Burnham Under Pressure to Axe Pension Triple Lock to Fund Social Care: Is It Electoral Suicide?

Andy Burnham is expected to address the future of the triple lock pension today, a politically sensitive issue that could have significant implications for his government. Economists have warned that the system creates high and uncertain costs for the future, while others say scrapping it could amount to electoral suicide.

The Prime Minister is expected to address the issue on Tuesday, 29 September, the third day of the four-day Labour Party annual conference at ACC Liverpool. According to the Telegraph, Burnham is expected to say that the triple lock is not working in its current form and suggest that it should be reviewed in the party's next manifesto.

£154 billion Annual Spending

The triple lock raises the state pension each year, in April, by whichever is highest: inflation, average earnings growth or 2.5 per cent. Its supporters see a guarantee while critics see an open-ended bill that will only continue to cost the government money.

According to the Institute for Fiscal Studies (IFS), the government is expected to spend £154 billion ($203.9 billion) on the state pension this year. 'It is by far the largest benefit in the UK. Compared with department spending, it is similar in magnitude to the combined annual budgets of the Ministry of Defence and the Department of Education,' an IFS report stated.

Reforming the triple lock pension could give Burnham greater financial leeway to implement his promise of an NHS-style social care system.

The Case for Reform

Former Work and Pensions Secretary Lord David Blunkett said scrapping the triple lock could save the government up to £22 billion ($29.12 billion) by 2030. Meanwhile, Darren Jones, the former Chief Secretary to the Prime Minister, said it was not practical to keep taxing people to fund social care.

'An interesting thought, maybe the triple lock is very expensive in the years ahead and there's a benefit to older people. If you're reallocating money to help older people in the social care system, maybe there's some reform that could be made there,' Jones told the BBC. 'You can't just keep taxing and spending more and you can't just keep borrowing more, so you're going to have to swap something out.'

Electoral Suicide

Unite union leader Sharon Graham believes scrapping the triple lock would be 'electoral suicide.' She told The Times at the Labour Conference: 'I think it would be almost electoral suicide. Morally, I just don't think it's the right thing.' Unite remains one of Labour's largest affiliated trade unions.

'I think that's an embarrassment, quite frankly, because we're one of the six richest economies in the world... It would send completely the wrong message. I cannot understand why we keep going back to pensioners,' she added.

Reform UK's Treasury spokesman Robert Jenrick doesn't see the need to scrap it. 'The triple lock has struck a balance. Pensioners are better off than they were. But the growth has been controlled,' he said.

'Today someone on the state pension is getting £241 ($319) a week. Out of that, they pay all their outgoings – food, electricity and gas bills, rent in some cases. Next year it will go up to £250 ($331). It's not lavish, is it?' he added.

Liberal Democrat peer Baroness Meral Hussein-Ece made a sarcastic remark on social media, saying that the state pension, expected to reach about £13,000 ($17,209.77) a year, 'is apparently a luxury.'