To win in 2015, Labour must reject Conservative austerity

Arguing that the party will be "tougher than the Tories" risks letting the Conservatives back into the game.

If the old maxim that whoever sets the agenda wins is true, then David Cameron is in even greater trouble than the polls suggest. Ed Miliband has led on numerous issues from Leveson to Syria and is defining the terms of debate again with his defence of living standards. His call for an energy price freeze has succeeded in reviving Labour's fortunes, with the Tories responding with their own pale imitation on water bills.

But if Labour has won the battle, how can it win the war? With wages down by an average of £1,500 a year since David Cameron became Prime Minister and prices outstripping earnings in 39 of the last 40 months, a clear break with austerity is needed. Yet the Tories intend the next parliament to be marked by the toughest years of cuts yet. A taste of just how bad things are going to get was provided by an unlikely source. The Conservative chair of the Local Government Association predicted councils will go bust after the next round of severe budget cuts in 2015-16.

Alternatives are needed and that’s why the Labour Assembly Against Austerity has been established. Its launch conference this Saturday will look at the further policies needed to develop the agenda around defending living standards as an alternative to the Tory plan to deepen austerity. Its launch statement has already won the support over 20 MPs and over 500 councillors and activists.

While Ed Miliband is reflecting the public mood, those in our party arguing that Labour needs to reject policies such as a Living Wage are out of touch with the majority. After years of rip-off energy policies and crowded and expensive trains, the public wants more action against these companies who abuse their monopoly position to win super-profits for the few. From soaring payday loan use to growing NHS waiting lists, millions have a story to tell on how austerity is making life tougher.

Labour has everything to gain by promoting more polices that take on vested interests and the failed cuts agenda. Conversely, arguing that Labour will be "tougher than the Tories", as some shadow cabinet ministers recently have, will let the Conservatives back into the game.

Polls show that Labour has a strong lead over the Conservatives on being best able to provide jobs, keep prices down and improve living standards. It’s by offering a progressive economic alternative to austerity that it can best reach out to a broad coalition of voters left worse off by the coalition.

Cat Smith is Labour PPC for Lancaster and Fleetwood

Ed Miliband with David Cameron during the service to celebrate the 60th anniversary of the Coronation of Queen Elizabeth II at Westminster Abbey. Photograph: Getty Images.

Cat Smith is Labour PPC for Lancaster and Fleetwood

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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/