Rishi Sunak , faced with the challenge of funding tax cuts demanded by his own MPs, has declined to commit to retaining the pensions triple lock in the next Conservative manifesto. While the Rishi Sunak affirmed that the triple lock, ensuring pensions increase by a minimum of 2.5% or in line with inflation or earnings, remained government policy, he refrained from confirming its inclusion in the forthcoming manifesto during the G20 summit in Delhi. The triple lock, introduced in 2011, has resulted in pension increases. This outpaced wage growth.
Sunak is also contending with pressure from his MPs. This is to secure funding for future tax reductions. When questioned about reports of his intention to cut benefits to finance tax cuts in the next year’s budget, he remarked that there are various methods to provide assistance. He emphasized the government’s support for energy bills and cost of living payments.
Stephen Timms, Chair of the Labour work and pensions committee, strongly opposes reducing benefits during a cost of living crisis. Although cutting benefits may appeal to many Conservatives, scrapping the triple lock is likely to be contentious with both Tory MPs and voters, despite its substantial cost.
On Tuesday, pensioners will discover the extent of their payment increases. This is with expectations of an approximately 8% rise in average earnings from May to July.
Institute for Fiscal Studies’ Analysis
According to the Institute for Fiscal Studies’ analysis, pensioners currently receive almost £100 more per month than they would have if pensions had been adjusted for inflation or earnings. The government is incurring an additional annual expenditure of £11 billion due to this. The report predicts that this cost could increase to as much as £45 billion per year by 2050.
Pensions Secretary Mel Stride has indicated that it is highly likely to remain Conservative policy for the next election. But, no absolute guarantee has been given. Labour has also not confirmed whether the policy will be included in its next manifesto. This is even though a spokesperson for Keir Starmer has stated the Labour leader’s commitment to it.
Efforts to eliminate the triple lock are expected to trigger strong reactions from older voters. Its a demographic that played a pivotal role in the Conservative victory in the 2019 election. In that election, two-thirds of voters aged 70 or older supported the Conservatives. This is while only one in five individuals aged 18-24 did the same.