Is breaking the triple lock on pensions the key to balancing Britain’s books?

Rumour has it that the chancellor, Jeremy Hunt, might be about to use his boltcutters on the established policy, which guarantees pensions will rise by the highest of three different parameters. Sean O’Grady asks what it would mean for the economy – and for the Tories

The chancellor stands to make a minimal gain in terms of the public finances but will still suffer maximum political fallout (Reuters)

The chancellor, Jeremy Hunt, is due to deliver his autumn statement, a sort of interim Budget, on 22 November, and already the media are carrying leaks about what’s in store – no substantial tax cuts, higher borrowing costs – and now, another heavy hint that the “triple lock” that boosts the state pension every year is to be “tweaked” or come “under attack”, depending on the various accounts. As with Hunt himself, any changes are probably going to be a fairly mild affair – but that creates problems of its own.

What is the ‘triple lock’?

It’s a Liberal Democrat-inspired policy and found its way into the coalition government’s programme in 2010. The idea is to protect the purchasing power of the old age pension, which had been policy for a long time, but by going further it can ensure that the income of pensioners keeps up with that of the rest of the population, because normally the trend is for wages to rise faster than prices.