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BAA did not, however, bargain for a potential grenade lobbed in by the Office of Fair Trading. It is looking again at breaking up BAA’s London and Scottish monopolies, supposedly in the interest of consumers. The prospect of a full investigation should make Ferrovial’s bankers think twice. A break-up could slash the value of secondary assets, bring fierce price competition or both.

Fortunately for BAA investors, a break-up would make logical sense only if the airports were in the hands of foreign financiers and builders. The unspoken deal is that BAA is allowed a monopoly in exchange for going along with government expansion plans, however eccentric or uneconomic, such as a second runway at Stansted.

This could be claimed as being in consumers’ long-term interests. But in the hands of a private equity group with a shorter-term thirst for cashflow, the unspoken deal could unravel, ending the justification for monopoly. So the OFT move makes BAA look safer, in the absence of a market crash.

Pension gap

FOR ONCE, the devil is not in the details. There is plenty to ponder in yesterday’s pensions White Paper. It may even be a sensible set of compromises. What it is not is a solution to the fundamental shortcomings of the nation’s pensions provision. The simple reason why can be summed up in a single word: trust. The deficit at the heart of this issue is not a financial one, but one of public faith.

How can any rational person have confidence in John Hutton’s claim that this is a “lasting solution”. Every government has said that about its pensions proposals. And none have lasted more than a few years. Why should this time be different? Mr Hutton’s paper may for now command cross-party consensus, but that could evaporate if future government finances, or market conditions, change, as they certainly will.

There is no guarantee that future ministers will not renege on pledges by this Government on which it has itself patched up a mere facade of unity.

Nor will the latest compromise restore the trust of savers in companies to honour their promises, or in markets to deliver the needed returns, at a time when this has been shredded by closure of pension schemes, a rash of financial scandals and tumbling asset values.

For any reform to succeed a new bond of trust between savers, governments, employers and markets is essential. That will require simplicity in the system, certainty that it will deliver some minimum return, and an ethical dimension to the actions of politicians, companies and asset managers. We are still a very long way from achieving anything like that.

Fortress, the investment fund about to buy Telent, the rump-end company whose chief role in life is securing retirement income promises for 69,000 Marconi/GEC pensioners, may have landed a bargain. The £350 million purchase price factors in virtually no hope that the new owner will get its hands on £490 million of safety-net cash sitting in escrow. Regulators are most unlikely to allow the cash to be unlocked. But if accounting and actuarial assumptions change — and they might — Fortress could find itself sitting on a pot of gold.

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