I agree with David Cameron (!)

Nick Clegg and the Lib Dems are all over the place on their coalition “strategy”.

Regular readers of this blog will know that I rarely agree with David Cameron, but I can't help but concur with his line on the Lib Dems this morning:

He [Cameron] said the Lib Dems were in "complete muddle and confusion" as they had not spelt out what they would do if Labour won the most seats -- but comes second in terms of overall votes.

He's got a point, hasn't he? On Sunday, Clegg threw away months of hard work, having dodged and ducked questions about which party he would back ever since talk of a hung parliament went mainstream back in November. His careful formula was expressed on the BBC's Andrew Marr programme on 22 November 2009:

I start from a very simple first principle: it is not Gordon Brown or David Cameron or Nick Clegg who are kingmakers in British politics, it's the British people. Whichever party have the strongest mandate from the British people . . . have the first right to seek to try and govern, either on their own or with others.

Even though he was then repeatedly asked to define "mandate" -- votes or seats? -- Clegg stuck to this carefully worded formula right up until the start of this election campaign on 6 April. But Cleggmania seems to have gone to his head -- and he threw away all the hard work he'd put into evading and dodging the "What do you mean by a mandate? Votes or seats?" question.

On yesterday's edition of Marr, elaborating on his statement in the Sunday Times, the Lib Dem leader said:

It seems to me that it's just preposterous, the idea that if a party comes third in terms of the number of votes, it still has the right to carry on squatting in No 10 and continue to lay claim to having the prime minister of the country.

. . . What I'm saying here is pointing at a very, very irrational possible outcome of our potty electoral system, which is that a party that has spectacularly lost the election . . . could nonetheless according to constitutional tradition and convention still lay claim to providing the prime minister of the country.

The genie is out of the bottle -- and Cameron is right to point it out. Once Clegg has said the Lib Dems won't back Labour if the latter comes third (but wins most seats), he has to explain whether they'd back Labour if it comes second (but wins most seats). Clegg's ducking and diving will no longer do.

So the Lib Dems do seem muddled and confused. Clegg's answer, says the Indie's Simon Carr:

. . . certainly surprised a senior member of the Liberal Democrat command I mentioned it to later. "Surely he said that he wouldn't support Gordon if Labour got fewer votes?" Nope, he wouldn't support the Labour Party. "I'll have to go and watch it," the Liberal Democrat said.

Maybe it was a mistake. Because then Marr asked what he, Clegg, would do if Labour changed the leader after the election. He didn't say: "I repeat, if the party lost the popular vote, I wouldn't keep it in office." He said instead: "Here we get into the 'what-if' territory that I find very difficult."

And he went back to earlier ideas of collaborating with the party that would deliver Liberal Democrat manifesto commitments. But he couldn't do that with Labour polling fewer votes than the Tories because he ruled it out.

There is another important point worth raising: why does Nick Clegg think Gordon Brown would automatically lose the right to remain in Downing Street if Labour came third? Why do the Lib Dems, who have for so long rightly argued for the need for a government to secure more than 50 per cent support from the electorate, now seem so obsessed with pluralities and not majorites, that is to say, with who is first, second or third, rather than with who can command majority support?

The fact is that if -- and, I admit, it remains a big "if" -- the Lib Dems decided to enter into a formal coalition with Labour on 7 May, then such a coalition government, with Brown in charge, would -- according to current polling -- command the support of more than half the electorate.

In fact, such a coalition would have a greater popular mandate, and reflect the votes of a higher proportion of voters, than any government since the Second World War. So why couldn't Brown then stay on in No 10?

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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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: www.oldmutualwealth.co.uk/ products-and-investments/ pensions/pensions2015/