Should the triple lock be scrapped in the 6 March Budget?

BlackKnightMonty

Yes it should be scrapped

westv said:

BlackKnightMonty said:

Hoenir said:

Exodi said:

GibbsRule_No3. said:

The_Green_Hornet said:

The OP has their answer.

3.33 The government is also committed to supporting pensioner incomes by maintaining the triple lock. In 2024-25, the full yearly amount of the basic State Pension will be £3,700 higher, in cash terms, than in 2010. That’s £990 more than if it had been uprated by prices, and £1,000 more than if it had been uprated by earnings (since 2010).

HC 560 – Spring Budget 2024 (publishing.service.gov.uk)

Surely we knew the rise for 2024-2025 would be Triple Lock it is what happens 2025-2026 and beyond, under a possible Labour Government.

Rachel Reeves was doing an interview on LBC this evening, and despite their usual reluctance to give away policy commitments early, she explicitly stated labours commitment to maintaining the triple lock. But in my opinion this is obvious, it's difficult to win without the significant pensioner vote.

Given her book was an exercise in cut and paste. Her reluctance may well be as a result of a lack of real creative thought.  In reality the economic middle ground is very limited. Post war economic theory seems to be running out of road. 

The trouble with socialism is you eventually run out of other people’s money.

9.3m of working age on benefits.

12.7m on state pension.

https://www.gov.uk/government/statistics/dwp-benefits-statistics-february-2024/dwp-benefits-statistics-february-2024

Welfare bill set to rise from £295.8 for FY2324 to £360.1 for FY2829 thats a 22% rise over the next 5 years. 

https://obr.uk/docs/dlm_uploads/E03057758_OBR_EFO-March-2024_Web-AccessibleFinal.pdf

And wages are stagnant, so this comes from fiscal squeezing the productive half of society. (Actually it’s less than half).

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/previousReleases?page=1

Maybe I am reading it wrong but you seem to make the error that people can't be claiming benefits and be productive.

Yes they can be productive. But if you pay less in all taxes than what you receive in all benefits/services received then you are a net drain productively. That’s just a mathematical fact, despite it being an uncomfortable read.

Moonwolf

Yes it should be scrapped

BlackKnightMonty said:

westv said:

BlackKnightMonty said:

Hoenir said:

Exodi said:

GibbsRule_No3. said:

The_Green_Hornet said:

The OP has their answer.

3.33 The government is also committed to supporting pensioner incomes by maintaining the triple lock. In 2024-25, the full yearly amount of the basic State Pension will be £3,700 higher, in cash terms, than in 2010. That’s £990 more than if it had been uprated by prices, and £1,000 more than if it had been uprated by earnings (since 2010).

HC 560 – Spring Budget 2024 (publishing.service.gov.uk)

Surely we knew the rise for 2024-2025 would be Triple Lock it is what happens 2025-2026 and beyond, under a possible Labour Government.

Rachel Reeves was doing an interview on LBC this evening, and despite their usual reluctance to give away policy commitments early, she explicitly stated labours commitment to maintaining the triple lock. But in my opinion this is obvious, it's difficult to win without the significant pensioner vote.

Given her book was an exercise in cut and paste. Her reluctance may well be as a result of a lack of real creative thought.  In reality the economic middle ground is very limited. Post war economic theory seems to be running out of road. 

The trouble with socialism is you eventually run out of other people’s money.

9.3m of working age on benefits.

12.7m on state pension.

https://www.gov.uk/government/statistics/dwp-benefits-statistics-february-2024/dwp-benefits-statistics-february-2024

Welfare bill set to rise from £295.8 for FY2324 to £360.1 for FY2829 thats a 22% rise over the next 5 years. 

https://obr.uk/docs/dlm_uploads/E03057758_OBR_EFO-March-2024_Web-AccessibleFinal.pdf

And wages are stagnant, so this comes from fiscal squeezing the productive half of society. (Actually it’s less than half).

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/previousReleases?page=1

Maybe I am reading it wrong but you seem to make the error that people can't be claiming benefits and be productive.

Yes they can be productive. But if you pay less in all taxes than what you receive in all benefits/services received then you are a net drain productively. That’s just a mathematical fact, despite it being an uncomfortable read.

It might not be.  There are plenty of people earning but on benefits, are they a drain or is it their employer? What if your employer could afford to pay more and still make a profit? 

The government has decided that it would rather have more corporation tax and pay more benefits.  Or probably more precisely, it has decided that higher minimum wages are a risk to more businesses and the balance is such that in work benefits are a price to pay for the overall economy and or it has decided that its housing policy is better for the economy, even if that means it has to help more people with housing, or energy, or food security.

Put simply, if I add more in value to the economy than I take out, I don't think I am a drain, even if the simpler pay/benefits calculation suggests differently.

It isn't just about salary, there is a strong argument that it is about contribution and cost to and from GDP (or other whole economic measure).

I would add that surely you are only a drain on society if the shortfall is the case for your entire career, otherwise why do we subsidise students (and we do because most don't pay their loan back). 

[Deleted User]

nigelbb said:

The first change should be to put politicians on the same mixture of state and defined contribution pension as the real world, instead of their legally guaranteed, risk free public, solid gold sector pension, which apparently accretes benefits at five times the rate of private sector ones, achieving in ten years what takes forty-nine elsewhere. Only then will they understand what it's like to have people debating whether you deserve to get back a pension you've contributed to for forty+ years.

No. The fault is the diminution of private sector pensions by ruthless employers declaring DB pensions unaffordable. The reduction in trades union power & supine attitude of employees with regard to pensions plus lax labour laws have all contributed to the death of private sector DB pensions which used to be at the same level as public sector pensions.

