The Tories are ramping up the price of Clegg's boundary sabotage

Keeping the moribund review alive is part of a wider strategic game of coalition negotiation.

The Guardian has an interesting story this morning on Conservative attempts to resuscitate plans to redraw parliamentary boundaries. Unnamed Tory sources have suggested recruiting MPs from smaller parties – Democratic Unionists, Welsh and Scottish Nationalists – to help tip a vote in favour of redrawing constituency lines ahead of the next election, now that the Lib Dems have demonstrated their intent to kill the idea.

The other parties sound pretty tepid towards the idea, but they leave some room for crude pork-barrel bargaining. That is how small parties roll if they want to get things done.

Senior Tories are clearly desperate to salvage the boundary changes, which could make a difference of as many as 20 seats in their favour. But I sense that, amid all this frantic reaching down behind parliamentary sofa cushions for spare votes, there is a recognition that the 2015 general election will be conducted on existing boundaries. The candidate selection process is under way, strategists need to think about targeting resources, incumbents want to get on with the business of digging themselves in for a defensive battle.

So what is really going on here? Partly, the argument is about preserving the boundary review from total oblivion. A crafty manoeuvre in the Lords has meant that Labour and Lib Dem peers could kick the whole thing beyond 2018. Six years hence is as good as never in politics.

So the Tories will at least want to put pressure on Nick Clegg to find some compromise that means the changes can be at least settled in principle with implementation only deferred until just after 2015.* That way the Lib Dem leader gets to retain the glory of the bloody nose he inflicted on Cameron as revenge for the PM’s failure to secure reform the House of Lords but the Tories get the reforms they badly need for the long term onto the statute book.

Leaning on Clegg certainly seems to be the motive for leaking and briefing the Tories’ various plans to keep the boundary review alive. Not so long ago a far-fetched idea surfaced according to which the Lib Dems might reverse their opposition to the new constituencies in exchange for state funding of political parties. It was a non-starter and Clegg’s allies hosed it down with scorn. The whole purpose of floating it at all appeared to be to maximise Lib Dem discomfort and flush out some measure of their biddability.

After all, the Tories have been in coalition for long enough to know the Lib Dems are up for negotiation on most things. Downing Steet may initially have underestimated Clegg’s determination to retaliate over Lords reform but they know there will be other things he wants and things he needs to show his party and his country as prizes. The Tories must also know, however, that it would take some quite spectacular policy bauble - as yet unimagined - to permit Clegg to turn around and say, on second (technically third) thoughts, he is backing the boundary changes again.

There are parallel policy negotiations and horse trades going on all the time. In the run-up to the Autumn Statement – a mini-review of spending priorities due on 5 December – those talks are getting more urgent and heated. It is worth noting, in that context, that one effect of briefing that the boundary changes are not yet dead is to remind everyone of their importance to the Tories and, by extension, the heavy penalty Clegg has inflicted for the loss of his precious elected Senate. In other words, these stories and rumours about boundary deals ramp up the sense of Tory grievance, which is one way to shift the balance of power in various other negotiations. "Sorry Nick", say Cameron and Osborne. "But you hit us so hard on that boundary changes thing, you’re not seriously going to kick up a fuss over these welfare cuts/pesky windmills etc. are you? Be reasonable!"

I don’t doubt that the Cameron and Osborne are determined to reform parliamentary boundaries. Nor do I doubt that they’d like it to happen in time for the next election. It won’t and they must know as much. They can, however, make absolutely sure the Lib Dems know that, in smashing this most precious Tory policy, they have used up a very large chunk of their coalition bargaining chips and are in no position to come asking for policy favours.

*This distinction is a bit of a red herring as it transpires. See first comment below.

Update: A senior Lib Dem source has been in touch.


Nick Clegg pledged to veto the proposed boundary changes after David Cameron abandoned plans for House of Lords reform. 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: products-and-investments/ pensions/pensions2015/