State Pension Triple Lock

Anthony Browne Excerpts

Tuesday 8th November 2022 Commons Chamber

[Jonathan Ashworth]

I do not know if the hon. Gentleman was in the House about three weeks ago, but that was when the then Conservative Prime Minister committed from the Dispatch Box to maintain the triple lock. If the hon. Gentleman wants to stand up for the 21,000 pensioners in the Wantage area who are set to lose £425 from a real-terms cut, he should vote with us in the Lobby this afternoon.

Let me make a bit of progress. A £900 cut in income, around £37 per month, is punishing at the best of times, and it is a cut for people who feel they have paid their dues—people who, like my mum, feel they have paid their stamps. It is a cut for those who have worked all their lives and who often live now with a disability or in ill health because of their hard work. Whether because of the hard, unyielding occupations that they may have worked in, they might live with chapped hands, sore backs and sore knees. They deserve a retirement of security, dignity and respect. It would be a betrayal of Britain’s almost 13 million pensioners to cut the pension a second year in a row, and this House should not stand for it.

Why has the triple lock been in the Chancellor’s crosshairs? It is because Conservative Members presented, cheered and welcomed the most disastrous Budget in living memory. It was a Budget so reckless and so cavalier with the public finances that it crashed the economy with unfunded tax cuts, sent borrowing costs soaring, gave us a run on pension funds, and forced mortgage rates to ricochet round the money markets, costing homeowners hundreds of pounds extra a month, and now they want us all to think it was just an aberration—that it was all just a bad dream; that Bobby Ewing was in the shower all along. But for the British people it remains a real nightmare, and now the Government are expecting pensioners to pay the price. Well, we will not stop reminding them of the Budget that they imposed on the British people.

In recent days, ahead of this debate, I have been inundated with messages from Britain’s retirees saying that that price is far too high. This was what Hilda wrote:

“We believed that with the triple lock in place, our state pension would keep pace with wages and inflation…This government cynically dismantled the triple lock and threw state pensioners under the bus”.

This was what Mary wrote to me:

“I am in tears of frustration and anger…Not all pensioners are well off. I for one am really struggling”.

This was from Patrick, who is aged 73:

“How can a responsible government minister welch on a promise?”

That is the crux of the matter, because every Government Member stood on a manifesto in 2019 that made a clear promise to the triple lock.

Six months ago, the Prime Minister, when he was the Chancellor, told us from that Dispatch Box that the promise of inflation-proofing the state pension would be honoured for the next financial year:

“I can reassure the House that next year…benefits will be uprated by this September’s consumer prices index”.

He went on:

“the triple lock will apply to the state pension.”—[Official Report, 26 May 2022; Vol. 715, c. 452.]

Those were the Prime Minister’s words six months ago. He tells us that we should not have a general election because that 2019 manifesto gives him a mandate, but he will not give us a straight answer to a very simple question: will he honour the promise he made from the Dispatch Box six months ago? So much for his promise to restore “integrity and professionalism” to Downing Street.

A year ago, the House debated breaking the triple lock. The then Pensions Minister, now promoted to Minister for Employment as Minister of State—I congratulate him of course, and I am pleased that he is back in the Department after a brief period away—last year justified cutting the state pension, telling us it was only for one year. Just a year ago, on 15 November 2021, he said:

“The triple lock will, I confirm, be applied in the usual way for the rest of the Parliament.”—[Official Report, 15 November 2021; Vol. 703, c. 372.]

So what has changed?

[Anthony Browne (South Cambridgeshire) (Con)]

I repeat that this is political theatre and, for those in doubt, whatever the vote is today, it will have absolutely no impact on the legislation whatever. I just want to know if the right hon. Member is aware of the very good House of Commons briefing on the triple lock, which compares the basic state pension with average earnings over the last 30 years. The low point of it was between 2000 and 2008, when it went down to 16%. That is the lowest the basic state pension has ever been compared with average earnings, and who was in power at that time? It was the last Labour Government. In fact, the previous Conservative Government and successive Conservative Governments have been more generous on the basic state pension compared with average earnings than the last Labour Government.

[Jonathan Ashworth]

If we want to go down memory lane, a previous Conservative Government broke the earnings link and that is why we need to keep the triple lock, so it builds up its value. The reason those inflation upratings were so low is that we had inflation under control under that Labour Government; we had not lost control of it. We introduced the minimum income guarantee, which the Conservative party voted against, and we introduced pension credit, which the Conservative party opposed at the time, in order to improve the incomes of the poorest pensioners. We brought pensioner poverty down and it is increasing again under this Tory Government.

As I have said, the then Pensions Minister said that the triple lock would

“be applied…for the rest of the Parliament”.

