Save content
Have you found this content useful? Use the button above to save it to your profile.
Some things are too important for politics - AccountingWEB - photo of a protester with a placard showing George Orwell
iStock-ollo-Geroge-Orwell

Politicians need to make good, long-term decisions

by

Two recent stories in the news, one about pensions and one about climate change have AccountingWEB's Jake Smith questioning how to get better decisions from politicians.

27th Jul 2023
Save content
Have you found this content useful? Use the button above to save it to your profile.

It’s an interesting time for politics in the UK, and indeed the rest of the world. Every day we are confronted with various messages trying to influence us and persuade us that one party or politician is better than another. At AccountingWEB, we genuinely try to avoid any political bias and concentrate on reporting on issues that affect our members.

One of the challenges our policymakers and rulers often struggle with is making good long-term decisions. Given the fight for daily headlines and the five-year terms that our UK political system has, decisions are often made with short-term goals outweighing long-term needs. Whilst this is understandable on one level – political parties need to be in power to deliver their promises – on some issues, this can lead to damaging outcomes.

There were two news items this week that I believe highlighted the problem we, and our political leaders, face. One was related to pension taxation and the other was related to the challenge of how best to minimise the risks and effects of global warming.

People need to save more for retirement

Pensions are vital to an ageing society, most people given the choice would not want to work until they die. Whilst we still have a state pension that guarantees some income in retirement to most of our population, it clearly isn’t enough to live on comfortably even with other benefits and allowances. 

Successive governments have tried various methods to encourage people to save more for their retirement. Increasingly, the responsibility is being passed to individuals to manage this since the sad demise of nearly all final salary or defined benefit schemes (except for public sector employees and a very few lucky private sector employees). 

Auto-enrolment is certainly a step in the right direction, though contribution levels from most workers are far too low to give the kind of pension income that they will need to have the lifestyle they desire.

Governments must beware of tinkering with pension rules

That’s why anything that undermines pension saving is very risky. The recent (18 July) government consultation on abolishing the lifetime allowance contained a worrying measure reported in the FT, where the Treasury said beneficiaries would, from April next year, be charged income tax on ongoing withdrawals made from pension pots they had inherited. I’m not going to go into the details of the impact this could have on individuals, we’ll be looking into that in another article soon. 

People save into pensions for over 40 years usually, and they have to believe that the end results of that saving will be beneficial and worthwhile to them and their families.

The fact that it is that tinkering and altering the taxation of pensions like this undermines people's confidence in them as a way to save and I think is a dangerous thing to do.

As former pensions minister Steve Webb points out in the FT article, bringing in a potentially important change like this through the back door of other rule changes and not having it properly debated also doesn’t build confidence in how pensions are being treated.

What’s needed is a proper long-term solution that does not get chopped and changed by successive governments. 

The environment is too important for point scoring

The second story that brought home the difficulty of political infighting getting in the way of important long-term goals was the news of Lord Debben, the former Tory minister and outgoing chair of the Climate Change Committee, criticising the recent conservative attacks on Labour’s green policies in the lead up to and aftermath of the Uxbridge by-election. 

The new Conservative MP Steve Tuckwell was successful in his campaign by turning the by-election into a local referendum on the controversial ULEZ expansion proposed by Sadiq Khan, the Mayor of London. 

A number of conservative MPs and ministers, including Suella Braverman and Grant Shapps have been critical of Labour's green policies. However, Lord Debben suggested that rather than respond with mud-slinging, Labour should offer to support the recommendations set out in Tory MP Chris Skidmore’s Net Zero Review. Skidmore outlined 130 recommendations to put the country on track to hit Net Zero targets, as well as the economic benefits it could bring.

Lord Debben called for cross-party consensus to ensure that we are able to meet our targets. The committee had already reported back in June that “confidence in the UK meeting its goals from 2030 onwards is now markedly less than it was in our previous assessment a year ago".

Saying that “A key opportunity to push a faster pace of progress has been missed”.

Lord Debben had also recently said that in his opinion the UK is no longer a world leader on climate issues

Cross-party support is needed for long-term decisions

These are just two issues that came up in the past few weeks. They highlight how difficult it can be to make good long-term decisions and the dangers of allowing political point scoring to cloud the debate over important issues. 

This is no recent phenomenon, of course. George Orwell summed it up well by saying: “In our age, there is no such thing as ‘keeping out of politics.’ All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia.”

Sadly, these words written around 80 years ago, still ring true.

How do you think we should tackle issues like this and is it possible to come up with solutions that could gain cross-party support? Let us know in the comments below.

Replies (6)

Please login or register to join the discussion.

avatar
By Hugo Fair
27th Jul 2023 22:10

It's a 'fun' party game, but when you say:
"How do you think we should tackle issues like this and is it possible to come up with solutions that could gain cross-party support?"
... you are presumably not seriously seeking a solution that has baffled everyone for over 2,000 years.

The short-termism that is bred by the demands of populism is an in-built feature of democracy - which the Athenians (and all those since who claim to be a part of 'western democracy') admitted.

On the positive side are aspects that include (to some degree) a brake on unfettered corruption that is otherwise enabled by unopposed power + a (relative) transparency of who is doing what to whom using what money, etc.

However whilst this tends to curb the 'extremes' (of policy and behaviour), it also ensures that those who enjoy power aren't prepared to rock the boat (of populist perceptions and voter intentions) ... which is why we have a series of middle-of-the-road party 'commitments' (that only mildly flip back and forth around a centrist position).

It's true that the two-party system exaggerates this controlled polarity, but at least it tends to get things done (slowly, not very efficiently and certainly absent any bravery) - which seems to be better than the stasis you find in countries with a history of multi-parties and hung parliaments.

