This site has long believed that the ring-fencing of much public spending for older people is an act of social injustice. For example, pensions spending for older retired richer people has been protected while tax credits for younger working poorer people has not. This latest generation has it harder than the last one. Its members are less able to buy homes, less likely to retire on defined benefit pensions – and they pay tuition fees for higher education, which their predecessors did not.
George Osborne’s response during his time as Chancellor was that NHS spending must rise in real terms simply to ensure that the service’s funding bears some relation to rising health costs and demands. (It is otherwise with social care, which is troubling Conservatives MPs.) Osborne was also on the side of younger people when it came to helping them find homes, constantly pushing from the Treasury for more housebuilding. And he set about dealing with one of the boondoogles that Gordon Brown had brought in, passing the cost of providing free licence fees for older pensioners on to the BBC. Furthermore, he was cool about one of the biggest transfers of money to older voters – the state pension triple lock, blaming it on the Liberal Democrats.
It is true that one of the biggest proponents of the measure under the Coalition was the Pensions Minister, Steve Webb. He had a point. There is always some targeting in the pensions system, but Gordon Brown grossly over-did it. Having promised “the end of the means-test for our elderly people” in opposition, he promptly did the most reverse of ferrets in government, boosting it and undermining incentives to save. By 2010, Conservatives and Liberal Democrats agreed that enough was enough. Once appointed, Webb worked harmoniously with Iain Duncan Smith at Work and Pensions, and made the pensions brief his own, championing the triple lock pledge – namely, to increase the state pension each year by the higher of inflation, average earnings or a minimum of 2.5 per cent.
Osborne’s critics would counter that the triple lock was only necessary to counter the effects of the quantitative easing that he prolonged. But be that as it may, its costs are rising. The Government Actuary’s department warned recently that it could consume 11 per cent of all benefit expenditure by 2040. And Ministers are clearly reviewing the manifesto pledge as we move towards its expiry in 2010. First, Damian Green suggested in a pre-Party Conference interview that it might not be renewed after 2020. Then Philip Hammond, in his Autumn Statement, said that although the triple lock pledge will be honoured “as we look ahead to the next Parliament, we will need to ensure we tackle the challenges of rising longevity and fiscal sustainability. The words sounded like a tolling bell.
And yesterday, he counter-attacked Labour’s pledge to keep it after the next election: “I think it tells us everything we need to know about the Opposition – that three-and-a-half years out they’re willing to spray around commitments without any idea of what it’s going to cost them.” Webb is still defending the policy – but Nick Clegg, strikingly, is not. The Work and Pensions Select Committee says it should go. So does David Willetts. The triple lock’s time may be coming to an end.