Labour MPs agree with former Prime Minister Sir Tony Blair that the state pension triple lock is “unsustainable” and should be axed.
However, Sir Keir Starmer’s MPs also believe that ditching the annual state pension increase guarantee is too politically toxic for the Labour Government to attempt.
The triple lock policy states that the state pension will rise every year by the same level as inflation, average earnings growth or 2.5 per cent – whichever is highest.
It is unfair on young people by prioritising older people for the most generous state support, some Labour MPs told The i Paper.
And yet backbenchers fear that it would be “electoral suicide” for the party to waver from its manifesto promise to uphold the pension guarantee.
Time to be honest with the public, says Blair
Blair said the generosity of the triple lock – brought in by the Conservative-Liberal Democrat Government in 2010 – was “not affordable” in the long-term.
It is time to be “honest” with the public that the Government was spending and borrowing too much, the former Labour PM told BBC Radio 4’s Today programme on Wednesday.
Treasury minister Dan Tomlinson quickly rejected the call, arguing that the triple lock was sustainable in the long-term.
Former Labour PM Tony Blair says triple lock not affordable in the long-term (Photo: Dante Fernandez/AFP)But many Labour MPs concur with Blair on the triple lock, even if they don’t support all the ex-leader had to say in his 5,700-word essay on where the party had gone wrong.
One told The i Paper that most of their colleagues on the backbenches agreed with Blair, rather than Tomlinson.
It would be “right” to examine how to end the triple lock for the good of the public finances – and potentially free up money to reinvest in young people, the Labour backbencher said.
“However, it’s not electorally beneficial,” the same MP added. “It’s electoral suicide for anyone who pursues it.”
Silence over triple lock ‘ludicrous’, says Labour MP
Some are frustrated at the ongoing silence on the issue and hope it can be discussed this year, as the party braces itself for possible leadership challenges by Wes Streeting and Andy Burnham.
One Labour MP, who believes the triple lock is “unsustainable”, thinks there is a chance for the party to debate the best ways to end it as part of a wider debate on welfare spending.
“Everyone knows it [the triple lock] is not sustainable,” the MP told The i Paper. “Labour MPs know, opposition MPs know. No-one wants to touch it, but it’s ludicrous to avoid it when we have these generational problems. It can’t go on forever.
“You have to look at shifting generational funding from older people to younger people. Young people need to know we’re a party that cares about them,” they added.
The triple lock means that over time, pensioners’ incomes grow faster than either prices or the salaries of working people.
No 10 wary after winter fuel fiasco
However, some left-wing Labour MPs said it was important to stand by its promise to pensioners, many of whom are still struggling to keep up with the cost of living.
“In one of the richest countries in the world we ought to give pensioners dignity and security in retirement,” Jon Trickett, MP for Normanton and Hemsworth, told The i Paper. “After all, they helped to create the wealth in the first place.”
Clive Lewis, Labour MP for Norwich South, quoted the liberal economist John Maynard Keynes, who once said: “Anything we can actually do, we can afford.” Lewis, a strong supporter of Burnham, added: “Blair speaks for his class. Keynes spoke for all of us.”
Kim Johnson, Labour MP for Liverpool Riverside, said many voters felt “abandoned” by the winter fuel fiasco. Urging against any move to end the triple lock, she said: “We are the sixth richest economy in the world – we have the wealth to support those in need and to ensure everyone can live in dignity.”
Labour MP Chris Curtis, chair of the Labour Growth Group, told the Politics Inside Out podcast in November that it was “mathematically impossible” to keep the triple lock forever. “This is a conversation that we’re going to have to have at some point. The question is, at what point?”
Starmer has repeatedly committed to maintaining the triple lock for the duration of this Parliament. Its future beyond the next election appears uncertain – but it will be difficult to drop the policy, even in the next general election manifesto.
A No 10 source previously told The i Paper: “All other things being equal, we wouldn’t include it in the next manifesto. But we were so badly burnt on winter fuel, the appetite for going after pensioners again is zero.”
Economists say triple lock makes ‘little sense’ – but difficult to end soon
Economists have argued that the triple lock will become increasingly expensive as the population ages. Willem Buiter, an economist and former member of the Bank of England’s monetary policy committee, said the triple lock “makes little sense and could become unsustainable”.
David Gauke, a former Conservative Treasury minister, told The i Paper that Blair was “right to say that the triple lock is unaffordable”.
Gauke backed the recent Institute for Fiscal Studies (IFS) proposal that once the state pension has hit a certain percentage of average earnings, the triple lock should be abandoned and state pension increases kept in line with average earnings.
However, Steve Webb, the pensions minister when the triple lock was introduced, said it would be a “huge step” to scrap it anytime soon.
“Nothing lasts forever”, said the former Lib Dem minister. But Webb argued that there was a good case for keeping the triple lock for “at least another couple of parliaments”.
Webb, a partner at financial services firm LCP, said the triple lock was brought in to “undo 30 years of damage” to the state pension when it was linked it to prices and fell behind wages.
“So it’s not absurd to have a policy aimed at mending things remain in place for a long as the damage was done,” he added.
The Government was approached for comment, but referred to Tomlinson’s comments earlier on Wednesday.
Asked whether the triple lock is sustainable, Tomlinson told Times Radio: “I think it’s the right policy, it was in our manifesto and I think it’s important that we make sure we’re protecting pensioners and protecting their living standards.”
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