Gove claims Clegg is blocking Tory policy due to Lib Dem leadership plot

Clegg's opposition to new childcare ratios is due to "a campaign" by Vince Cable's ally Lord Oakeshott to oust him, says Gove.

As he demonstrated on The Andrew Marr Show this morning, Michael Gove, a former Times journalist, has lost none of his talent for generating headlines. In the course of 10 minutes, he suggested that a Lib Dem leadership plot was the reason Nick Clegg was blocking plans to relax childcare ratios, confirmed that he would vote "no" if an EU referendum was held today and said that he would abstain when the Commons votes on a Tory amendment criticising the absence of a referendum bill from the Queen's Speech.

First, then, on Clegg and childcare. Gove suggested that his opposition to Liz Truss's plan was almost entirely due to the attempt by Vince Cable's ally Lord Oakeshott to oust him as leader. He said:

I don't think we can understand Nick Clegg's position without also appreciating the position that he's in because of internal Lib Dem politics...there's a campaign at the moment being led by Matthew Oakeshott, the Liberal Democrat in the Lords, to try to destabilise Nick Clegg because Matthew Oakeshott wants Vince Cable to succeed him

It's hardly a secret that Oakeshott wants Cable installed as Lib Dem leader but no Conservative cabinet minister has ever referred explicitly to this fact. Clegg, who outlined in detail his concerns over the childcare plans on his LBC show earlier this week, is likely to be furious at the suggestion that his position is motivated by politics, not principle.

But the mischievous Gove, artfully seeking to turn the conversation on to Lib Dem divisions, went on:

Nick, understandably, needs to show Lib Dems that he's fighting only need to look at the newspapers today to see that Lord Oakeshott is on maneouvres, he's trying to promote Vince. It's understandable that within the Lib Dems these things go on. Nick has to show a bit of leg, as it were, on these issues.

On Europe, asked if he would vote to leave the EU if a referendum was held today (as the Mail on Sunday reported last year), Gove confirmed for the first time that he would. He told James Lansdale:

Yes [I would vote to leave the EU], I'm not happy with our position in the European Union

After Nigel Lawson's intervention earlier this week, Gove's words represent another significant escalation of tensions over this issue. Tim Montgomerie lists Iain Duncan Smith, Theresa Villiers, Chris Grayling, Justine Greening, Philip Hammond, Oliver Letwin and Francis Maude as other "definite or probable EU Outers". All of these ministers (and others) will now come under pressure to say whether they, like Gove, would also vote "no" in a referendum today.

Gove added that while there would be "certain advantages" to being outside the EU (another significant admission), "the best deal" would be for Britain to successfully renegotiate its membership. David Cameron's hope is that the plausible threat of withdrawal will make it easier to achieve that.

Update: Here's how Oakeshott has responded to Gove.

Education Secretary Michael Gove speaks at last year's Conservative conference in Birmingham. 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/