Rishi Sunak gave the strongest signal yet that the Government will abandon its manifesto pledge on raising the state pension and said the £20 increase in Universal Credit will end in September.
The Chancellor said the decision on pensions would be guided by “fairness both for pensioners and for taxpayers”, words seen at Westminster as paving the way to at least temporarily breaking the “triple lock” which was in the Conservative 2019 election manifesto.
The lock means the state pension goes up in line with the Consumer Prices Index (CPI) measure of inflation, increasing average wages, or 2.5 per cent, whichever is highest.
As the economy opens up after the pandemic, the Bank of England has said wages could jump by eight per cent, which could add £3 billion to the state pension bill as the Government struggles to balance the books after spending more than £300 billion dealing with the Covid-19 crisis.
Mr Sunak told BBC Breakfast: “The triple lock is the Government’s policy but I very much recognise people’s concerns. Our approach to these things will be driven by fairness — fairness both for pensioners and for taxpayers.”
The Chancellor told Times Radio the £20 weekly uplift in Universal Credit introduced during the pandemic would end in September, along with other “crisis interventions” such as the furlough scheme.
Six Tory former welfare secretaries, including Sir Iain Duncan Smith, have urged him to extend the Universal Credit uplift.
Mr Sunak denied a rift with Boris Johnson over public spending, saying they are united on funding for the NHS, schools, police and “levelling-up”.