Boris Johnson is “fully committed” to the triple lock, his spokesman declared today – even though it could hike pensions by an estimated 6% next year.
Pensioners could enjoy a bumper rise next April, much more than working-age benefits or the wider economy, due to wages bouncing back after the Covid pandemic.
The ‘triple lock’, enshrined in Tory manifestos, hikes the state pension by 2.5%, inflation or average earnings growth – whichever is highest.
But the most recent figures show average earnings grew by 5.6% in a year – partly because they were badly hit by Covid this time last year.
If maintained in statistics later this summer, this would trigger a huge boost to pensions in April 2022 – and tensions with Chancellor Rishi Sunak over how to pay the reported £4billion bill.
Yet Downing Street today insisted the Prime Minister was “fully committed” to the triple lock despite fears of having to afford a 6% rise.
Asked if the PM could rule out a one-year suspension of the lock, Boris Johnson’s spokesman made a noise that sounded like “yeah”, followed by: “As we said last week, we are committed to the triple lock.”
He added: “We made a commitment around the triple lock. The government made a commitment at the last election, and plans to stick to that commitment.”
Asked personally if he could axe the lock, Mr Johnson said: “I’m reading all sorts of stuff at the moment which I don’t recognise at all about the Government’s plans.”
The 2019 Conservative manifesto said bluntly: “We will keep the triple lock.”
But average weekly earnings grew year-on-year by 5.6% in the three-month period between February and April this year.
Usually the triple lock is calculated based on the annual rise in earnings to the “May to July” period – and these are published in mid-August.
There do appear to be loopholes the government could take advantage of to avoid having to pay roughly 6% extra.
For example, it is in ministers’ power to change the exact way in which “earnings growth” is calculated. There is no suggestion this option is under active discussion.
Boris Johnson’s spokesman said today: “We are committed to the triple lock.
“It is important to say that the final figures are still unclear and the uprating work takes place in the annual review, which takes place later this year.
“… There is significant uncertainty around the trajectory of average earnings and whether there will be the spike that has been forecasted.”
The Chancellor is reportedly considering cutting the £1 million pensions lifetime allowance, bringing in a single tax relief rate, or new taxation on employer contributions.
“Pensioners are going to be doing extremely well. It’s not politically that difficult a thing to smooth it out for a year,” a source told the Sunday Times.
But Business Secretary Kwasi Kwarteng told Sky News: “Lots of things have been discussed in government, I don’t think that that’s necessarily the way forward. I’m pretty sure the triple lock will stay.”