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Replacing the state pension triple lock with a double lock will give state pensioners a meaningful increase as well as £2.6 billion in savings which can be used to help the most vulnerable in society, experts have said. The Social Market Foundation said Chancellor Rachel Reeves could swap to a double lock which would see the state pension rise based on the higher number between inflation and earnings.
At the moment, the triple lock is used to calculate the state pension’s annual rise and is the highest of either the rate of inflation, average earnings, or 2.5%.
Ahead of Chancellor Rachel Reeves Spring Statement, the Social Market Foundation – a cross-party think tank – has also called on the Government to consider spending cuts beyond the Department for Work and Pensions (DWP).
It said ‘low return’ infrastructure projects such as Lower Thames Crossing, the A66 Northern Trans-Pennine, and A46 Newark bypass project should be scrapped and would be easy savings wins for the Chancellor.
By the Department for Transport’s own calculations, all these projects provide low value for money and cancelling these projects would provide at least £3.8 billion in savings, the SMF said.
The SMF also said that savings from its proposals could provide room for the government to relax some of the recent tightened eligibility for disability and sickness benefits.
Left unchanged, the triple lock is set to make up 40% of total benefit spending, and spending on it will increase by another £20 billion over the next five years.
The SMF also urges the Chancellor to rethink her stance of not raising taxes, as there are several popular taxes that can be raised, which don’t break the new government’s manifesto pledges.
A combination of ‘housing fairness taxes’ such as taxes on vacant properties, house-flipping and non-resident purchasing and on online gambling, would be supported by the public and raise nearly £24 billion.
Gideon Salutin, senior researcher at Social Market Foundation, said: “Ending the triple lock, cutting wasteful, low-return projects, and targeted, popular set of taxes are critical ways to unlock over £30 billion in savings while maintaining support for those most in need.
“There is a savings pathway that meets fiscal rules, spurs growth, and safeguards essential support for millions – but we need politicians to be willing to take difficult decisions.”
