Clegg’s contradictions

The Liberal Democrats need to sort out their line of attack on Labour’s “deficit deniers”.

One of the (many) downsides to the Liberal Democrats being in coalition with the Conservatives, and Lib Dem press officers like Lena Pietsch having to serve under Tory spinners like Andy "Bully" Coulson, is that the Lib Dems have had their talking points written for them, word for word, by their Conservative coalition partners.

Take the deficit. I've blogged before about Clegg and Cable's humiliating and inexplicable U-turn on the issue of spending cuts and the timing of deficit reduction, but have you noticed how Tory-esque their attacks on Labour's economic policies seem to have become in recent weeks? The whole Osbornian "deficit denier" stuff has been swallowed wholesale by the Lib Dem front bench.

Last month, in a joint press conference with the Tory party chair, Sayeeda Warsi, the Energy Secretary, Chris Huhne, said it was "inexcusable" that none of the Labour leadership contenders had come up with any policies to tackle the record Budget deficit. And on Sunday, Danny Alexander wrote to the Labour leadership candidates, accusing them of "opportunism rather than economic competence".

And in yesterday's PMQs, stand-in Nick Clegg, the deputy PM, told the Tory MP Mark Pritchard::

They [Labour] were irresponsible in government, and they are now living in denial in opposition.

He told the Labour MP Nic Dakin:

One hundred thousand members of the public have made suggestions about how we can try to bring some sense to our public finances without hitting the vulnerable and without hitting front-line public services. Have we heard a single suggestion from anyone on the opposition benches? Not a single suggestion.

But, in the same session of PMQs, he said to the Labour MP Joan Walley:

I simply ask the Honourable Lady and her colleagues whether they have any qualms about the fact that her party and her government announced £44bn-worth of cuts but never had the decency or honesty to tell the British people where those cuts would fall.

Hang on! He accepts that Labour had planned "£44bn-worth of cuts", but accuses Labour leadership contenders -- including David Miliband, who is sticking to the Brown/Darling deficit reduction plan -- of being in "denial". Contradiction?

And he tells Dakin (above) that we have not "heard a single suggestion from anyone on the opposition benches" about how to fix the public finances, despite being well aware of the various proposals that have emerged from the five leadership candidates during the course of the campaign.

Take David Miliband, for example, who wants to abolish charitable status for private schools and introduce a mansion tax.

Take Ed Miliband, who wants to retain the bankers' bonus tax.

Take Ed Balls, who wants to introduce a 50p tax rate on those earning more than £100,000.

Take Andy Burnham, who wants to end the ring-fencing of the NHS budget.

Take Diane Abbott, who wants to scrap Trident (something the Deputy PM once wanted to do!).

Now, I accept that most of these proposals have yet to be fleshed out in detail, and none of them on their own (or, for that matter, combined) will eliminate or even halve the structural deficit, but to pretend that we've had nothing but silence from in-denial Labour leadership candidates is simply untrue and absurd.

It also, as I said, flatly contradicts his other line of defence -- Labour planned cuts, too! -- which he deployed against Joan Walley yesterday, and again on the Today programme this morning against John Humphrys.

Get your story straight, Nick!


I hear Danny Alexander refused to appear on Newsnight yesterday to debate Ed Balls. The shadow schools secretary has, of course, been praised for his grasp of economics and fiscal policy by, among others, centre-right figures such as Irwin Stelzer, Martin Wolf and Boris Johnson (!).

Check out Balls's reply to Alexander's letter to the candidates here.

You can read Mehdi Hasan's politics column each week in the New Statesman magazine.

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/