Andy Burnham’s plan to put free social care in Labour’s next general election manifesto could be part of a grand bargain to drop the state pension triple lock, Labour MPs believe.
A Labour MP told The i Paper that introducing the NHS-style care service would be a “politically smart” way to “sugar the pill” of finally scrapping the lock, while a party insider said it could be sold as “taking [something] away when you’re in your 60s but giving it back when you’re 80”.
On Sunday, the Prime Minister kicked off Labour’s annual conference in Liverpool by vowing to put forward a plan to voters at the next election in which “everyone contributes, everyone is covered” for social care.
Burnham told the BBC that there were “commitments” in Labour’s 2024 manifesto – which he has promised to stick by – which “would make it hard” to introduce free at the point of use social care in this parliament.
The 2024 manifesto committed not to increase income tax, national insurance or VAT, but also promised to retain the triple lock – under which pensions rise each year in line with the highest of earnings, inflation or 2.5 per cent.
In private, many MPs across the political spectrum confide that the lock is fundamentally unsustainable over the long term.
The policy has ended up being much more expensive than it was expected to be when it was introduced by Conservative chancellor George Osborne in 2011, with the Office for Budget Responsibility (OBR) forecasting that by 2030 it will cost £15.5bn a year – three times its original estimate.
However, parties have been reluctant to publicly come out against the policy for fear of incurring the wrath of pensioners, who are the demographic group consistently most likely to vote.
A Labour MP said: “There are lots of Labour MPs who would like to see the triple lock go but will be worried about the political reality of doing so given pensioners – unlike young people – actually tend to vote.”
But following Burnham’s offer on social care, some think it could be the crucial quid pro quo for ditching the mechanism.
A Labour MP from the 2024 intake told The i Paper. “It would be politically smart.
“The triple lock absolutely must go… using some of the proceeds to seed social care would sugar the pill a bit”.
Another MP agreed that it could be part of a “package to drop the lock”, along with more support to get young people into work. “It’s good they are starting this conversation,” they added.
A Labour insider said Burnham could attempt to use cross party talks on social care to get agreement to scrap the lock, given that an unwillingness to move first is often blamed for the ongoing consensus behind the policy.
“You have to do something about it – if you just keep raising the state pension at inflation or above forever it will eventually be 100 per cent of GDP,” they said.
Linking it to social care would allow the Government to say “we’re taking away when you’re in your 60s but giving it back when you’re 80, when you need it more”, they added.
Darren Jones, an ex-Cabinet minister under Starmer, said that getting rid of the triple lock is “an option that the Government should consider alongside others” for funding Burnham’s plans.
Scrapping the triple lock alone would not pay for free social care. The cost of a free at the point of use care system has previously been estimated at as much as £18.5bn, although on Sunday Burnham insisted: “It’s not that high.”
The British Chambers of Commerce has estimated that moving to a “single lock” where pensions increase in line with inflation would save £3.3bn over two years.
The Resolution Foundation think-tank has meanwhile said that moving to an Australian-style system where pensions track earnings growth but are protected from temporary price shocks, would deliver savings of about £650m in 2029-30 which would continue to grow over time.
Speaking in Liverpool, Chief Secretary to the Treasury Emma Reynolds suggested tax rises would be needed to fund the policy, saying tackling the challenge “isn’t going to be cheap”. She noted that the Prime Minister had indicated any long-term solution could require a public mandate and “might involve tax changes”.
A backbencher cautioned that Burnham would have to tread carefully. “We will need to try and secure a cross party consensus on adult social care,” they said.
“We saw the risk of removing pensioner support with winter fuel allowance and Theresa May almost lost in 2017 on getting this wrong.”
They added: “I suspect nothing has yet been decided.”
In the 2017 election, Theresa May proposed replacing the triple lock with a “double lock” where pensions would rise by the higher of earnings or inflation and introducing social care reform that would have required people with assets worth more than £100,000, including their home, to contribute more towards their care costs.
The policy was dubbed a “dementia tax” and widely credited for May losing the Tories’ majority in the election.
A senior Treasury source refused to speculate on whether the triple lock could be axed to pay for social care.
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