Ministers face mounting calls to reform how the value of the state pension is calculated to free up money to spend on defence.
British armed forces face cuts of up to £6 billion this parliament, The i Paper reported, despite pressure on Keir Starmer and Rachel Reeves to boost funding for defence amid rising threats, particularly from Russia.
And there are calls in Westminster for the government to reduce the amount spent on the social security bill – pensions and benefits – which is due to reach almost £323bn in 2025/26.
Around 55 per cent of this is spent on pensioner benefits, including £146.1 billion on the state pension. Meanwhile a projected £145bn will be spent on working age benefits and children, £77.1bn on disabled people and those with health conditions and £37.3bn on housing support.
This compares to £62.2bn to be spent on defence this financial year, and reports that the MoD is being asked to make £3.5bn in cuts.
‘ Boomers moan and moan but paid tuppence ha’penny for their homes’
The state pension triple lock, which ties the value of the pensioner income to the highest of either 2.5 per cent, average wage increases or inflation, has seen the income of pensioners rise considerably over the past few years due to high inflation.
But Labour, the Conservative Party, Liberal Democrats and Reform have all committed to retaining it, despite what one government source suggested was an increasing acknowledgement that it was becoming unaffordable.
They said there was a political stand-off among the main parties, with none willing to publicly admit the unsustainable cost of the triple lock.
“Everyone talks about welfare cuts to pay for defence but they’re not talking about the real issue with the benefits bill, which is the triple lock,” the source said.
“The problem is no one will go first, including Reform. Everyone thinks privately it should be scrapped, all of us, all of the Tories. We couldn’t believe it when Reform came out in favour.”
They said that the value of the state pension was at odds with the rising costs faced by younger voters, including graduates struggling to pay high interest student loans.
“Look at the poor sods paying their student loans off and this bunch of boomers who moan and moan but paid tuppence ha’penny for their own homes. But no one has the guts to do it,” the source added.
Labour’s former deputy leader Harriet Harman suggested earlier this week the government should look at means testing the state pension triple lock in order to raise more money for defence.
While some Labour MPs privately say the government needs a more “strategic” approach when it comes to how to respond to an aging population and the cost of it, many disagree with the premise of means-testing.
Harriet Harman calls for triple lock to be means tested
The suggestion was dismissed by one Labour MP who told The i Paper: “I don’t agree with Harriet, we do urgently need to invest in defence but in a Labour way.”
Baroness Harman, who was Social Security Secretary under the Blair administration, told BBC Radio 5 Live on Tuesday the triple lock is “one place to be looking” if we need to “divert some money to defence”.
She said: “I think that the triple lock perhaps ought to have some sort of targeting in it, but they need to start at quite a high level. So it’s really only very well-off people who start getting a triple lock…unlocked.”
Former Tory defence secretary Malcolm Rifkind told GB News the government will have to “take difficult decisions” in order to increase defence spending.
“There are only two other ways in which you can fund this. One is by reducing welfare spending, and the second is by increasing tax, either income tax or VAT or a combination of these,” he said.
“None of us know for certain what the public’s view would be when given to choose between welfare spending and defence, it would depend whether they were used to receiving welfare spending. But that cannot be the criteria.”
Because of the way the triple lock is calculated, estimates for how much will be spent on the it into the future vary.
Pension bill could rise by £80bn in next 50 years
The Institute for Fiscal Studies said in 2025 the state pension could rise by around £80bn in today’s terms by the 2070s, “but under a more volatile economic environment the triple lock could cost an extra 1.5% of national income – or £44 billion – on top of this”.
As a result, it is difficult to know how much money would be saved by changing it to calculate the pension rise a different way, with estimates ranging between £3bn and £10bn a year.
The government has dismissed any suggestion it would change the policy within the current term.
A Department for Work and Pensions source said: “We’re committed to it for the whole of this parliament.”
They pointed to a recent statement given in Parliament by Pensions Minister Torsten Bell, who told MPs: “The yearly amount of the full new state pension is projected to rise by about £2,100 over the current Parliament, reflecting this Government’s commitment to the triple lock for its duration.”
A Conservative Party spokesman said: “If we had growth of 3 per cent upwards, the triple lock wouldn’t be such an issue for our economy. So one of the things we need to do is get the economy growing… We kept the triple lock throughout our time in office.
“The triple lock is important. The triple lock is there for people who have worked their whole lives. What we want to tackle are those who aren’t working.”
Former Labour shadow chancellor John McDonnell warned ministers against attempting to shave money off the welfare bill to fund defence. A previous attempt at cutting the value of disability benefits was blocked by Labour MPs.
“It would be disastrous for the government to try another round of welfare cuts, which would not secure the support of Labour MPs,” McDonnell told The i Paper.
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