In defence of the Lib Dems

What's the point of the Lib Dems? Here's what.

Mehdi Hasan asks "what's the point of the Lib Dems?" Citing five issues on which, in his opinion, the party has "sacrificed their distinctive beliefs and principles and received little in return," Hasan claims we're irrelevant. So what is the point of the Lib Dems then? To find out, he should:

1) Ask the nearly 1 million low-paid workers who have been lifted out of paying income tax altogether thanks to a Lib Dem manifesto commitment delivered in government. With the prospect of further significant reforms to come to make our tax system fairer and more progressive, this policy makes people hundreds of pounds better off in difficult times. Consider the counterfactual too - a Tory-only government cutting inheritance tax and the 50p rate for its rich pals whilst doing nothing for the low-paid. Not with Lib Dems in government.

2) Ask the millions of children, parents and teachers who are benefiting from the pupil premium & expanded childcare provision as part of the government's investment in crucial early-years facilities. Another Lib Dem manifesto commitment, delivered in government, making a real difference to the worst off and those in need of support.

3) Ask patients and doctors who've seen NHS principles protected from worst of Andrew Lansley's reforms. Of course the Health and Social Care Bill isn't yet perfect, but it's a significant improvement on the purely market-oriented reforms originally set out - largely thanks to Lib Dem conference in securing vital safeguards for accountability, integration and public health. Consider the counterfactual too - a Tory-only government turning the NHS into nothing but an unaccountable purchaser in a for-profit market. Not with Lib Dems in government.

4) Ask those who want safer banks and tough action on high pay - would either happen without Vince Cable pressing for the implementation of the Vickers reforms and the recommendations of the High Pay Commission? Consider the counterfactual too - a Tory-only government caving in to the influence of its City donors, evading the measures needed to make banking safer and tackle income inequality through transparency, accountability and stakeholder empowerment. Not with Lib Dems in government.

5) Ask the nearly 600 Labour and Conservative - or should I say, Labservative - MPs who for decades have happily aligned against Lib Dems on all five of Hasan's core issues, even if it means acting against national interest like on Europe and Iraq. Consider the counterfactual too - a Tory-only government, or Labour-only for that matter, either of whom would have removed the cap on tuition fees instead of introducing what is effectively a capped graduate tax; no attempt to reform our electoral politics as they oppose changes to the voting system, to the Lords and to party funding; likely withdrawal from the EU as either party caved in to its atavistic Eurosceptic wing; and of course the disastrous war in Iraq which both Labour and Tories enthusiastically supported against the wishes of the Lib Dems and the country as a whole.

Yes of course we want to see Liberal Democrats deliver more of our values and policies in government and to stop more Tory madness like that seen over Europe recently - that's precisely what the party's mainstream has been calling for through the Social Liberal Forum.

Prateek Buch is a Lib Dem activist and blogger

Prateek Buch is director of the Social Liberal Forum and serves on the Liberal Democrat Federal Policy Committee.

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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/