Byelection likely after Labour suspends MacShane over false invoices

Labour acts after Commons standards and privileges committee calls for MacShane to be suspended from Commons for 12 months.

It didn't take Labour long to act after the Commons standards and privileges committee recommended that Denis MacShane be suspended as an MP for 12 months for submitting 19 false expenses invoices totalling £12,900. The party has immediately suspended the former Europe minister and has signalled that his "career as a Labour MP" is over. A party spokesman said:

These are very serious findings concerning Denis MacShane and we accept his statement this morning that his career as a Labour MP is effectively over. In the light of the report’s recommendations to the House, the Labour party has suspended Denis MacShane with immediate effect, pending a full NEC enquiry. We will be talking to Denis MacShane about his future and the best course of action for him and for his constituency.

MacShane previously had the Labour whip withdrawn after a police investigation into his claims was launched, but had it reinstated when Scotland Yard announced in July that it would be taking no further action.

The MP has so far refused to say whether he will step down, stating that he is "consulting family and friends" as he reflects on his future. Here's the statement published on his website:

I am shocked and saddened that the BNP has won its 3 year campaign to destroy my political career as a Labour MP despite a full police investigation which decided not to proceed after investigations and interviews. I am glad the Committee notes that there is no question of personal gain.

Clearly I deeply regret that the way I chose to be reimbursed for costs related to my work in Europe and in combating anti-semitism, including being the Prime Minister’s personal envoy, has been judged so harshly.

I remain committed to work for progressive values, for Britain playing a full part in Europe, and for combating anti-semitism even though I can no longer undertake this work as a Labour MP. I am consulting family and friends as I consider my position and study the full implications of the report. I am obviously desperately sorry for any embarrassment I have caused my beloved Labour Party and its leader Ed Miliband whom I greatly admire.

MacShane will surely conclude that he has to resign, rather than leave Rotherham without representation in parliament for a year. Equally, the verdict of the committee, which said this was "the gravest case which has come to us for adjudication, rather than being dealt with under the criminal law", is so damning that he can no longer reasonably remain an MP. It said:

We accept that Mr MacShane is widely acknowledged for his interest in European affairs, and the funds he claimed could be said to have been used in supporting that interest. Those activities may have contributed to his Parliamentary work, albeit indirectly. He has expressed his regret, and repaid the money wrongly claimed. But this does not excuse his behaviour in knowingly submitting nineteen false invoices over a period of four financial years which were plainly intended to deceive the Parliamentary expenses authorities. This is so far from what would be acceptable in any walk of life that we recommend that Mr MacShane be suspended from the service of the House for twelve months. This would mean he lost his salary and pension contributions for this period.

MacShane would be wise to announce his resignation today, rather than cling onto an office he can no longer credibly hold.

UPDATE 2/11/2012 16.35

MacShane has announced that he will be resigning as an MP. The BBC's James Vincent reports on Twitter that MacShane made the following statement:

"I hope by resigning I can serve by showing that MPs must take responsibility for their mistakes"

Denis MacShane, pictured whilst Europe minister in 2005. Photograph: Getty Images.

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: products-and-investments/ pensions/pensions2015/