Labour will want to keep its Trident options open

A half-hearted commitment to renewal would make an easy concession to Lib Dems in future coailtion talks.

As with so many policies, Labour’s official position on whether or not it is worth funding a like-for-like replacement for the Trident submarine-based nuclear missile system is under review. More specifically, the view is that the party supports Britain having a nuclear deterrent. (Of course it does. The party isn’t about to revisit early 80s-style unilateral disarmament.) But the question of whether or not that requires having big Cold War-design submarines lurking in the seas ready to retaliate against the Soviets remains undecided.

So it is naturally a matter of interest when Des Browne, a former Labour defence secretary, co-authors an article in the Telegraph suggesting Trident may have had its day; not least because he championed the opposite view in government.

At the moment, on the government side, the matter is also subject to a review, headed by Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury. The very existence of that process is held up by Lib Dems as a mini-policy triumph, effectively thwarting the Tories’ hopes of prompt Trident renewal in this parliament. Scrapping the system is one of those totem Lib Dem policies in which activists take an especially vigorous interest even if the public is largely uninterested.

Labour, meanwhile, are ambivalent. There is still a whiff of CND around the party, but there is also a residual fear from the macho New Labour era of looking like a bunch of weak-kneed lefty pacifists. The Browne position is eminently reasonable: if there is a workable, cheaper alternative that retains some nuclear deterrent capacity, it would be perverse for a cash-strapped government not to take it.

That isn’t to say Labour is ready to adopt such a position. But it is worth noting that a final decision isn’t due before 2016 and it certainly won’t be taken this side of an election. That leaves Labour with the option of a manifesto pledge keeping all Trident options open. It probably hasn’t escaped the leadership’s notice that a vague, half-hearted commitment to Trident would also make an easy concession in the event of coalition negotiations with the Lib Dems in a hung parliament – a concession the Tories could not make.

A Trident submarine makes its way out from Faslane Naval base in Scotland. 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/