I was sceptical about that. We have these debates across the Dispatch Box and he will recall my scepticism. He is always very noisy on the Front Bench and, when I was asking questions, he was shouting at me and said, “No, we’ve committed to the triple lock. You shouldn’t have to worry.” I asked the then Work and Pensions Secretary, the right hon. Member for Suffolk Coastal (Dr Coffey), and she told me at the time:

“I am again happy to put on record that the triple lock will be honoured in the future.”—[Official Report, 21 March 2022; Vol. 711, c. 99.]

That was in March 2022 from that Dispatch Box, yet here we are with the prospect of another real-terms cut in the pension on the table again. Breaking such a promise two years in a row in a cost of living crisis is surely unacceptable.

That brings me to the new Work and Pensions Secretary, who of course prior to his elevation just a month ago, when real-terms cuts to the pension and other benefits were raised, led the charge at the Tory party conference. He undermined the position of the then Prime Minister and the then Chancellor, telling Sky News it was

“one of those areas where the Government is going to have to think again.”

But of course this morning, he did not repeat his line that the Government should think again, because now he is saying we have to wait until next week’s emergency Budget. So we have a U-turn on the U-turn. In fact, the Conservative Twitter account is still saying:

“We will protect the Triple Lock”.

The Conservative Twitter account is still repeating what the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), told us from the Dispatch Box three or four weeks ago. So it is a U-turn on a U-turn on a U-turn, and it makes us all dizzy just watching it.

After all this Conservative party triple lock hokey-cokey, today is a clear opportunity for Conservative Members to finally tell us where they stand. Today is an opportunity for Conservative Members to finally end the uncertainty, finally end the mixed messages and finally end the worry for millions of pensioners who have seen their state pension cut while their cost of living soars, and confirm that the pension will not be cut next year. The uprating of the state pension is crucial to millions of today’s pensioners, but it is also about protecting the incomes of tomorrow’s pensioners. It is about ensuring that the state pension recovers its value relative to wages. Given the move away from final salary schemes, it means certainty for tomorrow’s pensioners as well.

In the name of today’s pensioners and tomorrow’s pensioners, Conservative MPs should offer us certainty. Our retired constituents have worked hard all their lives, contributed to national insurance and served our communities. They deserve security and dignity. As the former Conservative Pensions Minister Baroness Altmann warned this week:

“Short-changing pensioners during a cost of living crisis should be unthinkable...Snatching protection away this year could be the biggest betrayal pensioners have ever known.”

I could not put it better myself. Ministers should stop dithering. They should reject the cut in the state pension and support our motion in the Lobby tonight.

--- Later in debate ---

[Paula Barker]

I entirely concur with what the hon. Lady has said. My inbox, like hers, is full of emails giving examples similar to that of her 70-year-old constituent, from people who are choosing between heating and eating.

Why is it so important for the triple lock to be protected? The answer is quite simple. Our elderly people are suffering under this cost of living crisis, and have been suffering under Tory austerity for much longer. Pensioner poverty has been on the increase since the first half of the last decade: this is not something new. It is now widely reported that the number of pensioners living in poverty has topped the 2 million mark, including an extra 200,000 more poor pensioners in 2021 alone, according to the Centre for Ageing Better. That is a figure that should bear the hallmark of deep shame for any Government, and not least for a Prime Minister who was in No. 11 while the problem was becoming worse. Pensioners are falling into debt for the first time in their lives, with all the anxiety that that brings in later life.

[Anthony Browne]

Is the hon. Member aware of a report on the triple lock that I mentioned earlier, produced by the House of Commons Library? It shows that as a proportion of average earnings, the basic state pension is now higher than it was at any time under the last Labour Government, and that is a result of Conservative policy.

[Paula Barker]

I refer the hon. Member to the response from my right hon. Friend the Member for Leicester South (Jonathan Ashworth) to that very point, which I think was more than eloquent.

It is good, decent, working-class pensioners who are suffering, along with many more who may be asset-rich yet cash-poor. People who have worked for many decades are being denied the basic dignity of living free from fear. In the north-west region alone, nearly half a million pensioners are living in some form of poverty, including too many in my own constituency. Inflation is due to start falling; the Government know that. We already know that it would not be right to scrap the triple lock, nor would it make for sound economics—especially at this moment—to hit pensioners in the pocket with a real-terms cut in their incomes. People need support now, rather than the drawbridge being pulled up. The shift of wealth from working and middle-class households upwards has never been as great, and those inequalities are borne out in the way we treat our older people.

