The Government’s long awaited Pensions Bill is delayed yet again. Cynics are saying that its non-appearance is due to the Government being forced to cut down the scope of the bill that it will now bring forward in February. It would be nice to think that the non-appearance of the bill was because the Government was presenting the most radical yet of its pension reform proposals.

What would such a bill look like? In its preamble the Government would rightly boast that it has used more taxpayers’ money to help more of the poorest pensioners than any government in recent times. The Chancellor of the Exchequer was right to use what cash he had to concentrate help, first by the MIG, now by Pension Credit, on those pensioners at the bottom of the income pile.

The bill’s preamble could also rightly boast that in order to encourage more individuals to save it had forced the industry to introduce stakeholder pensions. These are a much simpler saving product than ever before and, as everybody knows, there is a one per cent ceiling on annual charges.

The third theme of the preamble would be that, now these initial reforms had been completed, the Government’s bill was aimed at radically reforming pension savings in this country. The need to do so is now more obvious than it ever was.

It is quite clear that the Government will not let the Pension Credit scheme survive in its present form. Careful observers have noticed how spokesmen have been careful to say that the Pension Credit’s eligibility will be linked in line with earnings for this parliament only.

The reason for this caution is obvious. If the Pension Credit is continually revised in line with earnings the cost to taxpayers would be equal to an additional 11p in the pound by 2050.

It is also becoming apparent that not limiting the shelf life of Pension Credit is affecting the numbers of people on lower income who think it is worth saving for a pension. And they have drawn the right conclusion too.

The Pension Bill would then go on to announce two major initiatives. The first would be to transform the State Second Pension, make it universal to all those going to work for the first time, and build up a funded side to the scheme. The funded side would run alongside the current pay-as-you-go national insurance scheme. There would not therefore be any problems about people paying twice as the Government moved from a pay-as-you-go to a funded scheme.

Contributions to the scheme would initially be linked to the contracted- out rebate which every national insurance payee has a right to transfer from the Fund into a private pension. These rebates can be very generous. For those on higher earnings it reaches almost £600 a year.

In future this sum would go into a new national funded pension run by a body of trustees who would also have responsibility for the administration of the current state retirement pension.

By enacting this reform the Government would, at a single swoop, ensure that nobody would retire into poverty. For that would be the terms of reference given to the trustees of the new scheme.

To accompany this reform would be a second equally radical one. This year will be the first year that higher rate taxpayers gain more tax subsidy for their pensions than do all other taxpayers combined. This outcome is quite iniquitous.

A truly radical Chancellor would therefore allow tax benefits for pension savings at the standard rate of tax only. With the revenue thereby gained the Chancellor should ensure that those who are sick, or genuinely seeking work, or who are caring for very young children or frail elderly people, have their pension contributions paid up front along with the rest of us.

These two reforms alone would transform what is fast becoming a mega pension crisis for the Government. It would allow the Government to claim by the next election that it had not only helped the poorest pensioners more generously than any other government, but that it had simultaneously laid the foundations for a sustainable, national combined funded and pay-as-you-go pension scheme. Likewise, limiting pension tax benefits to the standard rate would be the single biggest move in redistributing resources to ensure that poverty in old age is abolished.

Now that would be a radical programme, wouldn’t it? How many takers are there out there who believe the Government might introduce such reforms in its long awaited Pensions Bill?