Kill the state pension triple lock, Burnham told

Andy Burnham is being urged by Labour MPs to abandon a manifesto commitment on the state pension triple lock to free up cash for defence and young people.

The Mayor of Greater Manchester is seeking to return to Westminster in next week’s Makerfield by-election, and if he wins is expected to challenge Sir Keir Starmer for the leadership.

Some Labour MPs have urged Burnham to make “bold” choices if he becomes prime minister and set out a plan from the outset to move away from the Government’s commitment to the triple lock until the end of this Parliament.

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They argued that he would start with “goodwill behind him”, and should axe the mechanism to release funds to bolster the defence budget and invest in policies aimed at supporting younger generations.

The triple lock, which costs three times more than intended according to the Office for Budget Responsibility (OBR), ensures the state pension rises each year in line with whichever is highest – inflation, wage increases or a minimum increase of 2.5 per cent.

High levels of inflation have seen costs balloon to around £146bn a year, which is equivalent to 5 per cent of GDP and more than double the amount spent on defence.

It comes after Defence Secretary John Healey’s shock resignation on Wednesday evening, followed by Armed Forces minister Al Carns hours later, with both accusing the PM of failing to provide enough funds to protect the country in the long-awaited Defence Investment Plan (DIP).

The Treasury is said to have offered £13.5bn of the £18bn needed to make Britain war-ready, which amounts to £10bn in cash terms – or just a 0.08 per cent increase in GDP.

Momentum has been growing among Labour MPs for the triple lock to be scrapped to free up money for defence, and policies to support young people.

“It’s definitely something he [Burnham] should look at,” one Labour MP told The i Paper. “We have got to rip the DIP up and start again.”

General Sir Richard Barrons – co-author of the 2025 Strategic Defence Review – told BBC Newsnight on Wednesday he would “release the triple lock in order to put more money back into things like defence.”

“There’s no point me having a glamorous, comfortable retirement if the country that I bequeath to my children is at great military risk,” he added.

‘Leadership contest an opportunity to reopen triple lock debate’

The uprating mechanism was created in 2010 because the state pension had become too low relative to wages and living standards, but higher-than-expected inflation and wage growth over the last few years has seen sharp increases and ballooning costs.

While there have long been murmurings from within Labour, and other parties, that the triple lock is unaffordable and unsustainable, many politicians believe scrapping it would be too politically toxic among older voters. All the major political parties, bar the Greens, are currently committed to it. Many pensioners claim that the state pension is their only source of income.

But Labour MPs say a potential leadership contest is a good opportunity to reopen the debate.

One told The i Paper a contest would provide “an opportunity to reopen the whole debate on pensions and welfare support and its purpose”, adding: “We must do more to support pensioners in poverty and support people into work, but the current system does neither.”

Andy Burnham has met with retirees in Ashton-in-Makerfield ahead of the by-election (Photo: Christopher Furlong/Getty Images)

The Resolution Foundation think tank, which issued a renewed call for the triple lock to be scrapped earlier this week, has cited analysis which shows that pensioner poverty fell in the 14 years up until the policy was introduced, before rising again after it came into force.

Bunrham allies are urging him to axe the triple lock to spend the money on “bold” changes to help the young, it is understood.

Although there is unease about welfare changes within the Labour Party after last year’s revolt forced the Government to water down benefits cuts, there is growing acknowledgement that the system needs reform.

The architect of last summer’s rebellion, Dame Meg Hillier, told The i Paper that Labour MPs are now ready to back welfare reform as Alan Milburn’s review of youth joblessness has been a “game-changer”.

Burnham has backed Milburn’s initial report on young people not in education, employment, or training (NEET) – which stated that the Government spends 25 times as much on benefits for young people than it does on supporting them into work – calling it a “national scandal”.

‘If I were Burnham, I would axe the triple lock’

“We are going to have to think big if we’re going to solve this problem,” one Burnham supporting MP said. “If I were Burnham, I would axe the triple lock – and I’ve told him as much.”

