A Tory minister has said he’s “pretty sure” the so-called ‘triple-lock’ on pensions won’t be scrapped.
It follows claims the commitment – a long-time Tory manifesto promise which sees the benefit rise by the highest of 2%, inflation or average wage rises – could be scrapped or frozen.
Key Government spending promises could be axed as Boris Johnson and Rishi Sunak gear up for a showdown on how to repair the public finances after coronavirus.
It’s thought maintaining the lock could land the Treasury with a £4 billion bill from next year.
And the Chancellor is reportedly considering cutting the £1 million pensions lifetime allowance, bringing in a single tax relief rate, or new taxation on employer contributions.
“Pensioners are going to be doing extremely well. It’s not politically that difficult a thing to smooth it out for a year,” a source told the Sunday Times.
But Business Secretary Kwasi Kwarteng told Sky News: “Lots of things have been discussed in government, I don’t think that that’s necessarily the way forward. I’m pretty sure the triple lock will stay.”
He later told LBC News: “The triple lock is something which we have been committed to for a number of years now.
“There has never been any suggestion that would be changed and I am sure it will be maintained.
“It is obviously a matter for the Chancellor to think about but I don’t think there is any chance he will change it.”
(Image: Getty Images)
(Image: Getty Images)
And he told Times Radio: “It was part of our manifestos remember. It’s been something we’ve been committed to for a number of years now and I haven’t seen anything which suggests that we’re going to undo it.”
The Chancellor and Prime Minister are also said to be at loggerheads over a social care overhaul which could cost £5billion a year.
A row is also brewing of the financing of the £200million National Flagship – seen as a replacement for the Royal Yacht Britannia.
An official described funding for the vessel as “a complete and utter s***show”.
The Northern Powerhouse Rail project to link key towns and cities across the region could also be in the Treasury’s crosshairs, it was reported. Northern Powerhouse Partnership director Henri Murison said: “Rumours that this commitment will be broken are deeply concerning for Northern leaders who are working towards rebalancing the economy.
“The North was promised HS2 and Northern Powerhouse Rail in full – to be abandoned now, just as we begin a recovery from the pandemic, would be a hammer blow.
“We need reassurance and certainty that there is no substance to these rumours, which means an Integrated Rail Plan published before the summer recess.”
Shadow Chief Secretary to the Treasury Bridget Phillipson said: “Incredibly, the Prime Minister has been the driving force behind huge amounts of wasted money and vanity projects without consulting his Chancellor.
“Uncosted promises are starting to catch up with both him and the Chancellor, and they’re leading to even more poor short-term decisions that store up long term problems – like blocking crucial investment in our children’s future and recovery.”
A Government spokesman said: “The Prime Minister and Chancellor work closely together, and have been in lockstep throughout the most challenging period any government has faced since the Second World War.”
He added: “We always ensure that all government spending provides value for money for the taxpayer.”
Mr Sunak is understood to be examining if commitments can be suspended, downgraded or axed in the run-up to this autumn’s Spending Review.
The Chancellor, who Tories see as more worried about the finances than the PM, is thought to be keen to reduce the amount of cash pumped out of the Treasury as he tackles the £300billion coronavirus-fuelled deficit.
A Conservative pledge to spend 0.7% of gross national income on foreign aid has already been ditched, with 0.5% now earmarked for overseas development.
To pay for the PM’s various spending commitments, the Government could either borrow more money, raise taxes or cut funds from other areas.
The 2019 Tory manifesto pledged not to lift income tax, VAT or national insurance.
Borrowing costs could climb as inflation rises.
And the Chancellor and PM have declared an end to austerity.
Confronted last November by Mr Johnson’s grand spending ideas, Mr Sunak joked: “I should take his credit card away.”
