Burnham to pass law scrapping pension triple lock before next election

Andy Burnham will pass legislation to scrap the state pension triple lock in this parliament, even though the guarantee will remain until 2030, the government has said. The prime minister used his conference speech to announce a change to the policy, which guarantees that the state pension rises by the highest of 2.5%, inflation or earnings growth. In future, the earnings element will be adjusted to avoid much larger pension increases in years when wages spike. In his speech, Burnham said the triple lock would remain in place until 2030 – after the next election – keeping Labour’s manifesto promise to retain the guarantee. However, guidance published alongside the speech shows that the government intends to legislate before then, requiring MPs to vote on the changes. It means parties will go into the next election setting out in their manifestos whether retain Labour’s changes or repeal them if they win power. The guidance also shows that the government estimates that the adjustment to the triple lock would reduce state pension spending by £15bn a year by the end of the 2030s and by £50bn a year by 2050. However, the Resolution Foundation thinktank said on Friday that it was extremely difficult to estimate the savings, with figures ranging from nothing to about £24bn a year depending on which recent decade was used as a model. Ruth Curtice, the thinktank’s chief executive, wrote on Friday: “The adjusted triple lock saves most in a volatile world, and so saves nothing in the 90s or 00s, and £24bn in the 10s.“Over the longer term, which will most likely deliver some mixture of all of these economic realities, the new mechanism should trend closer to earnings.“If real earnings growth permanently disappoints then even the protections in the new mechanism could prove expensive. A new, if not the main, reason to fight to avoid stagnant wages.”Since it was announced, the policy has been criticised by the Conservatives, Reform UK and the Liberal Democrats – although some Tory and Lib Dem MPs are unhappy with their leaders for campaigning to retain a policy they believe is too costly. Sharon Graham, the Unite general secretary, said earlier this week that getting rid of the pension triple lock to help fund social care reform would be “electoral suicide”. However, YouGov has published polling suggesting that voters support Burnham’s plan by 48% to 28%. In his conference speech, Burnham confirmed he would end the pension triple lock and use the savings to fund a national care service in England that would be free at the point of use. He said his changes would still leave millions of pensioners better off and that they would benefit from the new care system, which is expected to follow the Scottish system by covering care costs but not accommodation. Burnham also promised to exempt lower-income pensioners from income tax during this parliament.