The so-called “King of the North” recently admitted there is “no debate” that welfare spending should come down. He opposed the Government’s measures to get costs under control last summer.

John McTernan, who advised former prime minister Tony Blair in office, told The i Paper Burnham could create “huge headroom” by reforming the state pension system.

“The minute you say that you want to look again at the triple lock and make it lock in the value that has grown in pensions for 20 years, but remove the ratchet, you suddenly get huge headroom,” he said.

McTernan said this is because the “largest, fastest growing part” of welfare spending is on pensions, dwarfing that of universal credit and disability benefits.

Cabinet minister warns Burnham would be ‘bound by the manifesto’

A Cabinet minister warned that Burnham’s options are limited by Starmer’s 2024 commitment to keep the triple lock for the entirety of the Parliament, as he would be “bound by the manifesto”.

But several Labour MPs believe he should breach the manifesto promise or set a timeline for moving away from it with a longer-term vision for the party’s future.

One said Burnham could “defintely do it if he wants to” adding: “Even if it is in the manifesto, we don’t have a written constitution, therefore the British government can do whatever.”

Another said if he became PM he would have “some goodwill behind him when he starts”, meaning he could indicate that he is looking to the “medium term” by scrapping the ratchet effect in the triple lock’s uprating mechanism, “even if he states it as a future aim for the next manifesto”.

One MP shrugged off suggestions that ditching the policy would be too political toxic, saying: “I’m pretty sure pensioners don’t vote for us anyway, anymore.”

Burnham’s stance on welfare has come under the spotlight since it was reported that he would compensate the Waspi women – a cohort of women born in the 1050s who believe they were misled on changes to the state pension age.

He is reported to have told a Makerfield hustings that he has “long supported” the Women Against State Pension Inequality (Waspi) and would “stick by” them as “they deserve some recompense for the unfairness”.

But his spokeswoman later clarified that he “accepts the final decision has been made in relation to financial compensation but has indicated an openness to considering similar schemes on the Greater Manchester model”. This could include benefits such as early access to concessionary travel.

How could the triple lock be reformed?

Several options have been touted for reforming the triple lock to make it more predictable and financially sustainable for the Treasury, while also continuing to support pensioners.

Here are all the main proposals for reforming state pensions.

‘Smoothed’ earnings link

The Institute for Fiscal Studies (IFS) and the Resolution Foundation have long favoured the Australian-style “smoothed earnings link”, which tracks wage growth but protects the value of the state pension from temporary price shocks.

In most years, the state pension would increase in line with average earnings growth. But in years where inflation surpasses wage growth, the pension would instead be pinned to inflation until earnings recover.

A similar system is used in Australia – but private pensions in the country are also more generous.

The IFS said this system would provide “greater predictability for both pensioners and policymakers”, while the Resolution Foundation said switching to it from next year could save around £650m in 2029-30.

Double lock

Another alternative would be a double lock, where the state pension increases each year by either average earnings growth or inflation – whichever is highest.

This would remove the guaranteed minimum increase of 2.5 per cent, which gives pensioners security that their payment will increase each year.

The IFS said it would not resolve the issue of the one-way ratchet effect, as the state pension would still rise faster than both earnings and prices in the long run and eventually become unsustainable.

Lifespan fund

The Tony Blair Institute (TBI) has proposed a more radical option, which involves scrapping the state pension altogether.

The former PM’s think tank has suggested replacing the state pension with a “lifespan fund” which allows individuals to build up credits via work and activities that can be converted into a guaranteed pension at retirement.

People would have the option of drawing cash during disruptions such as unemployment or taking on caring responsibilities, and the retirement age would be linked to individual health rather than a one-size-fits-all state-pension age.

But former pensions minister Steve Webb said the idea of linking state pension payments to individual health records and life expectancy was “deeply troubling”.

Kill the state pension triple lock, Burnham told

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