The Tory right shows its muscle

An encounter with the Jurassic wing of the Conservative Party

From the Conservative conference

Away from the pastel colours and soft furnishings of the conference hall, a packed fringe meeting held by the Thatcherite Bruges Group felt like a foreign land. Here, Enoch Powell was right, Section 28 should be restored, and Britain is no longer a self-governing power. With more than 600 people in attendance, the largest meeting I've seen all conference season, the Tory right showed its muscle.

The ostensible motion was: "Are the political parties failing the voters of Britain?" But the meeting was inevitably dominated by the view that the Conservative Party had failed the people of Britain over Europe. Even before the speeches began, a cartoon depicting Margaret Thatcher as Queen Boudicca riding out of Brussels prompted waves of applause.

There were almost xenophobic levels of contempt for David Cameron's pledge to ring-fence overseas aid. The speakers, including the Daily Telegraph's Simon Heffer and the Mail on Sunday's Peter Hitchens, all forcefully declared that public spending should be cut across the board. But they at least followed the logic of their position: dramatically reducing the size of the public sector will lead to a surge in unemployment. David Cameron has promised a bonfire of the quangos in all but name while vowing to "get Britain back to work" at the same time. Labour must expose this contradiction far more successfully than it has done.

Heffer was also right to point out that Cameron cannot simply "unpick" the Lisbon Treaty after ratification, with no desire among the other 26 states to renegotiate areas such as justice and home affairs. "There is no middle way," he declared, and called for a referendum on EU membership.

At an earlier fringe meeting on Europe I saw the Sun's associate editor Trevor Kavanagh watch Ken Clarke like a hawk. He later harangued the shadow business secretary over the "anti-democratic" European Union.

It's worth remembering that it was the tabloid's fury over Clarke's return to the shadow cabinet that prompted Cameron's decision to appoint the Eurosceptic William Hague as his de facto deputy. With even Daniel Hannan conceding that a retrospective referendum on the Lisbon Treaty would be "silly", support is growing for the alternative of a referendum on EU membership. If Cameron is elected, I expect the Sun to lead the charge.

George Eaton is political editor of the New Statesman.

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Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: products-and-investments/ pensions/pensions2015/