The Social Market Foundation has called for the chancellor to consider moving from a triple lock to a double lock on the state pension, removing the 2.5% floor currently in place.
The Social Market Foundation has called for the chancellor to consider moving from a triple lock to a double lock on the state pension, removing the 2.5% floor currently in place.
The foundation said such a move could allow the government to relax some of its recently announced cuts to state welfare, which have been criticised by campaign groups.
“Ending the triple lock, cutting wasteful, low-return projects, and targeted, popular set of taxes are critical ways to unlock over £30bn in savings while maintaining support for those most in need.”
Gideon Salutin, Social Market Foundation
The triple lock to the state pension was introduced by the coalition government in 2012 and has been a staple in many parties’ manifestos at multiple elections since then.
It promises that the state pension will rise every year in line with the higher of average earnings, inflation or 2.5%.
However, the Social Market Foundation said the triple lock policy made up 40% of total welfare spending and was likely to cost another £20bn over the next five years.
Removing the lower limit and moving to a double lock policy would save the government £2.6bn, the think tank said. Further savings could be realised by just linking state pension payments to one of earnings or inflation.
Last year, the Institute for Fiscal Studies (IFS) called for the government to review the triple lock as it had resulted in unpredictable and sometimes overly generous increases to the state pension.
The IFS projected that the triple lock “could easily cost anywhere between an additional £5bn and £40bn per year in 2050 in today’s terms”.
The chancellor is due to deliver her Spring Statement next week amid reports of further cuts to government spending on top of a £5bn reduction in welfare payments, predominantly affecting disabled people.
In its analysis, the Social Market Foundation claimed there were several areas that the government could cut without causing harm or controversy. It cited “wasteful, low-return projects” such as the Lower Thames Crossing and expansions to the A66 and A46 that could generate £3.8bn in savings if cancelled.
The think tank also called for Reeves to consider “popular taxes” such as levies on “vacant properties, house-flipping and non-resident purchasing”, and taxing online gambling. These could raise £24bn, according to the Social Market Foundation’s calculations.
Gideon Salutin, senior researcher at the Social Market Foundation, said the government “should be willing to explore the full range of spending cuts at their disposal”.
“Ending the triple lock, cutting wasteful, low-return projects, and targeted, popular set of taxes are critical ways to unlock over £30bn in savings while maintaining support for those most in need,” he added.
“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.”