When Ministers hold great offices of state and lecture the British people about tough choices while dishing out billions in failed public sector contracts to their friends, removing the cap on bankers’ bonuses and increasing the cost of mortgages to pay for unfunded tax cuts for the few, it is particularly galling that the Government cannot come out and unequivocally back our pensioners today. If they can prioritise all that in times like covid and during these economic headwinds, the very least they can do is walk through the Lobby with the Opposition today. The last thing that our pensioners need now is uncertainty, and I urge all right hon. and hon. Members to join us in the Lobby this afternoon.

--- Later in debate ---

[Anthony Browne (South Cambridgeshire) (Con)]

It is wonderful to see Labour, the Conservatives and the SNP, and the Liberal Democrats at one point, so united not just by a successful Conservative policy but by a Conservative manifesto commitment. It is delightful to speak in a debate in which the Opposition are calling for the Government to support their own manifesto commitment.

Another thing that unites the House is that we all support dignity in retirement and financial security in old age. The Government have an absolute duty to support pensioners and to reduce pensioner poverty. Pensioners, as various Members mentioned, are on fixed incomes. During a cost of living crisis, as we have at the moment, they cannot go out and get a second job, work extra hours or demand that their boss gives them a pay rise. They have to live on their state pension or their occupational pension, which is why I am so grateful for all the measures that the Government have introduced during this cost of living crisis, including the energy price guarantee, the £300 winter fuel payment, the £150 increase to the warm home discount and the £400 energy bill support scheme for all homeowners. Pensioners and those on means-tested benefits will also receive an extra £650 of cost of living support.

All those measures are very welcome, but this debate is about not the Government’s emergency tailored support but the state pension. At what level should it be? Should we keep the triple lock? These questions have been at the centre of a political tug-of-war for a decade. In recent times, as I mentioned in my interventions, the state pension has been at record lows as a proportion of average earnings. Under the last Labour Government, it went down to around 16% of average earnings between 2000 and 2008—that is the lowest rate of the modern era. Various colleagues mentioned Gordon Brown’s offer to increase pensions by 75p a week in 1999, which is a derisory amount.

The whole House has spoken in praise of the triple lock, which was introduced by the Conservatives and has been a manifesto commitment ever since. I point out to the Opposition Members who deride the Government’s track record that, actually, the state pension is now far more generous than it ever was during 13 years of Labour Government. Labour’s state pension increases were initially by inflation only, which led to the 75p increase, and then in 2002 Gordon Brown introduced an increase by either a 2.5% upper limit or inflation. Labour never brought back the earnings link, which first came back in 2011 when we introduced the triple lock.

The triple lock has worked well. Since 2012-13, pensions have gone up by 2.5% four times, by earnings three times and by the CPI rate three times, which shows that the triple lock does kick in. Since 2010, we have increased the state pension by £2,300, which is 31% more than if the state pension had increased by just earnings or inflation—that is £720 more. As a result, the basic state pension as a proportion of earnings is at its highest rate for more than 30 years—higher than at any time during the last Labour Government. The new state pension is now 25% of average earnings, a historically high level.

There is no doubt that the triple lock is expensive, which is why we are having this debate. We spend more than £100 billion a year on state pensions, which is £7.9 billion more than if the triple lock had never been introduced by this Government. We clearly have an economic black hole at the moment, and we need to work out where the money comes from. I am very supportive of the triple lock, and I was elected on that manifesto commitment. I know all my colleagues are very supportive of the triple lock, but I am also not a Minister, so I am free to speak out in support of the triple lock. I fully appreciate that the Government are going through a budgetary process for the autumn statement, so they cannot say, “Yes, we support this.” They have to look at everything in the round and make sure that we live within our means. As a result, I fully support the Government’s position of not stating their position on the record at the moment. We will hear the autumn statement next Thursday, and I look forward to the Government’s pronouncements.

--- Later in debate ---

[Anthony Browne]

The hon. Member said that it was terrifying that we may not have the triple lock. I agree that it is terrifying not implementing a Conservative policy. She said that she wanted to remind the Government of what has happened. Let me remind the Labour party, which has been criticising Government policy, that we have systematically, over the past 12 years, had a far more generous state policy scheme than we had under 13 years of the last Labour Government, when we only had inflation or 2.5%, and we never had the triple lock.

[Tonia Antoniazzi]

The hon. Member’s intervention misses the point by quite a margin, because pensioner poverty has been on the rise regardless.

The promise of this society is that we support everyone not just to survive, but to thrive. The Government seem to believe that pensions are some sort of nice extra, but that is not the case. The UK’s state pension, which is one of the least generous in the developed world, is seen as something for which pensioners should be grateful. No, they should not be grateful, because they have paid into it.

