No less a figure than Nelson Mandela once said “a society that does not value its older people denies its roots and endangers its future”. We can assume he wasn’t specifically referring to the question of the triple lock pension, but he might have been.
This instrument of welfare spending was brought in by the Conservative-Lib Dem coalition government in 2010 as a way of ensuring that the state pension did not fall behind inflation, protecting the country’s older population from a gradual erosion of their standard of living.
To some, it was a noble and generous policy – the so-called triple lock meant that pension income rose each year by the highest measure of the following: wage growth, inflation or 2.5 per cent. To others, however, it was little more than an electoral bribe: general election turn-out among the over-60s is around 80 per cent, so the triple lock has continued to be a vote-winner at elections ever since, and is now considered almost an established part of mainstream political doctrine.
And that is why, crudely, the Reform party has announced that preserving the triple lock will be one of its key commitments before the local elections next month. Roughly a third of Reform voters are over the age of 65 – a group which, when polled, were 86 per cent in favour of the triple lock – so it makes electoral sense, despite Nigel Farage’s own reservations (he has said that the UK’s pension spending was “unaffordable on a national level”).
Whether it amounts to political expediency or not, the more pertinent question is whether the triple lock is fair. Does it disadvantage younger generations, taking state spending away from essential services and handing it to a demographic group which has had the benefit of decades of economic growth, relative stability and a boom in property ownership? It benefits all pensioners, including those comfortably well-off, and meanwhile, younger workers face the pressures of pay restraint, rising costs, student debt, above-inflation rent increases, and – not least – job insecurity caused by the march of technology.
The triple lock may be viewed as quietly corrosive to the social contract between generations, but a more tangible concern is whether we can even afford it? According to the Office of Budget Responsibility, it is a fiscal time bomb, an unsustainable piece of public spending that, in times of low inflation, will run the risk of imperiling government investment in everything from health to education.
What was meant originally as a short-term measure to reassure pensioners that they would keep pace with inflation has turned into an enduring pledge of the future spending of money the Government cannot be sure it will have. And so the triple lock has turned into more of a trap, an unfeasible and unwise electoral promise that has now ensnared parties from across the political spectrum (only the Greens propose abandoning the 2.5 per cent minimum rise).
There would appear to be no moral case for maintaining the triple lock in its current form. The world has changed beyond recognition in the past 15 years, and for young people in particular, it is a much more unforgiving place. To saddle them with unsustainable future spending on pensions – the combined effect of an ageing population and the triple lock – is unconscionable.
But maybe the argument should be framed in a different way. Shouldn’t we be talking about wealth and not age? Pensioner poverty is still a major issue in the UK, and one of the reasons the triple lock came into existence was that, for decades, pensions had not kept pace with inflation. It was simply not right that, as they got older, people would get progressively poorer. Britain still spends proportionately less on pensions than any other nation in the G7.
As Nelson Mandela believed, how we treat our old people says much about us as a nation, and we must treat our growing cohort of pensioners with dignity. The problem with the triple lock is that it is a catch-all policy that benefits old people on the poverty line as well as those sitting in multi-million pound houses with no mortgage, or who have appreciating private assets. Isn’t this an argument for a one-off wealth tax? In other words, keep the triple lock, but pay for it by levying a tax on those with private wealth.
I know this another political hot potato – electorally incendiary, even – but it seems to me that we have highly dangerous, intergenerational dissonance and, instead of focusing on people’s age, we should focus on their wealth. Isn’t that what progressive taxation is supposed to do?
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