, Chair of the
Treasury Committee, comments on the pensions triple lock:
“The pensions triple lock will produce unintended
consequences in its current form. This is largely due to the
fact that in 2021 there will be a very significant increase in
average wages relative to the level this year, which will have
been depressed by millions of workers on furlough.
“Inflation is also significantly lower than anticipated prior
to the crisis, which will take some pressure off living
costs.
“The Chancellor will need to address the lock by carefully
balancing the importance of protecting the income of older
people, who often have limited opportunities for increasing their
earnings, against the impact on the public finances.
“A way forward might be to temporarily suspend the wages
element of the lock. This might not entirely conform to the
Conservative Party manifesto, but I think most people would
recognise that a potential double-digit percentage increase is
unrealistic.”
--Ends--
Notes to Editors
-
The pensions triple lock was discussed in the Treasury
Committee’s evidence session on Tuesday 9 June. The full
transcript is here.
During the session, Torsten Bell, Chief Executive of the
Resolution Foundation, said:
Torsten Bell: If you
look at what the OBR is predicting for average earnings over the
next two years, because we have a load of people furloughed who
are earning 80% rather than the 100% that they were previously
earning, it is predicting average weekly earnings falls of 7.3%
this year being measured, but we will then be measuring an 18%
increase in average earnings next year.
I do not think we are going to increase the state
pension by 18% next year, so the triple lock is going in its
current form, at least temporarily. Unless some of you are
planning to support very generous increases in state pensions
next year, I suspect we are not going to increase them by nearly
a fifth over the course of next year.
