Peers demand rethink on suspending pensions triple lock in face of ‘cost-of-living storm’
Peers have inflicted a decisive defeat on the Government in demanding it retain the triple lock on state pensions in the face of a “cost-of-living storm”.
The House of Lords backed by 220 votes to 178, majority 42, a cross-party move to keep the link between earnings and retirement payouts.
However, it would allow for adjustments to be made to take account of the impact of the Covid-19 pandemic.
The successful amendment to the Social Security (Uprating of Benefits) Bill means the legislation will now return to the Commons for consideration.
It follows anger at the decision to break a Tory manifesto commitment and suspend the triple lock, which underpins state pension increases, for a year to save £5 billion.
The mechanism guarantees state pension rises in line with inflation, earnings or 2.5% – whichever is higher.
But, in September, the UK Government confirmed the link between state pension increases and wage growth would be dropped for a year.
It could have meant pensioners received a rise of about 8% – while many workers have been dealing with job losses, salary cuts and pay freezes.
The impact of the coronavirus pandemic has distorted wage growth figures, producing a spike as a result of people having previously been furloughed and many low-paid jobs having disappeared.
Critics argued the proposed 3.1% pension increase next year, using the Consumer Prices Index (CPI) measure of inflation, amounted to a real terms cut when set against rising living costs, and the Government needed to think again.
Leading the opposition to the suspension of the triple lock was Tory former pensions minister Baroness Altmann, who said: “Yes, this is for one year only, but what a year to choose to do this, while older people are facing a cost of living crisis and the protection they rely on is being removed.”
Pointing out 12 million citizens depended on the pensions commitment, Lady Altmann told peers: “We have a chance to ask the other place to reconsider.”
She was supported by Labour peer Baroness Ritchie of Downpatrick, who said: “I do believe that pensioner poverty is deepening.”
Conservative peer Baroness Wheatcroft said: “This is not the time when we should make our pensioners poorer.”
Labour frontbencher Baroness Sherlock said: “The Government came to power on the back of a manifesto commitment to the triple lock.
“The proposals the Government has come up with in the Bill means stepping away from the fundamental principle that pensions should keep up with earnings.”
Responding, Work and Pensions minister Baroness Stedman-Scott pointed out the change to state pensions was for one year only.
She said: “From 2023-24 the legislation will revert to the original requirement to uprate at least by earnings growth and the Government’s triple lock manifesto commitment remains in place.”
Forcing a vote on the issue, Lady Altmann warned against “setting a seriously dangerous precedent”.
She said: “Pensioners are not a cash machine for chancellors to take money from when wanting to fund other projects or tax cuts elsewhere, especially not in the eye of a cost-of-living storm.”
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