Cameron is preparing for defeat over Leveson

The PM's repeated references to "a hung parliament" suggest that he expects Labour and the Lib Dems to combine forces and defeat him in Monday's vote.

After months of trying and failing to reach agreement on a new system of press regulation, David Cameron has decided to call Ed Miliband and Nick Clegg's bluff. A Commons vote will now be held on Monday night on his proposed Royal Charter model, with government amendments submitted to the crime and courts bill in order to "bring this to a head". 

At his press conference at Downing Street, Cameron dared Labour and the Lib Dems to support him or being their forward own rival amendments. "They can back my amendments and support this Royal Charter to secure a workable new system," he said, "or they can grandstand and end up with a system that I believe won’t work". Cameron later confirmed that Tory MPs would be whipped "in the normal way" and that, were statutory regulation introduced, a majority Conservative government would repeal it.  

The key question now is whether Labour and the Lib Dems will combine forces to defeat Cameron on Monday. With 315 MPs between them, to the Tories' 304 (excluding Speakers), they have the numbers to do so. There are a small number of anti-Leveson Labour MPs (such as David Blunkett, Frank Field, Kate Hoey and Gisela Stuart) but they are outweighed by the larger group of pro-Leveson Tories. A total of 68 Conservative MPs have publicly expressed their support for state-backed regulation, although some have since backed Cameron's stance. 

Labour and the Lib Dems have refused to say how they will vote on Monday, with both expressing their surprise at Cameron's decision to break off the cross-party talks. One Labour source told me that the talks had been "making progress" and that the party still "hoped to reach agreement". 

A Lib Dem spokesman said: "the prime minister has unilaterally decided to pull the plug on cross-party talks. We are still prepared to work with politicians of all parties, including the Conservatives, who want to work with others to implement Leveson." 

That last line is significant. It suggests that the Lib Dems are prepared to combine forces with Labour and any Tory rebels in order to vote for state-backed regulation. Since Leveson lies outside of the coalition agreement, collective responsibility will not apply in the usual fashion, allowing the Lib Dems to oppose the Tories. 

During his press conference, Cameron pointedly (and unusually) referred to the fact that parliament is hung. "Look, we have a hung parliament," he said. "In the end, parliament is going to have to decide. Parliament is sovereign." Those are not the words of a man confident of victory. With no Commons majority for his position, the PM is preparing for defeat.

Update: Ed Miliband has just responded to Cameron's announcement, stating that he and Nick Clegg  may "have to go above David Cameron’s head and work with other Conservative MPs".

Miliband repeatedly name-checked Clegg, suggesting that he is confident of a Labour-Lib Dem alliance on Monday. 

Protestors wear papier mache heads in the likeness of Rupert Murdoch and Prime Minister David Cameron outside the Queen Elizabeth II centre. 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/