The government’s plan to suspend the triple lock could be blocked in the Lords tomorrow amid concerns that pensioners will struggle against rising living costs.
Baroness Ros Altmann, former pensions minister, has called on peers to support amendments to legislation that would see the triple lock kept in its current form but with adjustments for the pandemic.
The move would see the legislation sent back to the Commons for MPs to take another look at whether the wages element of the triple lock needs to be suspended next year.
Altmann pointed out the 1992 Act states when reviewing how to uprate the state pension 'the Secretary of State shall estimate the general level of earnings in such manner as he thinks fit’, giving the government the power to adjust the earnings figure of 8 per cent to a lower number.
Altmann said: “The bill to abandon the triple lock will be debated on Tuesday (November 2) in the Lords and I am determined to try to ask Peers to support amendments that would keep the triple lock, ensure that the Secretary of State can adjust for any upward distortions on earnings from the pandemic and protects pensioners, particularly the poorest, as they were promised in 2019.
“I believe millions of pensioners deserve better treatment. It’s time for Parliament to stand up and protect good citizens. What are we there for if not to try to stop dangerous policies that are based on false information.”
In September, the government suspended the wages element of the pensions triple lock for one year to avoid a disproportionate rise of the state pension following the pandemic.
Under triple lock rules the state pension is increased by the highest of earnings growth, price inflation or 2.5 per cent a year.
But Altmann pointed out the Office for Budget Responsibility (OBR) has now estimated that average earnings growth will come in at 5 per cent this year, lower than the 8 per cent the government has previously warned about.
She also said the MPs' decision to scrap the earnings link was based on a “false premise”.
She said MPs were asked to approve the measure after being told the only alternative to taking away the triple lock would be to uprate state pensions by more than 8 per cent, reflecting the ONS’s earnings figure for July.
Altmann said: “They were told this would cost an extra £5bn. It was on this basis that Parliament decided to abandon the manifesto commitment to protect pensioners, and the legislation passed through all the stages in the Commons in two and a half hours, with very few MPs present. However, these statements misrepresent reality.”
Altmann also highlighted abandoning the triple lock for pensioners was the biggest spending reduction in the Budget.
The Budget red book showed that by not sticking to the triple lock and instead using 3.1 per cent CPI to increase the state pension by next year, the Treasury expects to save £5.4bn in 2022-23, rising to £6.1bn in 2023-34.