State pension triple lock poised for axe as Tory MPs back Sunak to change policy
State pension freeze: Lord Jones raises issue of ‘unfairness’
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A growing number of backbenchers are sympathetic with the situation faced by Chancellor Rishi Sunak. They are prepared to back him on temporary measures to stop state pensions soaring by up £746.20 a year.
Their support will be a relief for Mr Sunak who has been looking at whether to scrap the Conservatives’ manifesto pledge.
The Conservatives pledged to raise pensions by 2.5 percent, the rate of inflation, or average earnings, whichever is highest, at the 2019 election.
The pledge was originally made by the Conservatives in 2010 and has remained Government policy ever since.
Earnings have been distorted over the past 16 months due to the number of workers on furlough.
With millions returning to work, earnings are set to be artificially boosted by up to eight percent.
One Tory MP told this website: “The rise is silly based on the unusual circumstances we’ve just had.
“The biggest problem is that changing it may isolate some of our core voters. It needs a workaround.”
Another said: “I wouldn’t have thought it can stay as it is.”
They suggested a good compromise would be to introduce a temporary pensions tax, allowing the Treasury to recoup come of the cost of the policy.
They said: “Wealthy pensioners will pay a proportion of it back in tax, poorer pensioners who need it will keep all of it.
“If you’ve got £12,000 tax-free allowance for pensioners who don’t have that much income, they’ll keep all of it.”
A former Cabinet minister added they had “some sympathy” with the Government as “we have to get our economy back on an even keel and must prioritise economic growth”.
Ministers are thought to be phoning round MPs to ask for their views on the triple lock.
It is thought Mr Sunak will unveil a new method for measuring average earnings in the autumn that will allow him to stick to alter the pledge without dropping it completely.
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“They’re looking at different ways to measure it, like a three-year average on pay increases,” another former cabinet minister said.
Hinting that such a change to the pensions formula is under way, the Prime Minister’s official spokesman yesterday admitted the numbers were “under review”.
He said: “We’ve got to ensure fairness for both pensioners and taxpayers.
“The Chancellor has said previously that the triple lock is Government policy.
“But we’ll recognise people’s concerns.
“We will obviously keep figures and numbers under review, as we always do, and take any decisions at the appropriate time.”
However, despite growing numbers, not all Tory MPs are on board with a change to the triple lock.
“Once you’ve made commitments in your manifesto, I think you’ve got to be very careful how you’re altering it,” one said.
“I’d have a re-evaluation of lots of other costs like HS2 before I’d start unpicking the triple lock.”
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