The “triple lock” promise – that pensions will always rise by whichever is higher out of inflation, earnings growth or 2.5 per cent – made by the Conservatives before the 2010 election was irresponsibly profligate. In 2015 a report published by the Government Actuary Department estimated that the pension triple lock would cost taxpayers an extra £6 billion a year, an unnecessary waste at a time when government expenditure needs to be falling.
Yet today Theresa May reasserted her commitment to the lock.
The Prime Minister was forced to defend the pledge after former pensions minster, Baroness Altmann, proposed an alternative double lock, whereby pensions would increase in line only with inflation or earnings. Lady Altmann warned that the cost to taxpayers of keeping the triple lock would be 'enormous' after the next election, and that the '2.5 percent bit doesn't make sense.'
And she isn't the first to call it into question. After resigning as work and pensions secretary in March this year, Iain Duncan Smith called for a review of the triple lock citing fears that welfare savings were disproportionately coming from working age benefits. Ditching the triple lock and freezing pensions in 2016-17, thereafter increasing them only with inflation, would save £10 billion by 2020-21.
The Taxpayers Alliance has long opposed the pension triple lock - it is unjustifiable and devoid of any economic merit.