Truss may abandon pensions triple lock
Payments linked to earnings instead of inflation could leave millions out of pocket
PENSIONS could rise in line with earnings instead of inflation next year after Liz Truss reneged on her commitment to the triple lock.
Downing Street yesterday made clear that the promise, which was contained in the 2019 Conservative election manifesto, may be abandoned.
Jeremy Hunt will decide whether the triple lock, which states that state pensions will rise by the highest of inflation, average earnings or 2.5 per cent, will be kept later this month.
Millions of pensioners will be out of pocket from next April if pensions rise just by earnings, with experts saying many will be £430 a year worse off.
Last night, a rebellion on the Conservative benches was already brewing, with MPS vowing to vote down the change in the House of Commons.
Asked if the pensions triple lock was still in place yesterday, Downing Street confirmed the promise was on pause as new policy was being worked out.
The Prime Minister’s official spokesman said: “We are very aware of how many vulnerable pensioners there are and indeed our priority ahead of this fiscal plan is we continue to protect the most vulnerable in society.
“The Prime Minister and the Chancellor are not making any commitments on individual policy areas at this point, but the decisions will be made through the prism of what matters most to the most vulnerable.”
Asked what the point of a triple lock was if the Government refused to stick to it, the spokesman said: “We are in difficult circumstances. And we’ve acknowledged the reasons for why we are in this position both in terms of domestic decisions and international factors.”
However, Tory MPS were already voicing their opposition to abandoning the manifesto commitment last night.
Maria Caulfield tweeted: “I will not be voting to end the pensions triple lock. Pensioners should not be paying the price for the cost of living crisis whether caused by the war in Ukraine or mini-budgets.” Steve Double, another Tory MP, shared the comment and added “nor me”.
Stephen Crabb, the former work and pensions secretary, told The Daily Telegraph: “This is not the time to consider abandoning the triple lock, especially after clear promises were made following the last temporary pause. Maintaining the value of the state pension during the cost of living crisis is essential.”
A second former Tory minister who worked on pensions policy told this newspaper: “This would be both wrong and a huge political mistake.”
Ms Truss and Mr Hunt, the Chancellor, put on a united front yesterday as they told the Cabinet to find spending cuts to bring down government debt and reassure markets.
Among measures to balance the books, Mr Hunt is also reportedly looking at a windfall tax on banks and energy firms, and delaying Boris Johnson’s flagship social care reform to cap the sum people pay for care in old age.
Pushing back the cap, which was due to start in October 2023, could save £1billion annually, according to The Times. The Chancellor is also looking at retaining a surcharge on top of the increased corporation tax for banks, which would generate an additional £500million per annum, according to the Financial Times.
Mr Hunt could also extend the Government’s windfall levy on oil and gas producers beyond its scheduled end in December 2025. Extending it by two years could raise more than £10billion for the Treasury.
Today, Ms Truss will try to reassert her authority in Prime Minister’s Questions, speaking in the Commons for the first time since Mr Hunt ripped up much of her mini-budget on Monday.
Last night, she insisted to a group of Right-leaning Tory MPS in the European Research Group that she still believed in the need to lower taxes, while accepting now was not the right time.
It also emerged that the Prime Minister has re-hired David Canzini, a longterm Tory strategist who helped Mr Johnson battle attempts to topple him
in a sign she was strengthening her No 10 operation. However, Tory MPS continue to debate how long she can survive as Prime Minister and who could succeed her, with many believing she is facing a battle to remain in the job until Christmas.
The 1922 Committee executive meets today, with Ms Truss’s standing among Tory MPS and whether she should be confronted expected to be discussed. Sir Graham Brady, the chairman, met Mr Hunt yesterday, the day after he met Ms Truss. A Treasury source insisted the meeting was routine. Michael Gove, the former communities secretary, yesterday said her departure was inevitable and joked she had lived up to her “human hand grenade” nickname.
The pensions triple lock has been a central pillar in Tory policy for the past decade, appearing in successive Conservative election manifestos. It was temporarily suspended this year given that average earnings soared in the wake of the Covid-19 lockdowns. As recently as Oct 2, Ms Truss was backing the policy, saying in a BBC interview “I’ve committed to the triple lock. Yes.”