Kemi has a point about the triple lock on pensions
Conscious that her party are heading for a drubbing at Thursday's local elections, Kemi Badenoch has been giving a series of radio and television interviews. Since the Tory leader's approval ratings suggest that the more voters see of her, the more they dislike her, this might not be as canny as CCHQ thinks.
Nonetheless, this unusual surfacing from the habitually interview-averse Badenoch has forced her to do something she usually avoids: comment on policy. Last night, on Iain Dale's LBC show, she was asked if the Tories remain committed to the triple lock: the system that ensures the state pension rises each year be either the inflation rate, average earnings, or 2.5 per cent – whichever is highest.
Her response raised eyebrows. It has 'always been the Conservative policy to have the triple lock', she explained. She has 'not changed that', since when she changes policy she has ' a big speech'. No such oratorical delight is currently due. But the Tories are looking 'across the board at so many things' – taxes, pensions, their own navels – and once that is done she will 'say what the policy is going to be'.
Studiously ambiguous, I would argue, with room for a future reckoning. Back in January, Badenoch suggested that she was looking at means-testing the triple lock and then backtracked when Labour suggested she was betraying pensioners (an area in which the Chancellor has proved herself an expert).
Coming in local election week, Badenoch's political opponents have every incentive to suggest the Tory leader is shafting the grey vote. Over 65s were the only age group with which the Conservatives led at last year's election, and pensioners are far more likely to turn out. If they stay at home, furious about Badenoch's comments, an already bad night could be transformed into an epochal shellacking.
Yet if the Conservatives' ongoing policy renewal results in a pledge to scrap the triple lock, it would be the bravest and most consequential choice of Badenoch's leadership so far. There will never be a right time to bite the bullet on the triple lock (even if the week of the local election might be the worst). But few politicians have reckoned with the reality that its ongoing funding will bankrupt Britain.
The annual cost of the state pension was £124.3 billion in 2023 to 2024 – almost two and a half times what we spent in the same year on defence, despite Russia's invasion of Ukraine. Without the triple lock, pensions would only have been upgraded with inflation and would cost £10 billion less.
Compared to pensions only rising in line with average earnings, the Institute for Fiscal Studies projects the triple lock could cause the state pension to cost an additional £5 to £45 billion by 2050. Unless Angela Rayner's one-woman quest to carpet the countryside in new builds really does unleash a hitherto-unachievable growth bonanza, this pledge is unaffordable, and must be dropped.
Britain is becoming older, fatter, and sicker. The welfare state's costs are rising inexorably. When the state pension was introduced in 1908, those 65 or older made up only five per cent of the population. By the 2040s, it will be five times that. Without radical action, those in control of the levers of the economy will mandate ever-higher taxes, ever-higher spending, and ever-higher immigration to make up for our shortage in productive young people. Badenoch might have a point – but for now, she'd do well to keep it to herself.
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