Business Editor: Pensions, nukes and black magic from Brown

For probably the final CBI conference overseen by business's favourite Brummie, Sir Digby Jones, the employers' organisation is giving up its traditional trip to Birmingham and is decamping to trendy Islington. The north London borough was, for a long time, the home of Tony Blair and many see it as the spiritual home of New Labour. Only a few hundred yards from the conference venue is the site of Granita restaurant, where the Blair/ Brown deal to hand over power was famously struck. But, 11 years on, the deal has yet to bear fruit, and Granita has given way to a kebab shop.

So it is appropriate that the Prime Minister will stand up at 9.15 on Tuesday morning to give a speech that will, to all intents and purposes, tell the world that the Chancellor is now running the country. Mr Blair allowed it to be leaked that he would tell the CBI he was launching an energy review. The leak went a bit further, though. It said the review would give the green light to the building of new nuclear power stations. Only Mr Blair won't say that. And why not? Because Gordon Brown won't let him.

The Chancellor has told the interested secretaries of state - Margaret Beckett and Alan Johnson - that new reactors will only be built if the economics work. Well, economics and nuclear energy are poor bedfellows. As we stand today, the UK still has no policy on how to get rid of the nuclear waste built up over 51 years of our civil and military nuclear programme. The Government has a committee that will make recommendations in July. And it may adopt those recommendations - or it may use them as the basis for a further debate, as is happening to the Turner report on pensions (of which, more later).

But as any fule kno (apologies Molesworth), until you work out what you are going to do with the nuclear waste, and how much that is going to cost you, you can't say how much nuclear power costs. Nirex - the organisation where I'm a non-executive director - wants to build a big hole called a repository and store the waste in it. But if you do that, is the cost attributed to the waste from new nuclear plants priced as a percentage of the cost of building the repository (which is billions) or the cost of storing waste in it (which is tens of millions)?

As you can see, nuclear energy is voodoo economics. Which gives the Treasury lots of leeway to bias the figures to get the result its master wants. It's like the accountant who, when asked what 2 + 2 equals, answers: "Did you have a figure in mind?"

The same can be said about pensions, where the Chancellor was throwing his weight around last week. Here, voodoo economics has crossed with the dark arts of political spin to create a muddle. Poor Lord Turner was asked three years ago to look into the pensions crisis. He was allowed a preliminary report, setting out the problem, before the election. But his final report, with any solutions, had to wait until a less politically sensitive time. It is due this week, but has been well leaked. Was this by Adair?I don't think so.

What happened was a leak of a letter from the Treasury questioning his sums. Then Mr Brown "let it be known" he would not accept a proposal linking pension increases to average wages. And the report was holed below the waterline even before it was launched.

To save face, Mr Blair is now saying Turner will be the basis for future debate. But there is no debate. It is clear we can talk and talk all we want, but if the Chancellor does not want something, it does not happen.

It feels like power has been handed over, and we didn't even realise.

j.nisse@independent.co.uk