Downing Street delivered another hint that the state pension triple lock could be watered down amid concerns over COVID warping of wage figures.
A spokesperson for the Prime Minister said they recognise people’s concerns about the prospect of the mechanism resulting in an 8 per cent rise, squeezing the public finances even further.
No 10 stressed the government has to ensure fairness for both taxpayers and pensioners.
The comments came after Work and Pensions Secretary Therese Coffey raised an eyebrow by saying ministers would be driven by the data as to whether to make any changes.
The Tory manifesto committed to keeping the triple lock, ensures that the state pension increases by the highest rate of inflation, earnings or 2.5 per cent.
However, there’s been growing alarm at the possible scale of the increase this year amid the pandemic.
Economists say the effects of furlough and the pandemic are distorting the figures, and average wage increases could reach 8 per cent by the quarter to July, which is used for setting the state pension. That would push up costs for the Treasury by more than £3 billion a year.
The Prime Minister’s spokesperson said that the Chancellor had said previously that the triple lock was government policy, but that they recognised people’s concerns, and that they had to ensure fairness for both the taxpayer and pensioners.
According to the latest official data, total wage growth excluding bonuses spiked to 6.6 per cent in the three months to May, but experts think it will go even higher, and there’s been speculation that the government might opt to take an average from the past three years.
The Office for National Statistics appeared to give the Chancellor a new option earlier this month by providing an estimate of underlying wage growth.
It said the true rate of earnings increases was probably between 3.3 per cent and 4.4 per cent.
Paul Johnson, head of the respected IFS think tank, said the triple lock legislation allowed wiggle room over the definition of earnings growth and using the underlying measure would still be generous.
Treasury sources have insisted they will wait until the autumn to decide on the pension increase while admitting that this year will be an anomaly.
What the government should be doing is leaving the pensions alone and quit picking on the vulnerable. They already rob pensioners of thousands a month, and leaving pensioners in total poverty, while they try to persuade the rest of us that they’ve protected them with lockdowns, masks and vaccines – did Boris Johnson forget that most pensioners vote, and he’s doing nothing but making the pensioners irrate.
And as usual, the government are going back on their word, but I bet they give themselves a great big pay increase, and if this is the case, you may as well throw your vote away, rather than vote for the Tories.
I think there will be a lot of people who won’t vote for them again, but then you have to consider the alternatives because there doesn’t seem to be any party that’s worth voting for – they all promise you that there going to do this and that and then never come up with the goods, in fact, they just reverse everything they promised.
What’s the point of a manifesto pledge if they’re not going to adhere to it. That doesn’t exactly demonstrate fairness.
The majority of pensioners worked hard to pay into the system for over 40 years, but now council taxes rise annually to help cover the cost of illegals, their hotels, spending money, healthcare, lawyers, interpreters et cetera. This just proves what contempt the government are showing us, and what the out of touch chancellor has for the elderly.