Jason Riddle, co-founder of 'Save Our Savers' lifts a giant papier mache piggy bank outside the Bank of England. Photograph: Getty Images.
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Labour must resist Osborne’s reckless pension reforms

For the sake of a day of good headlines and a few billion pounds of extra tax, the Chancellor has put years of painful progress at risk.

Today Ed Balls struggled to explain why people can’t be trusted to spend their own pension savings as they see fit. So after a rapturous reception from the right-wing press, Labour shadow ministers will be worrying that if they oppose the pension reforms they will sound patronising and risk alienating the "grey vote". But oppose them they must, for these reforms are reckless and irresponsible

Yesterday the Chancellor threw out years of painful progress in designing a secure and sustainable pension system for Britain, all for a day of good headlines and a few billion pounds of extra tax. Here are four reasons why Labour must oppose George Osborne’s annuities assassination.

1. A law that make us do the right thing: One of the good things about governments is their ability to help people smooth out spending over very long lives. This happens through tax and spending but also through regulation: the requirement to buy an annuity exists to help people spend down their pension pot in a smooth, gradual fashion over long retirements. It follows the "goldilocks" rule: not too little, not too much. Annuities stop you spending too much, too early, so you have to scrape by in late old age. This minimises the extent people have to fall back on the state, but just as importantly, it helps people lead better lives over their whole life.

Turning savings into a guaranteed monthly income also stops you sitting on your money and spending "too little". Today this is a big problem: the evidence shows that on average people in retirement don’t ‘decumulate’ their property and financial assets at all, contrary to what economists would expect. This is partly because people are insuring themselves against the risk of dying late. Annuities pool the risk we face of being ‘lucky’ in the life expectancy lottery. Without this insurance it is prudent to under-consume throughout our retirement, just in case we live on into our late 90s.

2. Destroying choice, not creating it: The Treasury says it wants to give people the choice of whether to buy an annuity or not. But in reality they are destroying a market that needed healing not ending. There will be a downward spiral: fewer people will buy annuities and many of those who decide to will do so because they believe they will live longer than average. As a result the costs of annuities will rise; even fewer people will want one; and the costs will rise again. A risk that is currently insurable will in practice cease to be so; ironically at a time when the government is trying to create a market for people to insure themselves against the risks of long term care in old age.

It is a sledgehammer to crack a nut. The annuities market needs reform to increase competition and help people buy the right product for them. But the real problem with annuities will shortly right itself: they are bad value because interest rates are so low. But interest raises will rise over the next few years. This is a massive reform to solve what is mainly a time-limited problem.

3. Housing market mayhem: Where’s all the money that would have been spent on pensions going to go? Almost inevitably into the housing market. All those lump sums which people cash-in just after retirement will either go to pay the deposits for the first home of lucky children or into buy-to-let investments. Either way, the affordability of housing will decline further and the gap between the housing "haves" and "have-nots" will grow worse.

4. Can we have our money back, please? Scrapping the requirement to turn your savings into a pension also begs the question of why the government needs to be so generous with all that tax relief. And why should employers contribute? If a defined contribution pension is just another long-term saving plan, well fine, but why should anyone except the saver care? The government and employer subsidy is part of a tripartite deal predicated on the money being to fund a retirement income.

Before yesterday, Britain had finally achieved a half-decent pension system, based on broad cross-party consensus, thanks to the Turner Commission, auto-enrolment and the flat-rate state pension. With this announcement, it will all unravel very fast. Labour must oppose these reforms.

Andrew Harrop is general secretary of the Fabian Society.

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The UK press’s timid reaction to Brexit is in marked contrast to the satire unleashed on Trump

For the BBC, it seems, to question leaving the EU is to be unpatriotic.

Faced with arguably their biggest political-cum-constitutional ­crisis in half a century, the press on either side of the pond has reacted very differently. Confronting a president who, unlike many predecessors, does not merely covertly dislike the press but rages against its supposed mendacity as a purveyor of “fake news”, the fourth estate in the US has had a pretty successful first 150-odd days of the Trump era. The Washington Post has recovered its Watergate mojo – the bloodhound tenacity that brought down Richard Nixon. The Post’s investigations into links between the Kremlin and Donald Trump’s associates and appointees have yielded the scalp of the former security adviser Michael Flynn and led to Attorney General Jeff Sessions recusing himself from all inquiries into Trump-Russia contacts. Few imagine the story will end there.

