2021-07-03 16:52:35 UTC
"The pension triple-lock is an insult to the UK’s young people"
...every Tory MP was elected on a manifesto pledge to keep the pension
triple lock in perpetuity.
But owing to a statistical accident, the chancellor finds it an
exceptionally expensive promise. The pledge is to uprate pensions by
consumer price inflation, by 2.5%, or by the rise in average earnings –
whichever is the highest. But by a freak of the pandemic, wages appear
to have risen by 5.6%, and later this month some economists predict a
rise to 8%. Don’t imagine ordinary earners have really received this
rise: the measure compares artificially low pay at the height of the
first wave, when about 10 million furloughed workers lost 20% of their
pay, with now. Low earners losing their jobs altogether takes them out
of the figures, making the average rise look artificially high. Torsten
Bell of the Resolution Foundation explains it like this: in a couple
where one earns, say, £10,000 and the other £30,000, if the low earner
loses their job, the couple’s average pay rises – because one drops out
of the pay calculation altogether. He suggests the underlying rate is
really just over 2%.
So much tripe... where to start?
First, "every Tory MP was elected on a manifesto pledge to keep the
pension triple lock"...
So... is she urging the government to renege on its manifesto
commitments on retirement pensions?
If that were to happen, Polly would certainly be heard screaming it from
the roof of the Guardian building (or maybe from the roof of her Tuscany
Secondly, what would the effect be? I am a pensioner. My retirement
pension (lower than it might have been because of occupational
contracting-out) is a pretty standard £572.84 per lunar month (£143.21 a
week). Of course, it isn't my only income.
But what would 5.6% (increase in average earnings) look like?
It would be £8.02.
If that part of the Triple Lock were ignored, as per Polly's
instructions, and only the rate of inflation were TIA, current warnings
are that that rate is likely to be somewhere nearer 4% by September
(measuring date) than the current 2.1%.
So standard "old" contracted out full pensions would increase from
£143.21 a week by about £5.73.
If the rate of inflation is, by a miracle, held to 2.5% or less, the
increase would be £3.58.
This is hardly wealth to be dreamed of. And the Conservatives' triple
lock promise has always been that RP will increase why whichever of
these three factors is the highest:
(a) Inflation Rate (to the previous September)
(b) Rate of increase in earnings (presumably to the previous September), or
I can't offhand remember a recent increase of more than the 2.5%. But
this year (actually meaning April 2022), it looks as though a higher
percentage will apply. No government could credibly welsh on that on the
first occasion that it was called upon.
She doesn't stop there. She claims that a couple earning £30,000 and
£10,000 respectively get an increase in average income if the £10,000
earner loses his/her job.
That's *some* crafting of figures. The average (per capita, the mean
average) changes from £20,000 to £15,000 and Polly reckons that's an
increase. She ought to get together with Diane Abbott for some lessons
(I'm not sure who could learn more).