Altmann calls on peers to block triple lock scrap

Former pensions minister Baroness Ros Altmann has called on peers to support amendments to legislation that would see the triple lock kept in its current form but with adjustments for the pandemic.

The move would see the legislation sent back to the House of Commons for MPs to analyse whether the wages element of the triple lock needs to be suspended next year.

Altmann pointed out that the 1992 Act states when reviewing how to uprate the state pension, “the secretary of state shall estimate the general level of earnings in such manner as he thinks fit”, giving the government the power to adjust the earnings figure of 8 per cent to a lower number.

“The bill to abandon the triple lock will be debated on (November 2) in the Lords and I am determined to try to ask peers to support amendments that would keep the triple lock, ensure that the secretary of state can adjust for any upward distortions on earnings from the pandemic, and protects pensioners, particularly the poorest, as they were promised in 2019,” Altmann said. 

“I believe millions of pensioners deserve better treatment. It’s time for parliament to stand up and protect good citizens. What are we there for if not to try to stop dangerous policies that are based on false information.”

In September, the government suspended the wages element of the pensions triple lock for one year to avoid a disproportionate rise in the state pension following the pandemic.

Under triple lock rules the state pension is increased by the highest of earnings growth, price inflation, or 2.5 per cent a year.

But Altmann pointed out that the Office for Budget Responsibility has now estimated that average earnings growth will come in at 5 per cent this year, lower than the 8 per cent the government has previously warned about.

She also said the MPs’ decision to scrap the earnings link was based on a “false premise”.

Altmann said MPs were asked to approve the measure after being told the only alternative to taking away the triple lock would be to uprate state pensions by more than 8 per cent, reflecting the ONS’s earnings figure for July. 

“They were told this would cost an extra £5bn. It was on this basis that parliament decided to abandon the manifesto commitment to protect pensioners, and the legislation passed through all the stages in the Commons in two and a half hours, with very few MPs present. However, these statements misrepresent reality,” she said.

She also highlighted that abandoning the triple lock for pensioners was the biggest spending reduction in the Budget.  

The Budget Red Book showed that by not sticking to the triple lock and instead using the 3.1 per cent consumer price index to increase the state pension by next year, the Treasury expects to save £5.4bn in 2022-23, rising to £6.1bn in 2023-34.

Altmann said: “In the next five years, over £30bn will be taken away from pensioners, leaving more than 12m citizens worse off.

“Too many chancellors have eyed pensions as a tempting target to raid when they want to find large sums of money. But pensioners should not have their pockets picked to fund projects for cash-strapped governments.  

“Society has a duty to look after its elderly citizens. Even increasing pensions by 5 per cent would still save around £3bn and protect pensioners in line with earnings.”

This article originally appeared on FTAdviser.com