Work and Pensions Select Committee chair Frank Field has urged to government to consider replacing the triple lock policy with ‘double-lock plus’ from 2020 onwards.

At a debate during parliament, yesterday, 28 February, on intergenerational fairness Field listed four ways that the triple lock can continue. These were to either borrow the money to fund it, raise taxes by 50 per cent, keep reducing the living standards of working age people relative to pensioners or to raise the retirement age gradually into he seventies.

He noted that neither of those options are viable or cannot be justified and therefore he made a plea to the government to “look carefully” at the Committee’s proposal of the double-lock plus.

“Pension credit and the coalition government’s triple lock have already—this will continue—raised the value of the state retirement pension compared with average earnings to a historical high. The Select Committee report says that by 2020, we should peg the state pension against earnings at the level at that time.

“The double lock-plus would ensure that the state pension would never from that day forward fall relative to average earnings. As there will be—perhaps in the very short term—periods during which price inflation exceeds earnings, we should honour the prices link at those times, albeit coming back to the earnings link as soon as possible. In that way, we would not actually have to face many of the terrible scenarios I have painted,” he stated.

Pensions Minister Richard Harrington chose not to explicitly state whether he is for or against scrapping the triple lock. However, during the debate he noted that “we have to be careful about creating a burden for future generations by spending money today”. He said that governments have to look at the whole picture.

“State pensioners and private pensioners are part of that picture, but achieving real intergenerational fairness for everybody—that is what we all want and it is why most of us stood for election—involves ensuring that people have long working lives, get prosperity from working, enjoy their work, and save for their future. It is for the government to guide them, from the day they start work until the day they retire, on saving for their prosperity in the future.”

However, Labour Shadow Work and Pensions Secretary Debbie Abrahams backed up Labour’s earlier promise to keep the triple lock beyond 2020 if they are elected. She said she agreed with the report on intergenerational fairness but suggested that we need to look more at the inequality within generations and not lose sight by simply looking at intergenerational fairness.

“I absolutely agree with the premise of the Select Committee’s report—we do need to address the inter- generational inequality that is being experienced throughout the country—but I differ with it on the solutions. The report suggests that the state pension triple lock should be targeted for expenditure savings. According to the OECD, the basic state pension was one of the world’s lowest after the Thatcher government broke the link between earnings and uprating in 1980. That led to a long decline in the value of pensions, which the last Labour Government strove to restore.

“Although there have been positive efforts to ensure that the new single-tier state pension is fairer and of wider benefit to members of the current generation, there are problems with it. Over the course of their retirement, those in their 40s will be £13,000 worse off than otherwise, those in their 30s will be £17,000 worse off, and those in their 20s will be £20,000 worse off.

“A continued above-inflation rise will not only benefit those who are retiring now, but will be enjoyed by generations who are to retire. That is one of the central reasons for Labour’s commitment to maintaining the triple lock beyond 2020. I know that we differ from the Government in that regard, but underpinning our decision is the issue of inequalities within generations. We must not trade off the inequality of one generation against the poverty of another.”

Also in opposition to scrapping the triple lock, SNP whip Marion Fellows said that we have to look at pensioners now and pensioners in he future. She quoted figures from the Pensions Policy Institute, which calculated that a younger person with lower earnings has a 63 per cent chance of achieving an adequate retirement income if the new state pension is increased by the triple lock, but that could fall to 36 per cent if it is linked to earnings.

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