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Tue, 2 June 2020

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Cabinet minister David Gauke: Triple lock on state pension could be gone in 10 years

Cabinet minister David Gauke: Triple lock on state pension could be gone in 10 years
2 min read

The Conservatives could go into the next general election with a fresh pledge to scrap the triple lock guaranteeing a decent rise in the state pension every year, new Work and Pensions Secretary David Gauke has revealed.


He said it was unfair that increasing amounts of state spending would continue to go towards older people at the expense of younger voters.

And he suggested the policy - which guarantees the pension goes up by at least 2.5% a year - could be gone within a decade.

The Conservatives went into the election pledging to scrap the triple lock after 2020, but it was dumped from yesterday's Queen's Speech after Theresa May lost her majority at the election.

At a Westminster lunch this afternoon, Mr Gauke was asked how long the current arrangement could stay in place.

He said: "If you look at what the triple lock does, it has a ratchet effect because pensions go up by either inflation or earnings - over a period of time it will mean that a greater and greater share of GDP goes towards paying the state pension, even without any increases in pensioner numbers.

"Another way of putting it is a smaller and smaller percentage of GDP goes to non-pensioners. Do I think in 10, 20, 30 years time we will still have a triple lock, I cannot see in all honesty how we can."

The minister - who served in the Treasury for seven years before moving to the Department for Work and Pensions - also suggested that the long-running freeze on state benefits will also have to continue as the Government tries to bring down public spending.

He said: "It's worth noting that what looks likely to happen with inflation is that we are seeing the consequences of the fall in the pound feeding through. The Bank of England anticipates that it will peak towards the end of this year and start falling. We don't appear to be in a period where we are entering into a sustained period of inflation, so at the moment the evidence doesn't suggest that we're going to go through a three-year period of high inflation.

"With that in mind, and given where we are with the public finances, I would expect the benefit freeze to continue."

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