Osborne should beware of bolstering the Tories' anti-green wing

Voters don't see climate change as a priority, but caring about it was an emblem of Tory moderation.

I recently had a conversation with someone who has conducted a lot of political focus groups. The conversation turned to climate change and environmental policy. The context was the Conservative party’s conspicuous abandonment of green messages. Presumably, I said, this is animated to some degree by the fact that voters aren’t that interested in the subject. The economic crisis has bumped climate change lower down the priority list of public concerns – even lower than it was before. I was surprised by the answer. “It’s more than that. It’s actually a negative,” I was told. Apparently, green policies are seen by many swing voters as an expensive luxury and – worse still – a pious elite preoccupation; one of the ways that a wealthy few sneer at those without money to spare. “Have you seen how much apples cost at the farmers’ market compared to Tesco?” is a standard response.

Making people buy groceries at farmers' markets is not, of course, any party’s idea of a serious policy to tackle climate change. The point is that there is, in many people’s minds, a whole apparatus of environmentalism that is bundled up with the “green lifestyle”, which is, in turn, seen as exclusive, judgemental and expensive. (I don’t say this is true, just that it is the perception.)

That makes it rather easier to understand why the Tories – and George Osborne in particular – feel comfortable striding purposefully away from their old “Vote Blue, Go Green” slogan. The Chancellor, who doubles as Conservative campaign strategist, has surely conducted a simple cost-benefit analysis. On one side of the equation is the awkwardness of being seen to jettison what was once a high-profile policy. On the other side: an easy way to appeal to Tory backbenchers. There is a large section of the Conservative party that sees Labour-era regulations to limit carbon emissions as an onerous burden on business. (As I noted in my column this week Osborne is said, in private, to speak with undisguised irritation and contempt for the Climate Act.)

A smaller, but vocal segment of Tory opinion with important cheerleaders in the media, is unpersuaded by the science of climate change in general. And there are many MPs in rural areas who channel their constituents’ rage at the prospect of wind farms accused of blighting the landscape.

The enhanced power of that wing of the party is plainly expressed in the reshuffle elevation of Owen Paterson, a vocal opponent of wind farms, to the job of Environment Secretary. Meanwhile, a low-level war of briefings and counter-briefings is well under way between the Treasury and the Department for Energy and Climate Change (DECC) over the forthcoming Energy Bill – specifically, on the question of how incentives for investment in renewable energy are structured and how much emphasis should be placed on (unrenewable) gas as a power source. In the Spectator this week, James Forsyth reports the Prime Minister instructing John Hayes, the new Tory minister of state at DECC, to “deliver a win for our people on windfarms.” It all looks like an aggressive pincer movement against Lib Dem Energy Secretary Ed Davey. That is certainly how the Lib Dems are interpreting it.

The shift in emphasis is also provoking concerns on what is sometimes still called the “modernising” wing of the party (although increasingly Tories of all persuasions speak of that feature of the Cameron project in the past tense, some with glee, others in despair).

There are traces of angst about the party finding itself on the wrong side of a moral divide; potentially, in the long-run, on the wrong side of history. Voters might not see climate change as a big political issue, but many still recognise that it is a problem. Some Conservative MPs believed David Cameron when he said he wanted to lead the “greenest government ever” and found it a genuinely attractive proposition. For the time being, however, those eco-dissidents on the Tory benches are staying rather quiet, probably for fear of sounding sympathetic to the Lib Dems – a deeply unfashionable place to be in Conservative circles.

But there is also blunt political calculation animating concern about the Tory leadership jettisoning its green credentials before they were ever properly established. Even if voters don’t want their politicians to bang on about greenery, they haven’t forgotten that Cameron once did. The issue itself is secondary to what it says about the cavalier way in which the Prime Minister picks and chooses his beliefs. As one disillusioned Cameroon put it to me recently: “You can’t claim to be all green one minute, then forget all about it and expect people not to notice.”

This in turn feeds concerns about the influence that George Osborne has over Tory strategy. His reputation as a political chess grandmaster was lost during the Budget and hasn’t been recovered. He is more generally seen now as a relentless tactician – and a fairly crude one at that. He might see ditching green policies as a relatively cost-free way of shoring up his position with the right of the party but that doesn’t mean it makes good strategic sense.

The danger is that dismissal of environmental concerns nurtures and empowers the full-on climate change deniers in the party. That lobby then acquires the kind of fanatical and implacable character of Tory euroscepticism – an article of ideological faith rather than an agenda for practical government. Voters don’t like the European Union much, but that doesn’t mean they are wooed by a Conservative party that channels and amplifies hysterical rage against Brussels. (The issues are connected to the extent that the EU is seen as an engine of low-carbon regulation.)

What matters in terms of the fragile Tory brand is less what MPs think about Europe or the environment so much as the quixotic mania that is perceived to be driving those views. It isn’t clear how Osborne helps his party’s election prospects by being seen, almost literally, to be tilting at windmills.

Osborne is said to speak with "undisguised irritation and contempt for the Climate Act." 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: www.oldmutualwealth.co.uk/ products-and-investments/ pensions/pensions2015/