If, through this article or otherwise, you manage to uncover the effective alternative to democracy OR autocracy, then all power to your elbow ... I'll watch with interest!

Thanks (3)
Replying to Hugo Fair:
Jake Smith, AccountingWEB
By Jake Smith
28th Jul 2023 15:08

Hi Hugo, thanks for your response. It's not that I'm questioning the way democracy works, or looking for an alternative, as you say short termism has been an issue for many years.

However, when momentous things like world wars happen, we tend to change the way we do things. eg setting up the UN - to try and avert another world war.

You might argue that hasn't worked that well, with the almost constant fighting somewhere in the world over the past decades. But, while Pension taxation may not be quite as serious an issue as a World War, the Climate Crisis undoubtedly is and our current approach to it just doesn't seem to have any teeth.

The various COP sessions have tried to get consensus, but things are still heading in a catastrophic direction.

So, my question was more - how do we try to get politicians to work together for issues like this?

Thanks (0)
Replying to Jake Smith:
avatar
By Hugo Fair
28th Jul 2023 17:21

It's a difficult topic on which to comment, Jake, if one wants to avoid sounding like a prophet of doom - but I wasn't suggesting that you were "questioning the way democracy works", just trying to point out that short-termism tends to ensue where populism (which is inherent within democracy) drives decisions.

The U.N. is actually an excellent example ... as in even though the intention was to avert another world war, all that happened in reality was an after-the-event unit of occupation that tries to keep factions apart but solves nothing (because it's not even within their remit to 'get involved').
I speak with considerable personal experience, having been born in a country which ended up with the 'peacemakers' all over the place. The reality is that their soldiers stood by whilst members of my family were tortured and killed (like our current UK police apparently do when outnumbered).
The 'least bad' example: a squad sent to evict my widowed grandmother from her house (that she'd built 30 years earlier with her husband) on the basis of this being 'for her safety' .. then categorising it as 'abandoned property' and therefore commandeering it for their own use .. eventually letting a Canadian 'skypilot' lodge there (but not stopping him from bagging up all her furniture, carpets, china, etc for transportation back to his home town when he left)!

My point in this litany?

The answer to your question "how do we try to get politicians to work together for issues like this?" is ... maybe not the 'right' question.

When a major issue (climate, pandemic, air pollution, etc) is perceived to be of worldwide concern then there is usually a broad(ish) consensus of views and policy announcements (viz COP).

But the two fundamental problems remain:
a) how to translate those policies (akin to corporate 'vision') into practical actions (aka 'operations'); whilst
b) retaining populist support (not for the vision which is easy, but for the taxes & subsidies that hit one portion of the electorate harder in the pocket than another section of society).

Whatever our aspirational dreams (for ourselves, families and society at large) we are fallible when faced with personal choices and the 'correct' one is unaffordable.
For instance, I'll admit that last December (when we were in the midst of a deep freeze) my gas boiler packed in, so no HW or CH (inside temp of 13 C)!
Having ascertained that it was irreparable, I got quotes which ranged from £2k (new boiler including fitting) or an air source heat-pump (from £20k + unknown extras and installation = estimated £35k+).
2 days later and £1,900 lighter (having negotiated a discount), my house was warm and I could have showers again ... but I'd missed my 'opportunity' to do my bit for the environment (on the other hand I was alive).

So where was the UK's practical policies to support their COP announcements?
And if I support more stringent enforcement, am I now a hypocrite?
[Answers not required although feel free to point out my errors].

Thanks (1)
Replying to Jake Smith:
avatar
By moneymanager
30th Jul 2023 00:51

"world wars" do not "happen", they are engendered by government policies, International 'agencies' and the very powerful forces that lead to their creation, such machinations have not been inspired by any humanitarian goodwill but for the promotion and protection of profit, avarice if you will.

Is there climate change, most certainly, is there actually a 'crisis' and even if there is, to what degree is human activity the cause and at least as importantly will expensive unproven technologies be the solution, very limited and no are probably the right answers. Take atmospheric nitrogen which is deemed to be too high (it has been much higher) at about two percent, at one percent all vegetation dies and therefore so do we and if you consider that the North American prairies use to have some 40,000,000 bison it clearly isn't caused by farting livestock, in fact they would be the solution. Nitrogen has been released from the soil by deforestation and industrial, toxic chemical based, agriculture which is why soil structure is dying and topsoil erroding, down to inches from ten feet in seventy years, that's driven by interventionist US agricultural subsidies but they are driven by bigag/bigchem so we have to get the money out of politics, when is that going to happen?

Thanks (0)
avatar
By moneymanager
30th Jul 2023 00:10

"global warming" or climate change and the role of human activity and government.

I'm reading an academic study on ancient Egypt and in pre-pharaonic times, semi-nomadic herdsmen wandered over the vast expanse of what is now the western desert, in the South West there is a structure of monoliths very remeniscent of Stonehenge, it dates from around 5000 B.C and is thought to be a calendar to forecast the arrival of the all essential rains, over a period of just a few generations the rains became less predictable and slipped southwards and now fall, when they do, in the northern hills of Ethiopia, the herdsmen had no choice, die or migrate and they did the latter settling along the Nile Valley.

Just last week we were treated to the fear inducing notion that the Gulf Stream could also slip south which has been considered possible for at least twenty years, if it did shift we are supposed to think that it's all our fault and that we have to destroy all functioning society and societal norms and pay dearly for the privilege, now tell me, how much industrial activity was there seven thousand years ago.

How about politicians being honest and not only promoting the views of corparate profitmakers, pirates perhaps, and listening to those with valuable contributions to make but who are always deemed 'beyond the pale' and this applies to just about every area of activity.

Thanks (0)
avatar
By Hometing
31st Jul 2023 14:47

It's hard to not be political when we have all endured the farce that's been going on the past few years

Thanks (0)