Some post-Question Time clarifications

I seem to be the Marmite man. People love me or hate me!

Thanks to all those people who posted messages of support, praise or congratulations either on this blog, the Question Time blog or on Twitter after I made my debut on that show last night. But as one tweeter pointed out, "@ns_mehdihasan is like Marmite." Indeed. I seem to have upset, annoyed and angered lots of people on the right, as well countless Lib Dem apologists. What can I say? That's life. Don't take it so personally. Let's agree to disagree.

QT is a great show and I had great fun appearing on it (even though Iain Dale thinks I didn't smile enough. Sorry, Iain!). But it's not a format that lends itself to forensic examination of policies or arguments, and despite the fact that I speak at ten words per second (thanks, David Prescott!), even I couldn't challenge or clarify some of Simon Hughes's claims.

For the record, I like and admire Simon Hughes and felt sorry that he had to defend the indefensible. Where is David Laws when you need him, eh? Oh, and while I'm at it, Michael Heseltine is my second-favourite Tory -- after Ken Clarke, who's my favourite (I know, I know, but I just can't help it!). It's a shame I've had to have a go at both of them in recent BBC panel debates. Where's Michael Gove when you need him?

So here are some post-QT clarifications:

1) Simon Hughes kept pointing to the Tory/Lib Dem proposal to raise the income-tax threshold to £10,000. He seems to believe this is a perfectly progressive policy. But he knows, as the IFS and others have pointed out, that such a policy will cost £17bn, of which only £1bn will go to the lowest earners. He also knows that the poorest people in Britain will not get a penny from this policy because they tend to be out of work and not paying any income tax to begin with. Oh, and as the Fabians' Tim Horton has pointed out, this policy is no longer funded by redistributive measures such as the mansion tax and the scrapping of higher-rate pension relief.

2) Hughes could not address the main issue: why did the Lib Dems agree to Tory cuts in spending this year, despite campaigning against such cuts? Aren't such cuts, to quote Vince Cable, a "smokescreen" for public-sector job losses? This is an unforgivable concession, in my view.

3) Talking of concessions, Hughes claimed that Labour had offered nothing and that the Tories had moved the most. I'm confused. In the end, the Tories adopted the Labour manifesto pledge to legislate for a referendum on AV (not PR!) but promised to campaign against AV in the actual referendum itself. How is that a better deal than a Labour referendum on AV which the Labour Party actually then backs? He also got lots of applause on the topic of civil liberties -- but omitted to mention that Labour negotiators had offered to drop ID cards in return for a deal with the Lib Dems.

4) I'm not an opponent of coalitions or coalition politics. I had hoped for a hung parliament because (i) I didn't believe Labour had earned the right to govern on its own, after 13 years of ups and downs in office, and (ii) I naively assumed that such a scenario might bring about a progressive realignment on the centre left and hasten electoral reform. I was wrong. And I'm angry that a coalition of Labour tribalists and Lib Dem power-seekers betrayed the progressive, anti-Tory majority in this country. But let me be clear: unlike Melanie Phillips, I have no problem with coalitions and think coalition government, in theory, can actually have a positive impact on the nation and on the economy. I just think this coalition is a coalition of convenience, unprincipled and unstable. But I hope, for the sake of the country, that I'm wrong and the optimists and apologists are right.

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: products-and-investments/ pensions/pensions2015/