Tory rebels set Cameron a deadline - but it's Osborne who's in greater danger

Conservative MPs are planning to demand the removal of Osborne as Chancellor if the economy fails to recover by May.

If David Cameron hoped that his pledge of an in/out EU referendum would lead to a cessation of hostilities in the Tory party it looks as if he was sorely mistaken. Little more than a week after Cameron's speech, Conservative MPs are reacquiring their taste for regicide. The Guardian reports that the Tories are prepared to force a vote of no confidence in the PM unless the party's poll ratings improve by the summer of 2014. One minister is quoted as saying: 

This is not necessarily about waiting until 2015 and seeing if David Cameron loses. This is about being ready for the moment when the party realises that Cameron is not a winner.

If this sounds outlandish, it's worth remembering that just 46 MPs - 15 per cent of the Conservative parliamentary party - are required to write to the chairman of the 1922 Committee, Graham Brady, to trigger an automatic confidence vote. 

One MP said: "There is a core of MPs that is determined to get rid of Cameron right now. They think he lost the last election, they think he cannot win the next election and maybe doesn't even want to win the election. They think he just likes the idea of being a coalition prime minister.

"While this group are wrong to think of a move now, there would be support for a contest if there is no movement for the party by 2014. There would be no problem in drumming up 46 letters to Graham Brady at that point. I could name them. I would support it."

Cameron's cause is not helped by the fact that any bounce from his speech appears to have already dissipated. Labour's lead fell to just six in the weekend polls but it had risen to nine by the middle of the week and today it stands at 12, back at the level seen before Cameron's referendum pledge.

But it's not just the PM that MPs have in their sights. The Daily Mail reports that the rebels are prepared to demand the removal of George Osborne as Chancellor if the economy fails to show signs of recovery by the time of the local elections. "The idea is that you deliver an ultimatum to the PM telling him to get rid of George," one MP is quoted as saying.

Another adds: "You wouldn’t get 80 people supporting Adam Afriyie for leader but you might get 80 or 100 people saying get rid of George." 

But it is hard to see Cameron acquiescing to this demand. Unusually for a Prime Minister and Chancellor, Cameron and Osborne are close friends, with Osborne godfather to Cameron's son, Elwen. Tory MPs, however, will remind the Prime Minister of his response when asked back in 2010 if he could ever sack Osborne. 

Yes. He is a good friend, but we’ve has that conversation a number of times over the past four years.

To be fair to George he said ‘If ever you want to move me to another job, it is your decision and it is your right’.

The assumption that Osborne and Cameron rise and fall together most likely remains correct. But if the sacrifice of Osborne is the price for saving his leadership, the PM may yet be forced to act. 

Conservative rebels are preparing to write to David Cameron demanding the removal of George Osborne if the economy fails to improve. 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/