Meanwhile, the New York Times has cast off its image as “the grey lady” and come out in sharper colours. Commenting on the James Comey memo in an editorial, the Times raised the possibility that Trump was trying to “obstruct justice”, and called on Washington lawmakers to “uphold the constitution”. Trump’s denunciations of the Times as “failing” have acted as commercial “rocket fuel” for the paper, according to its CEO, Mark Thompson: it gained an “astonishing” 308,000 net digital news subscriptions in the first quarter of 2017.

US-based broadcast organisations such as CNN and ABC, once considered slick or bland, have reacted to Trump’s bullying in forthright style. Political satire is thriving, led by Saturday Night Live, with its devastating impersonations of the president by Alec Baldwin and of his press secretary Sean Spicer by the brilliant Melissa McCarthy.

British press reaction to Brexit – an epic constitutional, political and economic mess-up that probably includes a mind-bogglingly destructive self-ejection from a single market and customs union that took decades to construct, a move pushed through by a far-right faction of the Tory party – has been much more muted. The situation is complicated by the cheerleading for Brexit by most of the British tabloids and the Daily Telegraph. There are stirrings of resistance, but even after an election in which Theresa May spectacularly failed to secure a mandate for her hard Brexit, there is a sense, though the criticism of her has been intense, of the media pussy-footing around a government in disarray – not properly interrogating those who still seem to promise that, in relation to Europe, we can have our cake and eat it.

This is especially the case with the BBC, a state broadcaster that proudly proclaims its independence from the government of the day, protected by the famous “arm’s-length” principle. In the case of Brexit, the BBC invoked its concept of “balance” to give equal airtime and weight to Leavers and Remainers. Fair enough, you might say, but according to the economist Simon Wren-Lewis, it ignored a “near-unanimous view among economists that Brexit would hurt the UK economy in the longer term”.

A similar view of “balance” in the past led the BBC to equate views of ­non-scientific climate contrarians, often linked to the fossil-fuel lobby, with those of leading climate scientists. Many BBC Remainer insiders still feel incensed by what they regard as BBC betrayal over Brexit. Although the referendum of 23 June 2016 said nothing about leaving the single market or the customs union, the Today presenter Justin Webb, in a recent interview with Stuart Rose, put it like this: “Staying in the single market, staying in the customs union – [Leave voters would say] you might as well not be leaving. That fundamental position is a matter of democracy.” For the BBC, it seems, to question Brexit is somehow to be unpatriotic.

You might think that an independent, pro-democratic press would question the attempted use of the arcane and archaic “royal prerogative” to enable the ­bypassing of parliament when it came to triggering Article 50, signalling the UK’s departure from the EU. But when the campaigner Gina Miller’s challenge to the government was upheld by the high court, the three ruling judges were attacked on the front page of the Daily Mail as “enemies of the people”. Thomas Jefferson wrote that he would rather have “newspapers without a government” than “a government without newspapers”. It’s a fair guess he wasn’t thinking of newspapers that would brand the judiciary as “enemies of the people”.

It does seem significant that the United States has a written constitution, encapsulating the separation and balance of powers, and explicitly designed by the Founding Fathers to protect the young republic against tyranny. When James Madison drafted the First Amendment he was clear that freedom of the press should be guaranteed to a much higher degree in the republic than it had been in the colonising power, where for centuries, after all, British monarchs and prime ministers have had no qualms about censoring an unruly media.

By contrast, the United Kingdom remains a hybrid of monarchy and democracy, with no explicit protection of press freedom other than the one provided by the common law. The national impulse to bend the knee before the sovereign, to obey and not question authority, remains strangely powerful in Britain, the land of Henry VIII as well as of George Orwell. That the United Kingdom has slipped 11 places in the World Press Freedom Index in the past four years, down to 40th, has rightly occasioned outrage. Yet, even more awkwardly, the United States is three places lower still, at 43rd. Freedom of the press may not be doing quite as well as we imagine in either country.

Harry Eyres is the author of Horace and Me: Life Lessons from an Ancient Poet (2013)

This article first appeared in the 20 July 2017 issue of the New Statesman, The new world disorder