Eastleigh shows why Labour-Lib Dem tactical voting will matter in 2015

With the Tories in second place in 38 of the Lib Dems' 57 seats, Labour will need to consider whether to tacitly advise its supporters to vote for Clegg's party.

The first poll on the Eastleigh by-election, courtesy of Lord Ashcroft, suggests that the contest will be as tight as expected. The Conservatives are in the lead on 34 per cent, three points ahead of the Lib Dems, who have held the seat since 1994 (another by-election). But when all responses are included, rather than those certain to vote, the positions are reversed, with the Lib Dems three points ahead of the Tories (32-29). The challenge for Clegg's party, which holds all 36 council seats in the constituency, will be getting out its vote. 

Labour is in third place on 19 per cent, an increase of nine points since the general election, but far behind the Lib Dems and the Tories. On last night's edition of This Week, Alan Johnson bluntly declared: "Labour aren't going to win." 

Among other things, then, Eastleigh is a reminder that tactical voting will be a major issue in 2015. Indeed, if the Conservatives win on 28 February, it will become an issue immediately. The Tories are in second place in 38 of the Lib Dems' 57 seats and half of those on its target list are held by Clegg's party. If Labour is to prevent the Tories from decapitating scores of Lib Dems, it will need to consider whether to advise its supporters to cast tactical votes. In 2010, Ed Balls and Peter Hain both argued that Labour supporters should consider lending their votes to the Lib Dems in seats where the party couldn't win. But after five years of Clegg and co. acting as the Tories' "accomplices", it is doubtful whether many Labour figures will repeat this call. 

The biggest electoral headache for the Conservatives remains that any collapse in the Lib Dem vote will work to Labour's advantage in Tory-Labour marginals, as was shown in the Corby by-election. If this patten is repeated at the general election, the Tories stand to lose dozens of seats - there are 37 Con-Lab marginals where the third place Lib Dem vote is more than twice the margin of victory. 

If they are to stand any chance of winning a majority at the next election or even remaining the largest single party, the Tories need to hope for a partial Lib Dem recovery.

Nick Clegg with Ed Miliband at Buckingham Palace to mark the Duke of Edinburgh's 90th birthday on June 30, 2011 in London. 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: www.oldmutualwealth.co.uk/ products-and-investments/ pensions/pensions2015/