The House of Lords has rejected government plans to scrap the triple lock on state pension for this year.
In a debate on this legislation, peers backed an amendment put down by former pensions minister Ros Altmann to restore the link with the state pension and earnings.
A total of 220 votes were in favour of this amendment, and 178 against. As a result this legislation will now go back to the House of Commons for another vote.
Altmann has argued that the decision to abandon the triple lock for one year broke manifesto promises from all parties, and would leave the poorest pensioners struggling with rising fuel and food bills.
Under this year’s ‘double lock’ the state pension had been due to rise by 3.1 per cent in April, based on September’s inflation figures. However in his budget last week Rishi Sunak said that inflation was set to average at 4 per cent over the coming years.
The decision to break the triple lock followed concerns that a rise in average earnings, following distortions caused by the Covid furlough scheme, would see the state pension rise by 8 per cent.
However Altmann has argued that there is scope to restore the link to earnings but adjust this figure to take into account distortions caused by the Covid pandemic, and that MPs in the Commons were not given this information when they were previously asked to vote on abandoning the triple lock.
Altmann says: “The Government is able to adjust the earnings data to account for the impact of the pandemic measures.
“This means pensioners will be better protected, as they were promised, and it is a matter of principle and trust. Pensioners are not a piggy bank for Chancellors to raid when money is tight. They are not a cash machine that the Treasury can take money from when they want to spend on other priorities.
“Pensioners deserve better. They are not all well off. We are already in a cost of living crisis, and a 3.1 per cent rise, as proposed by this bill if it had not been amended, is simply too low to protect pensioners as they were promised.”
LCP partner Steve Webb – a former Liberal Demoncrat pension minister – pointed out that this amendment had received cross-party support. However he said he expected the government to overturn the Lord’s ruling when the bill returned to the House of Commons.
He says: “Even though no government likes being defeated in the House of Lords, sometimes they will consider a concession in order to get their legislation through.
“But on an issue like this, there seems no prospect of a government concession when MPs are asked to consider the issue again. An alternative measure of earnings growth could lead to a multi-billion pound bill which could cause the Chancellor to re-write his Budget.
“By convention, the House of Commons has supremacy when it comes to financial matters and the Lords will come under great pressure to back down if the Commons simply vote down today’s amendment. The Government seems certain to use its comfortable majority in the Commons to overturn this defeat in the House of Lords. But it is a sign that any attempt to drop the triple lock for more than one year could meet some stiff resistance”.
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