Prime Minister Andy Burnham could be forced to abandon the state pension triple lock to afford his ambitious social care reforms, according to a new analysis. The triple lock, which guarantees annual increases in the state pension by the highest of inflation, average earnings growth, or 2.5%, costs the Treasury between £12 billion and £12.6 billion each year, estimates from the Institute for Fiscal Studies show.
Funding the Social Care Overhaul
Burnham yesterday unveiled plans to revolutionise social care in England, but did not specify how the changes would be funded. Estimates suggest the reforms could require around £18 billion annually. Stephen Millard, deputy director for macroeconomics at the National Institute of Economic and Social Research (NIESR), told GB News that the triple lock is "very, very expensive, and will get more expensive as we age." He added that there is "clearly no means by which the Treasury could fund the changes within existing budgets," leaving tax rises or spending cuts as the main alternatives.
Burnham acknowledged that "difficult, difficult decisions" on tax might be needed, but reiterated Labour's manifesto commitments not to increase workers' income tax, national insurance, or VAT rates. He suggested that any tax hikes for social care could be included in Labour's next election manifesto, saying: "We will put them before the country at the right time, and we will hopefully proceed with people's consent."
Political Gamble
The Prime Minister, whose father has Alzheimer's, promised to help "my dad and the millions like him" facing an unfair system. He argued that fixing social care could save the NHS billions of pounds per year, which could help fund the reforms. Burnham called the failure of successive governments to address the crisis a "major dereliction of public duty."
He indicated he was prepared to risk his political reputation, saying: "I know this will require me to put what political capital I have on the table and it could wear down that political capital in some ways. But I'm prepared to do it. I'm prepared to do it because this has gone on too long. The risks of failing to act are too great."
