David Cameron speaks at the British curry awards at Battersea Evolution on November 25, 2013. Photograph: Getty Images.
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Liberals are well served by the Conservative Party

With each week, the party is giving more power and responsibility to individuals to shape their own destiny - the essence of liberalism.

Which political party in Britain should you vote for if you are a liberal? Especially after the last week, it seems the Conservative Party is your best choice. The Conservative Chancellor announced a radical policy in the Budget that retirees will now have greater freedom on how they take their pension, liberated from being shackled to a pitiful annuity. Labour, bewildered, is still working out whether it supports this policy, whether it can trust people to manage their money properly.

The Conservatives also press ahead with the progressive raising of the personal tax allowance, which Lord Saatchi has campaigned for for over a decade, to lift millions of low-paid workers out of tax. And this Saturday, thousands of same-sex couples will be celebrating, as they now have the right to marry thanks to legislation introduced by this Conservative-led government.

These are just a handful of examples of the granting of greater power and responsibility to individuals and institutions to shape their own destiny, the essence of liberalism. In recent years, the Conservatives have advocated several liberal policies: a referendum on membership of the EU, giving headteachers more say on who they recruit and how much they pay, allowing nurseries the flexibility to prioritise quality over quantity of staff, and enabling a wider range of organisations – including private and voluntary ones - to tender for the delivery of services including in the NHS. But both the Liberal Democrats and Labour have opposed all of these.

This is not mere cross-dressing or some tectonic political shift. The Conservative Party has in fact had a long-term relationship with liberalism: economic, social and political. Lord Liverpool’s administration in the 1820s pursued ambitious economic liberal reforms: custom duties were relaxed, monopolies limited and restrictions on exports abandoned, an agenda that cumulated in the repeal of the Corn Laws under Sir Robert Peel in 1846. Slavery was abolished by the Tory William Wilberforce and Lord Shaftesbury introduced the Factory Acts, granting basic rights to workers in tough conditions. Under the premiership of Benjamin Disraeli, the vote was extended to millions of skilled working class men. In 1928, the Conservative prime minister Stanley Baldwin passed legislation that gave all women the vote.

For most of the 20th century, Conservatives became the champions of freedom as socialism advanced and the old Liberal Party declined. In fact, some factions from the latter gradually merged with the Conservatives. Until 1968, the National Liberal Party allied with Tories at a constituency level, with joint candidates such as Michael Heseltine. The Liberal Unionist Party, a break-away group that opposed Irish Home Rule, was first in a coalition with the Tories, then their leader Joseph Chamberlain finally agreed to join the Conservatives formally in 1912. Nick Clegg talks very rarely, and only briefly, about Chamberlain; touchy subject, seemingly.

Now, it is of course true that all three main political parties have liberals in their ranks and leadership team. British policymaking has been greatly enriched as a result of this sprawl. But political parties are coalitions themselves: liberals have to negotiate with others in their party who have different philosophical affiliations, and they may find themselves on the losing side in the internal battles over policy and vision. This seems to be happening too often in the Liberal Democrats and Labour at the moment.

Big challenges confront us: an ageing population, climate change and a race with emerging economies to produce highly skilled workforces. The pressures on the state will be unsustainably high, particularly when Britain has to remain a low-tax, competitive economy. We will need a strong dosage of economically liberal ideas to meet these challenges: for example, alternative ways of financing crucial public services such as education and healthcare, including greater contestability in commissioning, loans-based financing and social investment. The Tories to date have been most engaged and enthusiastic about these sort of ideas. Only they, at the moment, seem to have the appetite to pursue the economic liberal agenda we desperately need in the decades ahead.

Yes, liberals in the Conservative Party have to fight their own battles. And their liberalism must be tempered too by conservatism, a philosophy that rightly roots individuals in relationships and social custom. On some policy areas, liberal conservatives have lost: on immigration, for instance, where the party pursues a UKIP-lite message, all caps and clampdowns, endangering national and cultural enrichment.

Liberals are well served by the Conservative Party. For the moment. The liberal parliamentarians, policymakers and activists within it must keep fighting. For a brighter future for the Conservatives lies not in being a refuge for those angry and disappointed with change, but as a home for hopeful younger generations who increasingly identify as liberals.

Ryan Shorthouse is the Director of Bright Blue, a think tank for liberal conservativism 

Ryan Shorthouse is the Director of Bright Blue, a think tank for liberal conservativism 

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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: www.oldmutualwealth.co.uk/ products-and-investments/ pensions/pensions2015/