Rishi Sunak has said pensioners are “at the forefront of my mind”, in a sign the triple lock could be protected as the Prime Minister and Chancellor Jeremy Hunt prepare for Thursday’s autumn statement.
The pair are considering imposing up to £60 billion in tax rises and spending cuts in Thursday’s autumn budget, but Mr Sunak hinted they could avoid real-terms cuts on state pensions by increasing them in line with rocketing inflation.
Members of Mr Sunak’s Cabinet including Michael Gove have previously warned against going back on the 2019 manifesto commitment of maintaining the pensions “triple lock” as inflation soars past 10%.
Despite the parlous state of the nation’s finances, Mr Hunt and Mr Sunak are expected to increase both pensions and benefits in line with rising prices.
The Times also reported Mr Sunak will announce a significant increase in the national living wage – from £9.50 an hour to around £10.40 – and hand cost-of-living payments to around eight million households on means-tested benefits.
Those on universal credit could receive £650, disability benefit recipients £150 and pensioner households £300 – with some people able to claim all three.
But the energy price guarantee is set to increase from a £2,500 bill for the average home to as much as £3,100 from April, The Times said.
Treasury sources would neither confirm nor deny speculation ahead of Thursday’s statement.
Mr Sunak hinted at keeping the pensions triple lock – which guarantees an increase in line with average earnings, inflation or 2.5%, whichever is higher – as he spoke to reporters accompanying him on his trip to the G20 in Bali.
He said: “My track record as Chancellor shows I care very much about those pensioners, particularly when it comes to things like energy and heating because they are especially vulnerable to cold weather.
“That’s why when I announced support earlier this year as Chancellor we made extra provision for pensioners to receive up to £300 alongside their winter fuel payments to help them cope with energy bills over the winter.
“So I am someone who understands the particular challenge of pensioners.
“They will always be at the forefront of my mind.”
He declined to comment on any specifics in the financial statement, but stressed that “we will put fairness and compassion at the heart of all the decisions we make”.
State pensions and benefits increased by 3.1% this year, after the triple lock was temporarily suspended for a year.
Mr Sunak’s predecessor Liz Truss had promised to retain the triple lock during her brief stint at No 10.
Ms Truss had also planned supply side reforms and the liberalisation of planning rules in her quest for economic growth.
Asked whether he will push ahead with those plans, Mr Sunak promised “an approach to planning that ensures that we get homes built in the places that we need them to be built, bring communities along with us on that.
“With regards to supply side reform, I think there’s lots we can do – not just planning, freeports are a good example of that, the labour markets are another opportunity, regulation when it comes to technology and innovation, there’s a bill going through parliament on gene editing, or financial services.”
The Prime Minister and Mr Hunt are considering allowing local authorities to impose larger rises in council tax next year to raise money for social care, among their tax-hiking measures.
Current rules mean local authorities with social care responsibilities must trigger a referendum to increase council tax by more than 2.99%.
The Daily Telegraph reported that figure could increase to allow rises up to 5% without a public vote, something which could result in B and D houses paying £100 a year more, with annual bills topping £2,000.