Three ways the Lib Dems could fail themselves if rumours are right

Rejection of “progressive alliance”, bottling out of cabinet places and electoral reform with a gove

This is clearly a very time-sensitive post, so let's get to the point. If the rumours about the Clegg-Cameron agreement are correct, there are three potential ways in which it would fail both progressive politics and, in the long term, the Liberal Democrats themselves.

1. By avoiding a "progressive alliance" with their natural bedfellows in Labour and others, the Lib Dems will have let go of the possibility of not just proportional representation and a number of seats -- perhaps six or seven -- in the cabinet. They will also have failed in the immense historic possibility of reunification between two movements -- Labour and Liberal -- that belong together and that were, once, together. From such a reunification, there might have flowed a fairer Britain, if not a fairer world, with a more progressive tax system and a more ethical foreign policy.

2. Much is being made of this bizarre concept of "supply and confidence", under which the Lib Dems would prop up a minority Tory government, passing through the "emergency Budget". The Tory-supporting press in particular is excited about it. Not surprising. But what is not clear is how it benefits the Lib Dems, other than to retain an element of their already heavily qualified "purity" as they avoid becoming tainted by a party with which they have been in intense talks for days. It is hard to see how a one-party government of the Tories would support the progressive politics advocated by people such as Charles Kennedy. Further, it would mean the Lib Dems have bottled out of sitting in the cabinet and making politics better and more plural. I do know some anti-Tory voters who are happy for a Tory-Liberal coalition, but -- far away from the Westminster village -- it has not occurred to them that there will not be any Lib Dems in the cabinet. "Supply and confidence", they would neither understand nor welcome.

3. Even if there is some sort of perceived Tory concession on electoral reform, it would be a mirage, not least because the Tory government would campaign for a "No" vote, resulting almost certainly in just that, and in the Lib Dems having squandered their most real chance in decades for genuine change.

Nonetheless, some version of the above seems likely to happen, if rumours are to be believed. If so, a progressive moment this is not.

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James Macintyre is political correspondent for 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/