APATHY creates its own momentum. It has built up powerfully behind the Pensions Commission report. Sensible people have been convinced that “doing nothing is not an option” for the nation’s pensions. Few can be bothered to exercise their grey matter on the dry detail. The commission’s conclusions are approved of by Whitehall, whose corporate wisdom they reflect. They create a foundation for consensus that will absolve party politicians from blame for raising the private sector retirement age. So let’s get on with it.

Even some pensions experts back the report on the ground that universal state provision would eventually rise and it would be fairer to women, many of whom now find it virtually impossible to qualify for the full basic benefit.

Gordon Brown seemed to be the only stumbling block. He champions means-testing of pensions because it targets tax resources more efficiently, although he does not apply the same principle to school education or the NHS. This peeved Lord Turner of Ecchinswell, chairman of the commission, because he had bent over backwards to come up with a scheme acceptable to the Chancellor. But Mr Brown finally seems to be coming round.

Treasury officials are paid to look at detail. Perhaps those who analysed the report told him that its proposals would boost Treasury tax income relative to current spending for the rest of his career in office, by siphoning more money out of private sector pensions.

Perhaps they have told him that the National Pensions Savings Scheme, the second key element in the report, would clear the way for future Chancellors to axe tax relief on pension contributions above the low level envisaged in the Turner plan. This relief would in future overwhelmingly benefit taxpayers on above-average incomes. The tax cost of pension incentives might be halved, boosting taxation without higher income tax rates.

Perhaps they have reassured him that means-testing will grow for years. It will take more than a generation to fall significantly. Meanwhile, the system will become more complex than it is today, with three different types of state pension and two pension credits.

At this point, you might think, some courtiers would tell the emperor that he had no clothes. But the professionals are as keen to stay on board as the politicians are desperate to be shot of the whole thing.

The Pensions Commission was set up to look at how to promote wider private pension provision so that fewer people would need means-tested benefits. It widened its brief because it met a consensus that the system should be simplified drastically. Members of the National Association of Pension Funds and the Pensions Policy Institute, among others, told the commission that we needed a basic state pension near to the means-test poverty threshold. Anything above that could be left to the private sector, which could be freed from the bureaucratic rules required while the state and private systems overlap.

The Turner consensus is rather different. The state system will expand and become more complex. Occupational pensions in the competitive private sector will wither away, starting with defined contribution schemes. Eventually, virtually all company schemes will disappear. Until they do, the interface of the two systems will become more entangled.

For the next 40 years, if these plans go ahead, most people will have little hope of working out their own circumstances. They will be entitled to something like the present basic state pension on the strength of UK residence. The second state pension will, eventually, also be flat rate, but entitlement will depend on earnings-related contributions. In the long run, when we are all dead, the two together will bring most people up to the poverty threshold and be index-linked to earnings, almost certainly making them unaffordable. This could be avoided by fixing the higher combined pension as a percentage of national income, so that pensioners and the working population would share the burden of rising longevity. But the commission did not consider this.

Then comes the National Pension Savings Plan, the commission’s response to its original brief. The NPSS is a semi-compulsory nationalised rehash of the unpopular stakeholder pensions. It will continue to rely on the unreliable annuities market, which faces massive distortion. Making an unpopular scheme compulsory is a ludicrous basis for reform. It would spread provision wider at a level previously damned as inadequate for a comfortable retirement. But it would do so at the price of squeezing out adequate private pensions, which would progressively become more costly and less necessary for companies to maintain.

Doing nothing is not just an option: it is far preferable to this bureaucratic plan.

graham.searjeant@thetimes.co.uk

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