The business - Patrick Hosking laments the state of pensions

Pensions policy is a mess: not enough in the kitty, a crisis of confidence among savers and, with al

How irritating that the departure of Andrew Smith as Secretary of State for Work and Pensions has been reported, debated and interpreted almost entirely in terms of the Blair/Brown feud. Smith was an ally of Gordon Brown, while his successor, Alan Johnson, is a Blairite. Therefore, goes the Westminster scuttlebutt, the hurried exit (he jumped before he was pushed) was all about the PM giving the Chancellor a bloody nose.

Could it not be possible that Smith's departure had something to do with Labour's abysmal work and pensions record and because he was not good enough at his job?

If ever there was a government department in need of some thought, support and guidance from above, it is the DWP. It seems all too appropriate that the man responsible for the most memorable phrase in Whitehall in years ("I'm fucked, you're fucked, we're all fucked"), Sir Richard Mottram, is the permanent secretary there.

Pensions policy is a mess. There's not enough money in the kitty, there's a crisis of confidence among savers, and there's confusion among poorer people as to whether it's worth saving at all, because of means-tested benefits.

At a legislative level, things are not much better. The Pensions Bill is a good thing, but deeply flawed, leaving many questions unanswered about how compensation to victims of occupational pension fund failures will work. No one has a clue how the interim £400m Financial Assistance Scheme will be administered, nor how its successor body, the Pension Protection Fund, will be run.

There is a real danger that responsible employers with well-funded schemes will end up cross-subsidising irresponsible ones. There is also the risk that the new levy for the protection fund will be the final straw for some employers, who will join the rush to close "final salary" schemes, replacing them with inferior "money purchase" schemes, which guarantee nothing.

Another alarming loophole in the bill was unearthed just recently. Employers will have the power to change employees' benefits without their permission, even scrapping widows' benefits, according to the Faculty and Institute of Actuaries.

And then there is the department's other hot potato - the soaring numbers who claim incapacity benefit.

The Department of Trade and Industry always used to be regarded as the most poisoned of ministerial chalices. Now that honour has passed to the DWP. Good luck, Mr Johnson.

Is anyone else sceptical of the mountain of tales about people who've made their fortunes buying and selling stuff on eBay? The online auction company now claims 430,000 people earn a living from the site. The curious thing about these people is that whatever they trade in - designer handbags, pet food, pop-concert memorabilia, Chinese antiquities - the price always moves favourably for them.

There's no escaping the fact that eBay is a brilliant idea - a simple, efficient and virtually costless way of introducing buyers to sellers. You'd expect it to produce the occasional millionaire.

It seems that whatever tat you snap up on eBay, there is always someone out there among the 114 million registered eBay users prepared to pay an even higher price for it.

This may have something to do with some of the merchandise being hot. Stolen goods tend to be offered cheaply and the price rises as their dodgy origin is laundered. But I wonder whether there is a bubble element in all this. There is something mesmerising about the way the auction process works. Other people's bids reassure you that the most abject garbage is worth something.

Out there in Middle America and Middle England, people in search of profit are diligently accumulating airline sick bags (unused), John Kerry lapel badges and genuine rainwater from Caribbean hurricanes ($6.99 for five ounces) at considerable cost.

Could it be that something akin to tulipomania, the fad for tulip bulbs in 17th-century Holland, is taking place in 21st-century cyberspace?

The business community's fightback against animal rights extremists has suffered a fresh setback. Huntingdon Life Sciences was deserted by dozens of banks, brokers, accountants, investors and suppliers in the face of threats to their own staff. Business needed a figurehead around whom to rally and show some backbone.

As we revealed last week in the Times, a City grandee approached to lead the campaign decided against. His house had been previously attacked and his family threatened because of the link between a company he chaired and Huntingdon.

Very understandable, but it means the bad guys are winning.

Patrick Hosking is investment editor of the Times

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