Pensions to rise 10.1% as Truss backs triple lock
Liz Truss today denied that she had any plans to abolish the triple lock on pensions, meaning pensioners can look forward to a 10.1% rise next April.
Amid speculation fuelled by a Downing Street briefing that the lock would be sacrificed among wide-ranging spending cuts, Ms Truss told MPs: “I am completely committed to the triple lock and so is the chancellor”.
The triple lock increases the state pension in line with whichever is highest – inflation, average earnings, or 2.5%. It was a commitment in Ms Truss’ leadership campaign and also a manifesto pledge at the 2019 election.
It is based on the September inflation rate which came in at 10.1%, just ahead of expectations and up on 9.9% in August.
The Prime Minister’s commitment means the full flat-rate state pension, paid to those reaching state pension age from 6 April 2016, will increase from £185.15 per week to £203.85 per week, or £10,600.20 per year, from April next year.
Downing Street provoked another potential Tory rebellion after stating that the Prime Minister may abandon the lock.
Sources said the prospect of stirring more discontent on the backbenchers persuaded Ms Truss to keep it, though critics will point to how many times she has reversed her policy commitments
The SNP’s Westminster leader Ian Blackford persisted with the cost of living line, stating it’s “not just pensioners feeling pain”.
In response, Ms Truss said she did not think Mr Blackford “can take yes for an answer” as she had made it clear the government is protecting the triple lock on pensions.
Ms Truss earlier admitted she had “made mistakes” as she tried to calm the tension in the Commons chamber.
But despite Labour leader Sir Keir Starmer joking that she will be “out by Christmas” after her ‘fantasy economics ended in disaster’, Ms Truss insisted she will not resign. “I am a fighter not a quitter,” she said.
The Office for National Statistics (ONS) said the consumer prices index (CPI) measure rose from an annual rate of 9.9% in August to match the recent 40-year high seen in July.
The biggest contributors were rising food costs, while fuel provided the greatest downside pressure.
Chancellor Jeremy Hunt said: “This government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth that will help everyone.”
The Chancellor is expected to announce £40 billion of savings in his Halloween Budget.
He has already reversed £32bn of Ms Truss’s tax cuts which has helped to calm the markets.
Retailers are facing a real challenge to encourage shoppers to splash out on Christmas gifts, said Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium.
“Scottish sales showed a sliver of growth in September, with a real terms rise of 0.8%. Nonetheless, there are clear signs customers are battening down the hatches ahead of the expected winter costs crunch.
“Food sales fell in real terms as customers cut back on the volume of goods. With food inflation now outpacing sales even grocery retailers are feeling the pressure as customers focus on essential items.
“Non-food sales were dominated by consumers looking for ways to reduce their energy bills. Duvets, blankets, and air fryers all did well as customers look to cut costs and prepare for winter.”