Senior Tory MP calls for pensions triple lock to be scrapped

The Chancellor is facing growing pressure to suspend the pensions ‘triple lock’ that keeps incomes rising for pensioners in the face of an unprecedented coronavirus economic crisis.

The UK Government is reported to be considering abandoning the pensions 'triple lock'
The UK Government is reported to be considering abandoning the pensions 'triple lock'

Rishi Sunak is reported to be considering scrapping the policy that ensures the state pension rises in line with inflation, average earnings or 2.5% - whichever is greater.

Downing Street has ruled abandoning the triple lock, which was a manifesto commitment at the election in December, but the chairman of the Commons Treasury Committee has warned the policy is unaffordable because of the pressure on public finances.

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Conservative MP Mel Stride said: “The pensions triple lock will produce unintended consequences in its current form.

“This is largely due to the fact that in 2021 there will be a very significant increase in average wages relative to the level this year, which will have been depressed by millions of workers on furlough.

“Inflation is also significantly lower than anticipated prior to the crisis, which will take some pressure off living costs.

“The Chancellor will need to address the lock by carefully balancing the importance of protecting the income of older people, who often have limited opportunities for increasing their earnings, against the impact on the public finances.”

Mr Stride added: “A way forward might be to temporarily suspend the wages element of the lock.

“This might not entirely conform to the Conservative Party manifesto, but I think most people would recognise that a potential double-digit percentage increase is unrealistic.”

The triple lock has been in force since 2010. Downing Street this week played down reports that it will be abolished as a result of the coronavirus crisis, with a source telling a Westminster briefing: "These are unique and challenging economic circumstances and we cannot hide from that.

"As you know, decisions on tax and pension policy are set out at Budget by the Chancellor but there are no plans to abolish the triple lock and we will always stand by pensioners."

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Asked if it could be suspended for a year or two, the source said: "I'm not going to speculate on what inflation might be in future."

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