and employment. One way or another, the pensions crisis hurts everyone.
All business downturns have their defining characteristics. In the early 1980s it was high unemployment caused by the savaging of manufacturing industry. In the early 1990s it was negative equity. This time around it's the pensions meltdown. Most people treat pensions as a problem for another day. Yet eventually it catches up with all of us. The choice is a stark one. Save more and consume less, work longer, or face an impoverished old age. Don't count on property to deliver the sought after pension. The way things are going, everyone will be cashing in their property chips at the same time, making for a bull market in granny flats and a bear market in largish houses.
The policy dilemma for government is equally difficult. The last thing policy makers want is for people to consume less, for that way lies what Keynes once called the paradox of thrift, where increased saving causes falling demand which in turn triggers falling output. On the other hand, nor does government want to store up a massive future benefits problem for itself. The annual pensions return is a worry, but if it's any consolation, it's a worry for everyone.Reuse content