Grant Shapps dismisses UN housing expert as "a woman from Brazil"

The Conservative chairman brands Raquel Rolnik an "absolute disgrace" after she warns that the bedroom tax is having a "shocking" effect on the vulnerable.

After the United Nations' special investigator on housing, Raquel Rolnik, visited the UK and warned that the bedroom tax was having a "shocking" effect on the vulnerable and should be abolished, one might hope that the government would engage with her concerns. 

Rolnik, a former urban planning minister in Brazil, said of the measure, which reduces housing benefit by 14% for those deemed to have one "spare room" and by 25% for those with two or more, "I was very shocked to hear how people really feel abused in their human rights by this decision and why – being so vulnerable – they should pay for the cost of the economic downturn, which was brought about by the financial crisis. People in testimonies were crying, saying 'I have nowhere to go', 'I will commit suicide'."

She added on the Today programme this morning that "there was a danger of retrogression in the right to affordable housing in the UK. 

But rather than addressing these points, Grant Shapps, the Conservative chairman, chose to launch a crude rant against Rolnik. The former housing minister told Today that her comments were "an absolute disgrace" and questioned why "a woman from Brazil" - "a country that has 50 million people in inadequate housing" - was lecturing British ministers. The answer, of course, is that she is representing the UN, not the Brazilian government, and that the coalition has imposed a policy that is causing untold harm to the poorest and most vulnerable families. Shapps added that he was writing to the UN Secretary General to "ask for an apolology and an investigation into how this came about". 

On Today, Rolnik rightly singled out the effect the policy is having on the disabled. For many of these families, this additional space is not a luxury but a necessity. A disabled person who suffers from disrupted sleep may be unable to share a room with their partner, likewise a disabled child with their brothers and sisters. The same applies to those recovering from an illness or an operation. After months of pressure from campaigners, the government announced that families with severely disabled children would be exempt but the majority of the 670,000 tenants due to be affected will still lose out, including hundreds of thousands of disabled families.

Ministers have defended the measure on the basis that it will encourage families to downsize to more "appropriately sized" accommodation but in doing so they have ignored the lack of one bedroom houses available. In England, for instance, there are 180,000 social tenants "under-occupying" two-bedroom houses but fewer than 70,000 one-bedroom social houses to move to. Housing experts have warned that the £490m the government hopes to recoup could be reduced or even wiped out as families are forced into the private sector, where rents are higher, leading to even greater pressure on the housing benefit budget.

The question for Labour remains: will you scrap it? At PMQs last week, fixing his glare at the party's frontbench, David Cameron scornfully remarked: "You have ranted and raved about the spare room subsidy. Are you going to reverse it? Just nod. Are you going to reverse it? Yes or no? Absolutely nothing to say, and weak with it."

But as I've previously reported, the party will almost certainly pledge to scrap it in advance of the general election, with an announcement possibly coming at next month's conference. The UN's warnings provide Miliband with the political cover he needs to act. 

Conservative chairman Grant Shapps 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/