Lawson put a tax on the pension fund surpluses (common in the 80s) that would otherwise have helped them compensate towards longer life expectancy.

Blair/Brown abolished tax relief on dividends, resulting in another huge loss.

Even if your arguments are correct, it would certainly concentrate politicians' minds to be in the same situation as the people into whose pension money they can currently dip, with no consequences to their own retirement. And maybe encourage them to change the labour laws that concern you.

coastline

nigelbb said:

The first change should be to put politicians on the same mixture of state and defined contribution pension as the real world, instead of their legally guaranteed, risk free public, solid gold sector pension, which apparently accretes benefits at five times the rate of private sector ones, achieving in ten years what takes forty-nine elsewhere. Only then will they understand what it's like to have people debating whether you deserve to get back a pension you've contributed to for forty+ years.

No. The fault is the diminution of private sector pensions by ruthless employers declaring DB pensions unaffordable. The reduction in trades union power & supine attitude of employees with regard to pensions plus lax labour laws have all contributed to the death of private sector DB pensions which used to be at the same level as public sector pensions.

Lawson put a tax on the pension fund surpluses (common in the 80s) that would otherwise have helped them compensate towards longer life expectancy.

Blair/Brown abolished tax relief on dividends, resulting in another huge loss.

Even if your arguments are correct, it would certainly concentrate politicians' minds to be in the same situation as the people into whose pension money they can currently dip, with no consequences to their own retirement. And maybe encourage them to change the labour laws that concern you.

There were a few things at play over the decades and I've mentioned the industrial decline earlier in this thread. Millions were made redundant and many employees used the funds to bridge the gap until 65 yo. A small job and a pension in the hope they'd make ends meet.  Taxes were introduced by both Tory and Labour . Companies took legal pension holidays as funds were in surplus due to booming stock markets. All listed below. 

So who the devil has ruined your pension? | Money | The Guardian

During the early 90s companies were using these alleged surpluses for "industrial restructuring", i e offering very generous early retirement schemes to employees in their 50s for "downsizing" or so that they could be replaced by younger less expensive recruits.

In the late 90s when the equity market was booming the companies also awarded themselves "contribution holidays" which in some cases were later extended to their employees as well. This meant that labour costs were held artificially low and those companies thereby gained a market advantage and greater profits which in turn boosted share prices. Not paying any contributions into the pension schemes soon became the norm, a habit it proved difficult to break.

The Decline of Defined Benefit Schemes (opalliance.org.uk)

BlackKnightMonty

Yes it should be scrapped

Moonwolf said:

BlackKnightMonty said:

westv said:

BlackKnightMonty said:

Hoenir said:

Exodi said:

GibbsRule_No3. said:

The_Green_Hornet said:

The OP has their answer.

3.33 The government is also committed to supporting pensioner incomes by maintaining the triple lock. In 2024-25, the full yearly amount of the basic State Pension will be £3,700 higher, in cash terms, than in 2010. That’s £990 more than if it had been uprated by prices, and £1,000 more than if it had been uprated by earnings (since 2010).

HC 560 – Spring Budget 2024 (publishing.service.gov.uk)

Surely we knew the rise for 2024-2025 would be Triple Lock it is what happens 2025-2026 and beyond, under a possible Labour Government.

Rachel Reeves was doing an interview on LBC this evening, and despite their usual reluctance to give away policy commitments early, she explicitly stated labours commitment to maintaining the triple lock. But in my opinion this is obvious, it's difficult to win without the significant pensioner vote.

Given her book was an exercise in cut and paste. Her reluctance may well be as a result of a lack of real creative thought.  In reality the economic middle ground is very limited. Post war economic theory seems to be running out of road. 

The trouble with socialism is you eventually run out of other people’s money.

9.3m of working age on benefits.

12.7m on state pension.

https://www.gov.uk/government/statistics/dwp-benefits-statistics-february-2024/dwp-benefits-statistics-february-2024

Welfare bill set to rise from £295.8 for FY2324 to £360.1 for FY2829 thats a 22% rise over the next 5 years. 

https://obr.uk/docs/dlm_uploads/E03057758_OBR_EFO-March-2024_Web-AccessibleFinal.pdf

And wages are stagnant, so this comes from fiscal squeezing the productive half of society. (Actually it’s less than half).

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/previousReleases?page=1

Maybe I am reading it wrong but you seem to make the error that people can't be claiming benefits and be productive.

Yes they can be productive. But if you pay less in all taxes than what you receive in all benefits/services received then you are a net drain productively. That’s just a mathematical fact, despite it being an uncomfortable read.

It might not be.  There are plenty of people earning but on benefits, are they a drain or is it their employer? What if your employer could afford to pay more and still make a profit? 

The government has decided that it would rather have more corporation tax and pay more benefits.  Or probably more precisely, it has decided that higher minimum wages are a risk to more businesses and the balance is such that in work benefits are a price to pay for the overall economy and or it has decided that its housing policy is better for the economy, even if that means it has to help more people with housing, or energy, or food security.

Put simply, if I add more in value to the economy than I take out, I don't think I am a drain, even if the simpler pay/benefits calculation suggests differently.

It isn't just about salary, there is a strong argument that it is about contribution and cost to and from GDP (or other whole economic measure).

I would add that surely you are only a drain on society if the shortfall is the case for your entire career, otherwise why do we subsidise students (and we do because most don't pay their loan back). 

Yes there is more to it, of course.  But this is the measure we have.

MSE_JC

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