A Department for Work and Pensions (DWP) minister described as the 'mastermind' behind Andy Burnham's state pension reforms says a triple lock will remain under the Prime Minister's changes. Torsten Bell, Swansea West MP and parliamentary under-secretary of state at the DWP, said many people are 'wrong' in two ways about the state pension triple lock.
He said the state pension will continue to be based on a triple lock. His remarks follow the Prime Minister's announcement late last month that the current triple lock system will be reformed.
Burnham's reform plans
Speaking at the Labour Party conference, Mr Burnham set out proposals to overhaul the existing pensions triple lock, which guarantees state pension increases match whichever is highest of inflation, earnings or 2.5%. He aims to change it to enable the Government to redirect funding towards an NHS-style care service in England.
The proposal would see the state pension rise in line with inflation or 2.5% from 2030, removing the triple lock's automatic link with average earnings growth. However, Mr Bell maintains that people are mistaken about two aspects of the triple lock - including one important element of the new policy.
Bell's clarification on the new policy
Writing in his latest newsletter, he explained: "This has been the cause of the longest WhatsApp exchanges I have had, with podcasters, Today Programme presenters and the rest. Some have wrongly claimed the new policy is a double lock - to be fair largely because the earnings part of the adjusted Triple Lock isn't the simplest bit of public policy ever."
He then shared a graphic "to ram home that the new policy is very much a triple lock." He said that from April 2030, the Government intends to modify rather than scrap the Triple Lock. "We want to keep the core principles of ensuring a material rise every year, protecting against price increases, and ensuring that pensioners benefit as the economy grows - but to remove the permanent ratchet effect," he said.
"We achieve this with a State Pension that rises every year by at least the highest of inflation or 2.5%, plus anything more required to ensure the State Pension retains that 2029/30 record high value relative to earnings."
The ratchet effect, he said, currently means the State Pension grows more rapidly than wages over time, as it can potentially increase by more than earnings in certain years. He said the new approach from 2030 would place the State Pension on a "sustainable basis, rising in line with average earnings over time rather than consistently growing faster than wages."
Savings and pensioner poverty claims
Mr Bell, who the Daily Telegraph described last week as the 'mastermind' behind the new triple lock policy, said that the reforms would deliver substantial savings for the UK - £15bn annually by 2040, rising to £50bn by 2050, reports the Mirror.
The minister, who also serves as parliamentary secretary at the Treasury, argued that it was incorrect to suggest the triple lock had reduced pensioner poverty, saying instead that its introduction in 2011 had actually caused poverty levels to rise as the state pension age increased, "which bit hardest for those on the lowest incomes".
He said: "I regularly read people saying the Triple Lock has driven pensioner poverty down. But that’s wrong, as the timeline of pensioner poverty changes this century spells out."
The Institute for Fiscal Studies has also supported his claim that a triple lock will remain in place - although it has raised some questions about the proposals. Meanwhile, speaking on Sunday, Conservative leader Kemi Badenoch told the BBC's Sunday With Laura Kuenssberg show: "There are good people on all sides who have arguments about the triple lock, but our policy is to keep it. The reason why is because what is going wrong in our economy is not lots of elderly people earning £10,000, £12,000 a year on the state pension.
"It is the huge number of people who can work who don't work. In 2010, when the Conservative coalition started, what we saw was a lot of pensioner poverty. That policy was brought in to fix that."
