Finance

Andy Burnham vows to keep triple lock and cut pensioner taxes

Ryan Brothwell 3 min read
Andy Burnham vows to keep triple lock and cut pensioner taxes

Key Points

  • Will Andy Burnham keep the triple lock? Yes - he says abandoning Labour's manifesto commitment would be "very damaging".
  • What is fiscal drag for pensioners? The freezing of the £12,570 personal allowance since 2021, pulling more pensioners into income tax as pensions rise with inflation.
  • How many pensioners will pay income tax by 2030? Around 9.3 million, roughly three-quarters of all pensioners, if thresholds stay frozen.
  • What is the triple lock forecast to cost? Up to £15.5 billion a year by 2030, per the OBR.

Andy Burnham has committed to protecting the state pension triple lock and signalled he would look at the frozen income tax thresholds, dragging more pensioners into paying tax, according to an interview with The i Paper.

The Greater Manchester Mayor told the paper that abandoning Labour’s manifesto commitment on the triple lock would be “a very damaging thing to do”, placing himself against a growing number of voices – including some on his own side – who argue the policy has become unaffordable.

The triple lock guarantees that the state pension rises each year by whichever is highest of inflation, average earnings growth or 2.5%.

The Office for Budget Responsibility has warned its annual cost is on course to reach £15.5 billion by 2030, roughly three times the original estimate, with spending on pensioners forecast to account for about half of total welfare spending by the end of the decade.

Burnham did not say whether he would keep the policy beyond the current Parliament, which must end by 2029 at the latest – a position in line with the current Government’s.

He also raised concerns about “fiscal drag”, the effect of frozen tax thresholds pulling more people into income tax as their incomes rise. While tax rates have not increased, the personal allowance has been held at £12,570 since 2021, even as pensions and wages have risen with inflation.

Forecasts suggest around 9.3 million pensioners – roughly three-quarters of all pensioners – could be paying income tax by 2030 if nothing changes.

Burnham told The i Paper that pensioners on the doorstep felt that what they gained through the triple lock was being taken back through tax, and that the next government needed to look at the issue.

The interview came ahead of Thursday’s Makerfield by-election, where Burnham is standing as Labour’s candidate. The seat has a higher share of pensioners than the country as a whole – around a quarter of residents are retired – making it particularly sensitive to any threat to the pension guarantee.

Reform UK, which had previously suggested the triple lock was open to debate before deciding internally to keep it, is running close to Labour in the contest.

The pensioner pledges sit alongside Burnham’s stated willingness to reduce the overall welfare bill to fund higher defence spending. In a separate interview, he said he was not squeamish about cutting the welfare bill, framing lower benefits spending as a way to create room for military investment.

The welfare bill is projected to reach £406 billion by the end of the decade.

His comments followed the resignation of Defence Secretary John Healey, who quit over the Prime Minister’s refusal to commit more money to defence – a crisis that has left Keir Starmer under significant pressure, with more than 100 Labour MPs reportedly saying he should go. R

eports suggested the Government was preparing a £13.5 billion funding increase for the Ministry of Defence over four years, well short of the £28 billion the department had requested.

Burnham argued the welfare bill could be brought down without “crude cuts”, pointing to Greater Manchester’s devolved “Working Well” employment support model, which he said has supported more than 70,000 residents and helped over 25,000 into work.

He called for more welfare and employment powers to be devolved to city regions.

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