Tory peer says pension triple-lock has 'outlived its purpose', as Keir Starmer vows to keep it for at least five years

28 April 2024, 11:51 | Updated: 28 April 2024, 12:16

The pension triple lock has 'outlived its purpose', Tory peer says as Starmer pledges to keep it

A Conservative peer has said the pensions triple lock should be scrapped because it has outlived its purpose, after Keir Starmer vowed to keep it if he becomes Prime Minister.

Lord David Willetts said that in 2010, when David Cameron installed the triple lock - which sees state pensions rise by whichever is highest out of the rate of inflation, average earnings or 2.5% - his argument was that "the value of the pension had fallen behind other benefits".

The former minister told Iain Dale: "But I think politicians should now declare victory and move on because... the average income after housing costs of a pensioner is if anything now higher than for a working age family, and the poorest 20% of pensioners are better off than the poorest 20% of families."

Lord Willetts, now the chairman of the left-leaning Resolution Foundation think tank, said: "So it's no longer the case that being a pensioner equals being poor. And this is an expensive long term commitment. It's done its job".

Both the Conservative government and Labour have vowed to keep the triple lock.

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Labour leader Sir Keir vowed to keep the pledge for all five years of the next Parliament.

If his party wins the next election, Sir Keir will keep the policy which was first implemented by David Cameron's Conservative party in 2010.

Sir Keir wrote in the Sunday Express: "Britain's pensioners deserve better. They deserve certainty, and for politicians to be straight with them so they can plan their lives.

"That's why I'm guaranteeing the pensions triple-lock with be in the Labour manifesto and protected for the duration of the next parliament."

The move to guarantee the policy came after Tory Chancellor Jeremy Hunt did the same.

The two major parties making this pledge all but guarantees the promise will be on the manifesto of the incoming Government.

The over-75s are the only age group in which the Tories currently have a poll lead.

Older voters are also more likely to vote than younger counterparts - making the so-called "grey vote" a crucial demographic for parties to court.

Before the triple-lock was brought in, state pensions rose in line with the Retail Prices Index (RPI) measure of inflation, which was consistently lower than 2.5 per cent.

The triple lock guarantee has seen pensioners' incomes grow at almost double the rate of the average worker, according to an assessment by the Institute of Fiscal Studies.

A report from the Government Actuary's Department said the guarantee cost the government an extra £6 billion a year in 2015-16, with pensioners earning the highest share of average earnings since April 1988.