Time to scrap triple lock, says former work and pensions secretary

Marina Gerner
28 November 2016
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The state pension triple lock introduced by David Cameron has 'served its purpose' and should be scrapped or at least modified, former pension secretary and Tory MP Stephen Crabb has said.

In an interview with Sky News, Mr Crabb said he felt there was both a moral and fiscal case to reconsider the former prime minister's promise to annually raise the state pension by at least either 2.5% or the increase in inflation or earnings - depending on which is highest.

Instead, he suggested a lower floor of 1.5% as an alternative to shave billions off the welfare budget.

Mr Crabb briefly held the post of work and pensions secretary, between March and July. He resigned after reports about his family life.

"It is morally the right thing now to look at whether we can achieve a fairer spread of welfare spending so that working-age families, younger people, also get a fair crack at society," he said.

His suggestion follows calls from the Commons Work and Pensions Committee earlier this month.

The committee conducted an inquiry into intergenerational fairness and concluded that the state pension triple lock should be scrapped before it worsens an economy already 'heavily skewed' towards baby boomers and against millennials.

 

2.5% figure "doesn't relate to anything in the economy"

Originally, the idea goes back to former pension minister Ros Altmann, who suggested moving to a double lock after 2020 to give pensioners the better of either prices or earnings inflation.

She said: "It is dangerous for public finances and for pension policy as a whole to bake in a 2.5% figure that doesn't relate to anything in the economy.

"Moving to a double lock leaves it to the government of the day to assess the state of the economy and adjust pensions accordingly.

"And actually, when you do the numbers, you save a lot more money by changing the uprating of the pension than you do by increasing the state pension age."

Dr Altmann pointed out one problem with continually raising state pension ages is that it is unfair on certain groups in society, because there is a marked variation in life expectancy: low earners, people with heavy manual labour jobs and those who live in industrial areas have lower life expectancies.

But any attempt to change the benefits of pensioners will be met with resistance from the powerful 'grey vote' which is why Mr Cameron protected the retired from the austerity cuts.

In last week's Autumn Statement, Philip Hammond announced that the triple lock will remain in place for the remainder of this parliament until 2020.

Mr Crabb conceded there are 'political challenges around changing anything to do with the triple lock'. Nevertheless he argued it should be debated because it poses an acute 'spending challenge' to future governments and generations arising from the pension time bomb.

This article orginally appeared on our sister website, Money Observer.

 

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