Labour leader Jeremy Corbyn commits to triple lock on state pension

27 September 2018

Jeremy Corbyn has committed to maintaining the triple lock on the state pension should the Labour Party win the next general election.

The pledge would ensure that the state pension would continue to increase each year in line with the highest of inflation, earnings or 2.5%.

This is currently normally decided in the Chancellor's Autumn Budget, which this year falls on 29 October. 

Speaking at the Labour Party conference in Liverpool, Mr Corbyn made a series of promises to increase Labour’s appeal to older voters.

In addition to his commitment to the triple lock, the Labour leader also vowed to protect the winter fuel allowance and free bus passes for over 65s. 

He also reconfirmed a manifesto promise to create a National Health and Care Service. 

The triple lock has long been politically contentious and was a significant battleground in the 2017 General Election.

Both Labour and the Liberal Democrats promised to maintain it for the next parliament, while the Tories proposed ditching the 2.5% link and only having a ‘double-lock’ from 2020.

However, even though the Tories scraped a win in the general election it was forced to abandon its proposed changes to the triple lock in the deal it struck with the DUP, to secure its working parliamentary majority.

More recently, in July this year, the Treasury Committee – a cross-parliamentary group of MPs – described the triple lock as ‘unsustainable’  and recommended replacing it with an earnings uprating.

Commenting on Mr Corbyn’s announcement, Tom Selby, senior analyst at AJ Bell says it is hard to quantify how much protecting the triple lock will cost because it is linked to the performance of the wider economy. 

“What we do know is that the amount of the state pension increased by 22.2% between 2010 and 2016, compared to earnings growth of 7.6% and CPI inflation of 12.3% over the same period.

"If the triple-lock is retained over the longer-term the costs could spiral, with estimates from the independent Office for Budget Responsibility suggesting extra spending of £35 billion in today’s terms if the triple-lock is retained by 2060/61, versus £15billion under earnings indexation only,” he says. 

Mr Selby also warns that Labour must be mindful of fuelling the intergenerational divide.

He adds: “Aside from the billions of pounds extra the triple-lock could cost the Exchequer, it is hard politically to justify increasing the retirement incomes of Baby Boomers at a faster rate than younger generations – especially when it is younger generations’ taxes that ultimately fund the guarantee." 

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