A growing number of Labour MPs believe the state pension triple lock guarantee 'isn't working' and is 'costing too much money', according to reports. The triple lock, which increases the state pension each April by the highest of earnings growth, CPI inflation, or 2.5%, is under scrutiny as costs soar.
Triple Lock Under Fire
Labour MPs are reportedly considering axing the triple lock in a bid to move away from 'unaffordable long-term' rate increases. The Office for Budget Responsibility (OBR) warned last year that the triple lock is projected to be three times more expensive by the end of the decade than initially forecast, with costs set to reach £15.5 billion a year by 2030.
Former cabinet minister Liam Byrne has called for 'a gradual move from the triple lock's ratchet effect toward a more stable uprating mechanism' in an essay for the centre-right think-tank Bright Blue. Former Prime Minister Tony Blair has also warned that the guarantee is 'unaffordable long term', and backbenchers have been engaged in 'private discussions about how to phase it out', according to the i Paper.
Criticism from MPs
Graeme Downie, MP for Dunfermline and Dollar, said: 'The triple lock costs tens of billions of pounds more than it was expected to cost, yet we still have pensioners living in poverty, which tells you that the current system isn't working, and it's costing too much money. Why not come up with a way that both supports pensioners in poverty, but also uses that money more efficiently to shift to things like defence spending, and also to support the next generation as well?'
Labour pledged to keep the triple lock in place in its General Election manifesto, but senior party figures were critical in opposition, including pensions minister Torsten Bell, who once described it as 'silly'.
Alternative Proposals
A report by the Tony Blair Institute (TBI) said earlier this month that the state pension is 'outdated, increasingly unaffordable, and too rigid for the way people live and work'. It argued that a new 'lifespan fund' should be established instead, providing a flexible model that builds entitlement through activities including work, caring, and studying.
Former deputy Labour leader Harriet Harman also suggested the guarantee be means-tested in April in a bid to boost defence funding.
Defence of Triple Lock
But Caroline Abrahams, charity director at Age UK, argued for the triple lock to remain in place at least into the next parliament, warning that the extra money it delivers 'makes a meaningful difference to many lives'. 'In new polling, three in 10 pensioners say they are struggling financially – even before the worrying rise in energy prices,' she said. 'Going forward, we need a national debate to determine the purpose and appropriate value of the state pension as, at present, it is set too low to provide those reliant on it with a decent standard of living throughout their later lives.'
A spokesperson for the Department for Work and Pensions (DWP) said: 'Supporting pensioners is a priority and our commitment to the Triple Lock for the rest of this Parliament means millions of pensioners will see their yearly State Pension rise by up to £2,100.'
