Lord Ashcroft warns the Tories: stop banging on about Europe

Conservative donor warns that the Tories will lose the next election if they obsess over Europe.

Lord Ashcroft might rank somewhere between Margaret Thatcher and Rupert Murdoch in leftist demonology but, like it or not, his political analysis is usually spot-on. His elegant and passionately sane blog on ConservativeHome this morning is a perfect example. Ashcroft warns the Tories that they must, to quote David Cameron, stop "banging on about Europe" or risk losing the next election.

He writes:

Monday's display was damaging because it suggested to ordinary voters that the Conservatives are far away from them when it comes to priorities - the most important issues facing the country, and their families. The point is not whether they agree with us over Europe: the sceptical Tory view, articulated over many years by William Hague and others, is close to the centre of gravity in public opinion. The question is whether it matters to them as much as other things matter, and the fact is that it does not.

Ashcroft is right. As I noted in my blog on Cameron yesterday, while voters share the Tories' euroscepticism they don't share their obsession with the subject. Polling by Ipsos-MORI shows that they regard the economy (68 per cent), unemployment (30 per cent), immigration (24 per cent), crime (24 per cent) and the NHS (21 per cent) as the most "important issues facing Britain". Just one per cent believe that the EU is the most important issue and only four per cent believe that it is one of the most important issues.


As the graph above shows, concern with Europe has remained consistently low since 2006. At various points in the last 20 years, such as the UK's withdrawal from the Exchange Rate Mechanism in 1992, the debate over the single currency during the 1997 election and the announcement of Gordon Brown's "five tests" for euro membership in 2003, public concern over Europe has reached significant levels. But barring another significant transfer of powers to Brussels, it seems unlikely to do so again.

Those on the right who argue that David Cameron doesn't talk enough about Europe are the mirror image of those on the left (most notably Tony Benn), who concluded, after Labour's landslide defeat in 1983, that the party lost because it wasn't radical enough. For them, Ashcroft has one message: enjoy the debate but you won't win an election.

He concludes:

Finally, some will say principle dictates that we should spend our time debating what we believe to be important, regardless of the voters (or "the polls", as they usually put it when making this point). In which case, I hope they enjoy themselves. But let's hear no more from them about that majority.

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: www.oldmutualwealth.co.uk/ products-and-investments/ pensions/pensions2015/