‘It’s important we increase spending’: Treasury minister defends triple lock pension
A Treasury minister has defended the triple lock pension as a sustainable policy despite former Prime Minister Sir Tony Blair attacking the benefit for being unaffordable.
Dan Tomlinson said it was “important we have the triple lock and that we increase spending on pensioners”, doubling down on the controversial manifesto commitment that has been criticised by the UK’s top economists.
The triple lock pension ensures that the state pension increases each year by whatever is highest out of the inflation rate, wage growth or 2.5 per cent. It means that pensioners are protected from severe price shocks even as real wages for workers slow.
Blair wrote in an essay that it was “horribly hard” to reform the state pension but emphasised that voters “know, deep down, the necessity of doing it”.
He also called on Labour to work with the Tories on reforming welfare as he concluded that the triple lock pension was “unaffordable”, echoing views shared by economists from across the political spectrum and those at the Office for Budget Responsibility.
Tomlinson hit back at Blair’s comments and said the government should continue hiking the state pension, which now amounts to £12,547 per year.
“I do support the triple lock, I think it’s the right policy, it was in our manifesto and I think it’s important that we make sure we’re protecting pensioners and protecting their living standards,” the Treasury’s tax minister said.
“We definitely need to make sure that we are not spending more money than we need to on welfare payments for people … particularly young people who are out of work and have been out of work for a long period of time.
“The best way, the most sustainable way, to both grow our economy to support individuals and to support the public finances is to make sure that we are helping people to get into work and to get into employment.”
Parties back triple lock pension
All the mainstream political parties – Labour, the Conservatives and Reform UK – have committed to maintaining the triple lock mechanism, which was first introduced by former Chancellor George Osborne in the “austerity” years.
Economists have said the policy is unsustainable over the long term as spending on the pension outpaces growth in tax receipts.
The OBR said last year that the triple lock pension had already cost three times as much as originally forecast, with the fiscal watchdog’s former chair Richard Hughes suggesting that it contributed towards setting UK public finances on an “unsustainable” path.
The IMF also recently called for the Chancellor to replace the triple lock pension with another system.
Bank of England governor Andrew Bailey has singled out the UK’s ageing population as one of the main problems facing the UK economy.