Labour ditching the state pension triple lock just became more likely

The chance of Labour dropping the state pension triple lock from its next manifesto has increased because trade unions and influential Labour figures are softening their opposition to scrapping it, The i Paper can reveal . A senior union source said the mechanism is “completely unsustainable” in the long term and that abolishing it could be used to help fund Andy Burnham’s vision for free social care. The Prime Minister has pledged to put free at the point of use care in the party’s next general election manifesto, along with a plan to fund the policy, which could cost up to £18.5bn a year. Shorts Labour insiders believe that getting rid of the lock – under which pensions rise each year in line with the highest of earnings, inflation or 2.5 per cent – could be a quid pro quo for Burnham’s care blueprint. The level of savings from getting rid of the lock would depend on what it is replaced with. However, it would not cover the full cost of free social care and would likely have to be paired with a tax increase. In the past, Labour’s trade union allies have been stalwart defenders of the lock but there are signs that outright union opposition to scrapping it is now melting away. One senior union source told The i Paper: “In the long term it’s completely unsustainable”. The source acknowledged the “risk” of going into an election with a promise to scrap the lock, but said such a move could prove successful if the savings were explicitly earmarked to pay for social care. Not all union leaders are convinced. Sharon Graham, the general secretary of Unite, told The i Paper that it “would be an absolute disaster zone” akin to Sir Keir Starmer’s decision to cut winter fuel payments. “We need to look at other ways to pay for some of these things that isn’t constantly going back to workers, the working class, everyday people, and of course in this instance, pensioners,” she said. Some Labour grandees, such as former home secretary Lord Blunkett and ex-deputy Labour leader Baroness Harriet Harman, have already called for the lock to be abolished. On Monday, former Labour leader Lord Neil Kinnock – whom Burnham has identified as a mentor – suggested that the lock could be changed. Asked whether Burnham should drop it to help pay for free social care, Kinnock told The i Paper: “I am not sure of the options but I am certain that if there is a change it will have to provide for alternatives that give support to people who are still on relatively low retirement incomes. And I think it will.” Dale Vince, the green tycoon who is a major Labour donor, told The i Paper that the lock had “done its job” and should be dispensed with. He argued that the lock had pulled pensioners out of poverty “but now it’s an imbalance in our society”. “There are other groups of people that are struggling much more relative to pensioners, and the triple lock is now over the top,” Vince said. Vince, who has donated millions to the Labour party, suggested an inflation-linked mechanism could replace the triple lock. At a fringe event in Liverpool, the pensions minister Torsten Bell told The i Paper that Labour would abide by its manifesto commitment to maintain the lock for the whole of this parliament. “We made a manifesto commitment, we’re going to stick to it,” he said. Bell did however engage in discussion about how the mechanism could be reformed. He cautioned against replacing the lock with a single earnings link. “Some of the proposals I see of people saying ‘just scrap the triple lock’ don’t learn enough from the last 15 years, which is you have these phases where inflation goes through the roof,” he said. “I don’t basically support proposals which just say ‘scrap the triple lock’ and go to an earnings uprating.” It would be possible to reform the lock in a way which adjusted for periods of high inflation. The Resolution Foundation – a think-tank which Bell used to run – has proposed moving to an Australian-style system where pensions track earnings growth but are protected from temporary price shocks. While Burnham has said he wants to work with other parties on building a cross-party consensus on social care, any attempt to include reforming the triple lock in this process may be destined to fall flat. A Liberal Democrat source said that party leader Sir Ed Davey “is never going to touch it” because it would jeopardise Lib Dem support in former Conservative seats in the south of England. “Think about the Blue Wall, think about all those pensioners, there’s just no way,” they said. However, the source said that the triple lock is a “batsh*t” policy.