Labour tuts at the Tories' "public school-boy games" over Europe

The afternoon's Europe debate is purposely designed to discomfit Labour. But Miliband's high-minded opposition is a risky strategy.

Parliament will this afternoon debate Britain’s relations with the European Union. The argument, it is safe to say, will not be terribly focused. The motion is that "this House has considered the matter of Europe." Doubtless, by the end of the day, after a fashion, it will have.

Of course the real purpose of the session – called by the government – is to allow Tory MPs to flaunt their newfound unity and to jeer at Labour discomfort. Now that the Prime Minister has promised a referendum on the UK’s membership (which is very popular with his backbenchers) and Ed Miliband has resisted doing the same (which makes many on his side uneasy) the Conservatives feel they are finally on the front foot on European issues and intend to plant their other foot into the opposition as hard as they can.

There are people on the Labour and the Lib Dem side who despairingly agree with the No. 10 analysis. One senior Labour figure calls his party’s position "ridiculous" on the grounds that "we can’t go into an election in opposition to the people." A Lib Dem strategist comments wryly that Cameron’s manoeuvre means effectively that "he has adopted pretty much the position that we had at the last election." (Clegg is the only major party leader with a pedigree of promising in/out EU plebiscites.)

There is residual confidence in the Miliband and Clegg camps that Cameron’s European position will unravel when it bumps into practical obstacles to delivering a deal in Brussels that Tory MPs can stomach. (As a sign of trouble on the horizon, Germany’s foreign minister has fired a clear warning shot at Downing Street.) Besides, Tory MPs are never satisfied with Cameron for long; some new grievance comes along soon enough.

But since the Prime Minister’s speech last week had a noticeably tonic effect on the party it is easy to see why Downing Street has decided to pour out another dose of the same heady brew. Labour’s approach to all this is, I gather, to play it long and high-minded. Miliband knows that Cameron’s position is designed exclusively by the short-term demands of party management and fear of Ukip. That, the Labour leader calculates, is a weak position whichever way you look at it. Under such circumstances, when the government is caught up in desperate short-term tactics, the opposition should be in the business of looking far-sighted and responsible – a sensible government-in-waiting.

Miliband’s aides are keen to point out that the very existence of today’s debate is a sign of panicky tactical machination in Downing Street. Why, they ask, should parliament spend its time kicking around the idea of a referendum that currently only exists in the hypothetical realm of a Tory majority government in 2017. Are there no more pressing foreign policy issues around? (Clue: Cameron himself is in Algeria this afternoon.)

It is all rather reminiscent of George Osborne’s decision to confect a separate Welfare Benefits Uprating Bill, carved out of the many announcements in last December’s Autumn Statement. The underlying policy – a real terms cut to the rate at which social security payments annually rise – did not require its own triumphal procession through parliament. The Bill was devised entirely to discomfit Labour and generate as much heat as possible around the question of the opposition’s addiction to welfare profligacy. (As it turned out, the public mood was more nuanced, with some evidence of a backlash against the Chancellor appearing to relish the prospect of picking poor families’ pockets.)

The view from Team Miliband is that this afternoon’s Europe debate is just another example of Cameron and Osborne playing, in the words of a senior aide, "snarky little public school-boy games" when they should be thinking of ways to fix the economy and look after the nation’s long-term strategic interests. It is a fair point. But, whether Miliband likes it or not, much of what goes on in the Palace of Westminster resembles games of varying degrees of shabbiness and cynical subterfuge. Voters don’t particularly respect that aspect of our politics – most of the time they don’t even notice. But tutting in disapproval from the sidelines in the hope of looking statesmanlike is a risky strategy in any competition.

Labour leader Ed Miliband addresses workers at Islington Town Hall. 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/