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Rishi Sunak has hinted he could bend or break his manifesto pledge to raise state pensions using a "triple lock" – after official estimates warned it would hike payments by 8% next year.
A statistical quirk means pensioners are in line for an inflation-busting increase in April 2022 – months after Universal Credit is slashed for 6million other people.
But today the Chancellor said he'll be storming ahead with the £20-a-week Universal Credit cut – and hinted he could block any 8% rise in pensions too.
Quizzed by BBC Breakfast, he said the triple lock "is the government's policy" – in the present tense – but added: "I very much recognise people’s concerns."
Figures on the pension rise will only come later this year, but if they do recommend an 8% hike, Mr Sunak repeatedly refused to rule out changing the rules to prevent it.
Chancellor Rishi Sunak repeatedly refused to rule out bending the rules to stop an 8% hike
(Image: Getty Images)
“I do recognise people’s concerns on this, I think they are completely legitimate and fair concerns to raise and what I would say is when we look at this properly at the appropriate time," he said.
"Fairness will be absolutely driving what we do.
"And we want to make sure the decisions we make and the systems we have are fair, both for pensioners and for taxpayers."
Asked if he was looking for wriggle room and may break the triple lock, he replied: "I don’t know the numbers yet because they haven’t been published, we haven’t got to that point yet. At this point it is speculation."
DWP to write to millions confirming £20 benefit cut – while pensions set to rise 8%
What is the pensions triple lock? Tory pledge and the threat to it explained
The 'triple lock' has run since April 2011, was promised in multiple Tory manifestos, and guarantees bumper pension rises each year. Under the policy, state pensions rise every April by whichever is highest out of:
- Inflation. This is usually Consumer Prices Index (CPI) inflation in the year to the previous September.
- Earnings. Usually the rise in average weekly earnings in the year to the May-July period the previous year.
- 2.5%. If this set figure is higher than either of inflation or earnings.
But the specific way the triple lock is calculated has clashed with Covid's effect on the economy, and could lead to an unintended 8% rise.
In May-July 2020, average weekly earnings fell by 1% compared to the same period in 2019 – partly because so many people were on furlough.
This means average weekly earnings are now "artificially" bouncing back this year as people come off furlough.
This week the Office for Budget Responsibility watchdog warned they are currently up 5.6%, are set to rise even further, and could reach 8% by May-July.
The 2019 Conservative manifesto said bluntly: "We will keep the triple lock." And the Prime Minister's spokesman said last month: "The government made a commitment at the last election, and plans to stick to that commitment."
But there are technical ways in which the 8% could be stopped, with the Tories still claiming they haven't entirely broken their pledge.
For example, it is in ministers' power to change the exact way in which "earnings growth" is calculated.
Another option is suspending the triple lock for a year – like the government has with its pledge to spend 0.7% of national income on foreign aid.
This breaking news story is being updated.