The Lib Dems' Hunt abstention is a miserable little compromise

If Clegg wants Hunt to be referred, he should vote in favour of the motion.

Nick Clegg's decision to order Liberal Democrat MPs to abstain from today's Commons vote on Jeremy Hunt is a significant moment in the short history of the coalition. With the exception of last year's vote on a DUP motion celebrating David Cameron's EU "veto", it is the first mass abstention by the Lib Dems while in government. Clegg's move was reportedly prompted by his fury at Cameron's refusal to refer Hunt to Alex Allan, the adviser on ministers' interests (the subject of the Labour motion), even after the Culture Secretary's dubious evidence to the Leveson inquiry. The Lib Dem abstention will not threaten the government's majority (although, in an indication of how seriously the Tories are taking the vote, Conservative MP Justin Tomlinson has been ordered to return from his honeymoon in Mauritius to vote) and the motion is, in any case, non-binding. But the act is rich with political symbolism. Confronted by Cameron's repeated failure to hold Hunt to account, the Lib Dems have reasserted their independence.

The Tories are still downplaying the significance of the move, with one aide noting that it is "a party political motion not government business". On the Today programme this morning, housing minister Grant Shapps said it was simply "a reminder that we have different perspectives on things." Conservative backbenchers, however, are proving less understanding and have already warned Clegg not to count on their support the next time that scandal befalls a Lib Dem cabinet minister (as it frequently does). One Tory MP described the move as "an act of war".

Labour will welcome another opportunity to exploit coalition discontent but many of the party's MPs will rightly denounce this as another "miserable little compromise" by Clegg. If the Lib Dems believe that Hunt should be referred to Allan, then they should simply vote in favour of the motion, not abstain. Once again, Clegg has said one thing (refer Hunt) and done another (abstained), the problem that has long dogged his leadership.

The defence proffered by his office is that he did not want to support a party (Labour) with a history of "cosy" relations with the Murdochs - the Lib Dems are proud of their status as the one major party never to fall under the spell of the Wizard of Oz. But this backwards-looking defence does not bear scrutiny. Labour is now led by a man who has repeatedly apologised for his failure to intervene earlier over phone-hacking and who led the charge against News International last summer. Another explanation put forward this morning is that the Lib Dems cannot vote with a party that "lied about" the Iraq war. Again, this defence makes no sense when one considers Miliband's early opposition to the war.

From a political perspective, Clegg's decision to abstain is the worst of all possible worlds. He will earn the ire of the Tories, whilst receiving no compensatory support from Labour. In the meantime, attention moves to the Leveson inquiry, where one Nicholas William Peter Clegg is appearing from 10am.

Nick Clegg has ordered Liberal Democrat MPs to abstain on today's Commons vote on Culture Secretary Jeremy Hunt. Photograph: Getty Images.

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/