Political uncertainty means pension reform not being addressed – Vince Cable

Written by Natalie Tuck

The current political uncertainty surrounding the government and Brexit means that big long-term issues, such as pension reform, are not being addressed, Liberal Democrat leader Vince Cable has said.

Speaking at the Festival of Financial Planning in Birmingham, 8 November, Cable gave his views on Brexit, the government and the economy. He noted that civil servants and ministers working within the government have said “all of the energy is being sucked out of government by the Brexit negotiations”.

“It is very difficult to get senior civil servants and ministers to focus on any other issue. Also the fact that the government is living on a hand to mouth basis[…]the whole thing is very volatile, the government is dependent on weekly negotiations with the DUP just to stay in power, so there is a very short-term time perspective,” he said.

Cable said that this has several implications, such as getting legislation through parliament. For example, the Great Repeal Bill, which he said has around 800 amendments.

“The other consequence is that big long-term issues are not being addressed at all. If you consider matters like the issues around long-term personal care, pension reform, the funding of universities, big infrastructure decisions; all of these things require cross-party agreement and they require a long-term perspective, and those things are not happening.

He said there may be off cases of things being pushed ahead, such as Heathrow, but for the most part, “long-term considered consensual decision-making just isn’t happening” and “this is all a consequence of the unstable position we have in government”.

On Brexit, Cable believes it can be linked back to the 2008 financial crisis, which made people poorer, and the resulting “austerity governments” affected people’s thinking in a “very negative way. He thinks there is a 50 per cent chance that we will have a deal, although this will involve paying a large sum of money.

However, he thinks there as a 30 per cent chance that we do not have a deal at all. Whatever the case, he said that we will know by the end of the year and will depend on whether an agreement is reached on the settlement, which could be around £53bn. He said the key people from the European Union don’t want disruption but they don’t want the UK to be seen as better off by leaving the Union.

In terms of how the Brexit vote has affected the economy, he said it has already affected the exchange rate of sterling, the number of businesses making big investments, productivity and net-migration, which has had a negative affect on certain industries. “If the negotiations go very badly, it will be the exchange rate that will again take the strain,” he said.

Related Articles

Cautious optimism in a challenging world
Matthew J. Bullock, Investment Director, Global Multi-Asset Strategies, Wellington Management, meets Francesca Fabrizi to discuss how multi-asset strategies can help investors

Latest News Headlines
Most read stories...
World Markets (15 minute+ time delay)