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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In defence of the metropolitan elite

Railing against low-paid academics will not solve Britain's inequality problem. 

It’s a measure of how topsy-turvy our political culture has become that Theresa May, a Conservative, Oxford-educated prime minister, can claim to be on the side of "ordinary working-class people" against a sneering "elite". But while Brexit has made this division central to our political culture, we’ve been heading in this direction for a while. 

Earlier this year, I was watching a heated exchange between centrist Labour MP Alan Johnson and Left Unity’s Simon Hardy on the Daily Politics show. At one point, Johnson bellowed across the table: "You’re a middle-class intellectual!" So this is now a stand-alone insult, I thought to myself, and took to Twitter to share my indignation. A friend immediately replied: "He means you." And she’s right. I am indeed a middle-class intellectual, a member of the metropolitan elite. Given the prevalence of post-Brexit elite-bashing, I’m loath to stick my head above the parapet. But as my liberal intellectual English lecturers used to say, these terms need unpacking. 

The right-wing anti-elitism that we are seeing all around us co-opts the left’s opposition to financial and corporate dominance and converts it into opposition to those who are educated. To listen to Tory speeches now it’s as if the top 1 per cent didn’t own half the world’s wealth, as if the sales of individual global corporations hadn’t overtaken many national economies, as if CEOs didn’t earn 300 times the salary of the average worker. No, it’s the liberal, metropolitan elite that’s the real menace – those mighty "experts" and "commentators". As Michael Gove, another Oxford-educated Tory, declared during the EU referendum: "People in this country have had enough of experts." 
Anti-elitism conflates political office and cultural and educational distinction on the one hand, with social privilege on the other. But there’s no intrinsic reason why there should be a homogenous "political class", or that those with expertise or artistic judgement should necessarily be rich. In 1979, 16 per cent of MPs had a background in manual work; in 2010 the proportion had dropped to 4 per cent. The history of the Worker’s Educational Association and the Open University reveals a lively tradition of working-class intellectualism. It’s true that, right now, political and cultural capital are appallingly centralised, and there is a revolving door between ministerial office and business. The range of people entering the arts and higher education has been narrowed by the removal of social security and block grants.

Today's anti-elitism, far from empowering the disenfranchised, covertly promotes neoliberal economics. High standards are equated with having the upper hand. Attacks on "cosmopolitan elites" - i.e. those who benefited from affordable education - entrench inequality, put the left on the back foot and protect the real elites – all this while producing a culture that’s bland, dumbed-down and apologetic.
This manoeuvre is everywhere. Brexit is a surreal pageant of inverted protest - May’s use of the royal prerogative supposedly represents the will of the people. The beneficiaries of the PM's grammar school "revolution", she claims, will be "the hidden disadvantaged children". Those who question the evidence base for this are simply metropolitan snobs. ‘This is post-referendum politics’, the BBC’s education editor reminded us tellingly on Today, ‘where the symbolic status of grammar schools as a chance to better yourself has trumped the expert consensus’.
The higher education bill currently going through Parliament brandishes the downtrodden student consumer as a stick with which to beat academics. According to the business-friendly University Alliance, academia’s reluctance to emphasise "employability" carries "more than a whiff of snobbery". Top-down curation is out; impact, feedback and engagement the new mantra. With their worth constantly weighed against the most pressing social priorities, cultural organisations no longer seem convinced by their own right to exist.
The "democratisation" of education, media and culture must be recognised for what it is -  a proxy for real democracy and any attempt to tackle social and economic inequality. Just as the redistributive work of politics is shunted onto embattled and underfunded sectors, the same anti-elitist pressure weakens politics itself. Democracy is thoroughly distorted by economic forces. But the solution is not, as right-wing populists do, to attack the system itself - it’s the only means we have of creating a fairer world. 
This anti-political sentiment is aimed disproportionately at the left, at do-gooding idealists and defenders of the "patronising" welfare state. Stricken with anxiety about being out of touch with its former heartlands, Labour is unable to strategise, put up a credible leader, or confidently articulate its principles. Unless it can tell a positive story about informed debate, political institutions and – yes – political authority, the left will remain vulnerable to whatever Ukip contorts into next.

It’s time to stand up proudly for good elitism – for professional judgement, cultural excellence and enlightenment values. Once, conservatives championed political authority and high art. But now that they’ve become scorched-earth modernisers, it’s time for progressives to carry the torch. Otherwise, disparities of wealth will become ever sharper, while the things that give our lives meaning dissolve into mediocrity.



Eliane Glaser is a senior lecturer at Bath Spa University and author of Get Real: How to See Through the Hype, Spin and Lies of Modern Life.