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Andy Burnham has been told to scrap the state pension triple lock to fund a costly social care system that he wants to create – but he has been warned by unions that it could be “almost electoral suicide”.
The warning comes amid reports that Mr Burnham may say in his Labour conference speech in Liverpool that the guarantee on a minimum increase in the state pension will need to go to help pay for his social care plans.
The prime minister has already suggested “nothing was off the table” when it came to finding a route to providing the expected £18bn annual cost for that new national care service, but also that it would have to wait until the next election so that he did not break Labour’s manifesto pledge.
However, a growing suggestion is that the state pension would be one route to fund it, given its own ballooning cost which is predicted to hit more than £15bn per year by 2030.
Mr Burnham will address the Labour Party conference on Tuesday over his plans for his social care service, after his warnings “difficult decisions” would need to be made in order to free up funding for the scheme.
But Union leaders and key Labour backers appear to be divided on the issue of the triple lock. Sharon Graham, the general secretary of the Unite union, told The Times: “I think it would be almost electoral suicide. Morally, I just don’t think it’s the right thing.
“We’re the lowest in the G7 in terms of how much we spend on pensions. I think that’s an embarrassment, quite frankly, because we’re one of the six richest economies in the world. I think it would be an absolute disaster, it would send completely the wrong message. I cannot understand why we keep going back to pensioners.”
Paul Johnson, a former head of the Institute for Fiscal Studies, said the only way a social care service could realistically be funded is through major tax rises.
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“If you are lucky it might save you a couple of billion by the end of the next parliament with the triple lock,” he said. “It will be ten years until you have got a noticeable amount of savings, much longer to fund something like social care.”
Darren Jones, the former chief secretary to the prime minister, said the triple lock option was “interesting” and potentially a route for sending support to pensioners in an alternative way.
“An interesting thought, maybe the triple lock is very expensive in the years ahead and there’s a benefit to older people. If you’re reallocating money to help older people in the social care system, maybe there’s some reform that could be made there,” he said to the BBC.
“You can’t just keep taxing and spending more and you can’t just keep borrowing more, so you’re going to have to swap something out if you’re going to start putting money in this way.”
Lord Blunkett, a former work and pensions secretary, told The Telegraph that Mr Burnham should look to axe the triple lock more quickly, potentially raising up to £22bn by 2030.
The triple lock means the state pension rises each year by the highest option out of 2.5 per cent, inflation or wage growth. This year, the latter is highest at 3.9 per cent, equating to a full state pension rise of nearly £500 which will come into effect from April 2027, making the state pension income potentially taxable for the first time for some people.
Removing the triple lock could lower the amount that future years rise by, thereby lowering in turn the total outlay needed by the government.
How much that would see pensioners miss out on would depend on the remaining criteria by which the state pension rises, but it is expected that billions would be saved annually if changed were introduced.
Speaking on BBC on Sunday, Mr Burnham added: “As health secretary I remember saying ‘we shouldn’t let what happened to my grandparents’ generation happen to my parents’ generation’, and it’s devastating actually to be here, and it has happened.”
Wes Streeting, however, pointed to the prime minister’s previous comments to suggest such a switch was improbable, albeit his comment was regarding funding defence rather than care.
“Your point on the triple lock – the manifesto was clear on this. We’re committed to the triple lock, and Andy Burnham has been clear that. we are standing by our manifesto. So I hope that’s clear,” he said.