The audacity of the Government is clear. In the midst of a cost of living crisis, the like of which we have not seen for decades, they turn around to people who have paid their taxes and earned a decent retirement and tell them that, instead of the state supporting them in their retirement, they will plunge them into poverty. Breaking the 2019 Tory manifesto commitment to the triple lock for the second year in a row will leave more than 18,000 pensioners in Gower, on average, £905 worse off. Those are the statistics for my constituents.

When my constituents write to me asking how they will pay their bills this winter, how they will put food on the table, and why they are paying the price for Tory economic incompetence, what would the Minister tell them and what would she have me tell them?

--- Later in debate ---

[Jerome Mayhew]

I am grateful for the hon. Lady’s intervention; it brings to mind a number of the interventions and speeches from Labour Members talking about pensioners’ fears as they consider the outcome of the triple lock decision. Surely this debate, called by Labour, does not reduce fear but increases it, and that in itself is wholly irresponsible. It is scaremongering.

I am surprised that Labour wants to draw attention to pensions policy, because the Government’s activities over the last dozen years put Labour to shame. Let us look at pensions more widely, because pensioners get income from multiple sources. We have the state pension, but there are also private and company pensions, individual personal savings and other state benefits in addition to the pension.

I will focus first on auto-enrolment. Under Labour, members of the public increasingly just could not afford to save for their retirement—either that, or Gordon Brown’s famous tax raid on pension pots simply made it not worthwhile to save for a pension. If we look at the data, during the 2000s private sector pension membership declined. In the year 2000, 47% of people had private pensions, but by 2012 that had fallen to 32%—a decline of 47%. By changing from an opt-in to an opt-out system, auto-enrolment, brought in by the Conservative-led Government, transformed pension saving in this country. In my view, it was perhaps the single most important intervention of Government policy over the past decade.

The figures speak for themselves: now, 75% of employees are regularly saving and benefiting from tax-free employer contributions. I used to be an employer before coming to this place, and I employed hundreds of very young people—typically 18 to 25-year-olds. We had a company pension scheme and, as a responsible employer, I tried to persuade them to start pensions, but the take-up was very low. The impact of the change to auto-enrolment was amazing, and that has been backed up by our company contributions. It is a wholly beneficial thing and it has reversed the roles.

The other point worth making is that this is Conservative values in action. Not for us the state’s putting its arms around people and being wholly responsible for individuals’ futures; we want to see people’s being helped to take responsibility for their own futures, with the state there to help the most vulnerable, and that is exactly what the Government have done in this case.

It has also been mentioned multiple times that the state pension was not a Labour idea; it was instigated by the Conservative-led Government. The right hon. Member for Leicester South (Jonathan Ashworth) is no longer in his place, but I sometimes wonder what conversations in the Treasury were like in 1999, when he was part of Gordon Brown’s inner circle. Presumably, the debate was, “Do we raise the pension by 75p or 50p, or shall we push the boat out and increase it by £1?” It is rich for the Labour party to start lecturing the Conservative Government, whose policy the triple lock actually is, given its own lamentable record on pensions. Labour has nothing to teach us here.

[Anthony Browne]

My hon. Friend has made some interesting points, and I think this debate has been useful to remind the Chamber that the triple lock is our policy. Given the point he has just made, and continuing the Christmas theme, does he agree that Labour attacking our track record on the state pension is a bit like Scrooge attacking Father Christmas for not being generous enough?

[Jerome Mayhew]

I will let that intervention speak for itself, but I entirely agree with the sentiment behind it.

Since 2010, because of the Conservative triple lock, pensions have increased by £2,300 in cash terms and by £720 in real terms. There will come a point when the triple lock will need to be reviewed; because of its statistical ratchet effect, there will come a time when we should properly remove the triple lock to maintain balance between the various cohorts of society. To date, however, it has been a powerful tool to raise pension values above those Labour lows in the 2000s that we have heard about.

In addition to the triple lock, Labour also ignored the problem of people’s—overwhelmingly women—child-rearing years not counting towards the state pension. I am delighted that, again, it was the Conservative Government who stood up for women and for the family and the importance of child-rearing, so that now raising a family counts towards the new state pension. More than 3 million will now be £550 better off as a result.

I have a minute and a half left, but I will not use it all, because others have set out the long list of additional benefits devised by the Government to assist with the cost of living crisis caused by the Russian invasion of Ukraine. We Conservatives recognise that pensioners are particularly vulnerable because they are on a fixed income, but there has been an additional £300 for winter fuel payments, the £400 discount on energy bills, £150 for affected council tax payments, and £650 additional means-tested support, as well as the additional payment for those with disabilities—and the list goes on.

On the triple lock, we will have to wait and see for nine more days, but even without it pensioners have been looked after by this Government. As the Prime Minister has repeatedly said, and as his record shows, all decisions taken by this Government will be compassionate and will look after the most vulnerable in society.