Andy Burnham is set to enter 10 Downing Street within weeks (Image: Getty)
Andy Burnham‘s expected coronation as Labour leader and prime minister has sparked a fresh debate over the state pension triple lock. Fears have been raised over the long-term future of the policy, which has been criticised by economic advisers to the PM-in-waiting.
The triple lock ensures that the state pension rises each year in line with whichever is highest out of three figures: inflation, average earnings or 2.5%. It was announced in 2010 by the Tory-Lib Dem coalition government to protect pensioners against increases in the cost of living. But now there are growing calls for a rethink.
Critics claim that Britain cannot afford it amid economic woes and a growing older population.
They also argue it is unfair on younger people who are grappling with issues such as being unable to get on the housing ladder.
Labour committed in its 2024 general election manifesto to maintain the triple lock until the end of the current parliament.
Mr Burnham said the pledge still stands as he took part in an online question and answer session on Reddit last night.
But there will now be questions over whether he would keep it beyond that point, with the next election due by 2029.
A former Bank of England chief economist who is advising Mr Burnham suggested in a recent interview that he could look at changing the policy as the debate has “shifted” in the last few months.
Describing the triple lock as “fiscally unsustainable”, Andy Haldane said: “I don’t know when the moment will come politically and I don’t know when the political will can be summoned to tackle this.
“But I think the vast majority of people would say it does need tackling, and given our strained fiscal times, why not now?” Other advisers to the wannabe PM have criticised the triple lock before.
Former Treasury minister Lord O’Neill branded the policy “bonkers” while ex-head of the budget watchdog Richard Hughes said it was “one of a series of age-related pressures that pushes public spending upwards steadily over a number of years”.
Political heavyweights who have recently called for the triple lock to be axed include Labour former PM Sir Tony Blair and Tory ex-Chancellor Sir Jeremy Hunt.
A series of think tanks have also demanded that the policy be replaced with a cheaper alternative.
The Office for Budget Responsibility has said the annual cost of the triple lock is set to reach £15.5billion by 2030 – three times more than originally estimated.
Sir Keir Starmer‘s successor will find themself under intense pressure when it comes to the public finances – and is facing a £4.7bn black hole in defence spending.
But for someone who could enter 10 Downing Street within weeks, little is known about Mr Burnham’s plans.
He has largely dodged questions from the media since winning the Makerfield byelection.
But the former Greater Manchester mayor faces a fierce battle that risks being a repeat of the winter fuel payments fiasco if he looks to make changes to the triple lock in the future.
Sir Keir and Rachel Reeves announced plans to end the previously universal winter fuel allowance for most pensioners just after Labour won power in July 2024.
The move triggered warnings that some OAPs would have to choose between heating and eating after losing out on up to £300 a year.
The PM and Chancellor were forced into a damaging U-turn after months of protests from cross-party politicians, campaigners and unions.
Labour’s plan to axe winter fuel payments for most pensioners sparked furious protests (Image: Getty)
The Daily Express has a long-running crusade to defend the triple lock and is campaigning for all parties to make manifesto commitments to it in time for the next general election.
Reform UK became the first to promise to maintain the policy if it wins the next election.
Its Treasury spokesman Robert Jenrick, who had defected from the Tories, appeared to change Nigel Farage‘s mind after his leader had earlier expressed concerns at the cost and suggested it was “up for debate”.
But Reform has pledged to make sweeping cuts to the benefits bill to retain the triple lock if the party wins power.
Kemi Badenoch’s Tories back the policy but have yet to confirm that it will be in their next manifesto. The Liberal Democrats are also strongly in support of the measure.
Keeping the triple lock is key to securing the grey vote, with older people more likely than their younger counterparts to turn out on polling day.
Those in favour of the triple lock insist it is a lifeline for many poorer OAPs who are unable to earn money in other ways.
They point out that the full new state pension is only £12,547.60 a year, and many OAPs actually receive less depending on their national insurance contributions and when they reached pension age as the old state pension is generally lower.
Supporters of the triple lock maintain that the policy is essential to prevent older households falling into poverty or being forced to choose between heating and eating during the dark and cold winter months.
Such campaigners also point out that the UK has one of the lowest state pensions of all Western countries.
Meanwhile, polling suggests the majority of the public are in favour of keeping the triple lock.
A YouGov survey this year discovered two-thirds said it should stay, while just 14% said it should go.
Only one in four said they would be in favour of changing the triple lock, while 37% were opposed. Even among the youngest age group – the 18 to 34-year-olds – some 44% said they supported keeping the triple lock compared with 21% who opposed it.
But what could replace the triple lock if the mechanism was ditched?
Under a double lock, the 2.5% minimum rise could be removed, leaving the state pension to rise each year by either the existing inflation rate or by average earnings growth.
There have also been proposals for a “smoothed earnings link”.
This measure would tie state pension payments to wages growth but also include an option for a temporary cash boost in any period of high inflation.
While the next election could be three years away, Mr Burnham will have to decide whether Labour’s manifesto includes a commitment to keep the triple lock or to axe it.