Shadow cabinet fact-finding missions across the pond

Recess has allowed a few key figures the chance to attend the US conventions.

One of the very few consolations of political opposition is the time it affords to think. The pace of government often precludes development of new ideas and dispassionate pondering of the situation. The point at which ministers tend to get a new perspective on things usually coincides with the moment they are sacked. Hence the quaint convention of the "summer reading list" - the titles that it is recommended MPs read by the pool in their precious few weeks of leisure: a new biography of an eminent Victorian; a book by an American neuroscientist promising a revolution in economics and society encapsulated in a single abstract noun (e.g. Banality: Why Saying Nothing is the New Everything); the much-praised diaries of a witty but ultimately unsuccessful politician, recently retired or deceased.

But the real hardcore do not satisfy themselves with reading books about politics and economics on their summer holidays. Oh no. The truly dedicated take the opportunity, when things get quiet at Westminster, to immerse themselves in other countries' politics. Lord Steward Wood, one of Ed Miliband's closest advisors and a highly influential figure in the shadow cabinet, is currently at the Republican Party National Convention in Tampa, Florida. He is also going to the Democratic Party gathering next week in Charlotte, North Carolina. Also at that jamboree will be Douglas Alexander, shadow foreign secretary.

America has always had a unique hold on the imaginations of British politicians and the current generation at the top of the Labour party have all passed through US colleges. Ed Miliband took a sabbatical from his time in Gordon Brown's treasury to teach at Harvard. Ed Balls was a Kennedy Scholar at Harvard after graduating from Oxford. Douglas Alexander studied for a year at the University of Pennsylvania - and worked on Michael Dukakis's failed bid for the White House.

It isn't yet clear what Labour's top brass hope to learn from sitting in the stands in the opening rounds of this year's presidential election. There isn't any doubt about which side Miliband will be rooting for. (The same cannot be said for David Cameron - as I noted here.)

The tone and structure of American political debate seems ever more removed from the kind of discourse that works in Westminster. The macroeconomic dividing lines about debt, deficit and stimulus are not dissimilar; the deep lagoons of culture war venom are wholly alien. But then the main reason top British opposition politicians go to visit US political conventions is pretty simple: because it is great theatre, because it is fascinating and because - unburdened by government jobs - they can.

Ed Miliband meeting Barack Obama in 2011. Photograph: Getty Images

Rafael Behr is political columnist at the Guardian and former 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/