Andy Burnham is facing pressure to scrap the £247 payments for state pensioners if he becomes Prime Minister. The new Labour MP for Makerfield is being urged to ditch the Triple Lock mechanism for retirees and replace it with a link to earnings and population growth to free up cash for new parents.
Triple Lock Mechanism Under Fire
The triple lock was introduced in 2010 and has increased the universal pension each year by the growth of wages, prices or 2.5 per cent, whichever is higher. Under this metric, Department for Work and Pensions (DWP) state pension payments are forecast to hit £247 next April, according to Quilter.
Onward, the centre-Right think tank, proposes replacing the triple lock with an earnings link adjusted for demographics, with a 28 per cent earnings floor. Sir Simon Clarke, the director of Onward and former chief secretary to the Treasury in Boris Johnson’s government, said: “Andy Burnham faces a daunting in-tray. Beyond the day-to-day crises confronting No 10 are some fundamental problems that have to be fixed urgently.
Growing Consensus for Reform
“We also need to take action on the triple lock on the state pension – politically attractive but fiscally volatile, increasingly expensive, and difficult for households and governments to plan around. This commands wide agreement, from former conservative chancellor Jeremy Hunt to the Tony Blair Institute and Lord Jim O’Neill, set to be a key adviser to Burnham as PM. The question is how to fix this without incurring political disaster.”
The authors said: “Politicians can be forgiven for not having given much thought to the triple lock when it was introduced. At the time, wages had persistently outstripped inflation in the past four decades – if the triple lock had been in place for those years, it would have more or less amounted to an earnings link. But a long period of sluggish earnings growth and, in recent years, high inflation, has made it absolutely unsustainable, leading to very significant jumps in value.”
Political Reactions
Sir Jeremy Hunt, the former Conservative Party Chancellor, said: “Even though reform of the current system will not be painless and must be radical, the answer is not to abandon pensioners. It is to move from a system of unpredictable and ratcheting costs to one based on clear, fair and durable rules, and this report lays out one vision for doing so.”
Sir Simon added: “There is a growing consensus on both the political Right and Left that the triple lock needs urgent reform – the question is increasingly not whether but how to do this without courting political disaster. This report offers a serious solution that I hope both the Government and the Opposition will consider carefully.”
