Boris Johnson and chancellor Rishi Sunak are at odds over changing the so-called “triple lock” on pensions due to the economic impact of the coronavirus pandemic, according to a report.
The triple lock, which was a Conservative manifesto pledge in 2019, means the state pension increases each year in line with either wages, inflation or 2.5 per cent – depending on which of the three figures is highest.
Mr Sunak has publicly expressed concerns about an “anomaly” in the system which could see the state pension soar as wages are forecast to fall due to the UK’s lockdown and then increase sharply in the next year.
The chancellor is reportedly considering plans to temporarily suspend the triple lock to help public finances through the pandemic.
However, Mr Johnson is said to be against the move because “the optics” would be bad for older voters who have overwhelmingly backed the Conservative Party in recent elections.
“The prime minister hates [changing the triple lock] because it was a manifesto pledge,” a government source said, according to The Times.
“He really doesn’t want to do it. The optics are terrible for older voters.”
The Office for Budget Responsibility, the government’s budget watchdog, has forecast that wages will collapse by 7.2 per cent this year before rebounding 18 per cent in 2021 – an outcome which would lead to a huge increase in the state pension.
Mr Sunak briefly acknowledged the issue during an evidence session for the Treasury Select Committee in July.
“Your committee on the triple lock has had evidence from others which has pointed out the anomaly in the way that it might work, depending on the very particular trajectory of earnings declines and the rapid rises over the next few years,” the chancellor said.