Miriam Cates: Time’s up for the triple lock but there’s little hope of pension reform from the Right

Miriam Cates is a presenter on GBNews and the former MP for Penistone and Stocksbridge.

I never used to understand the appeal of the radical left.

The combination of socialist economics and a rejection of tradition is a recipe for disaster, as has been proven time and again over the last century. But last week, for a brief moment at least, I experienced a pang of revolutionary zeal and saw why the extreme left, currently embodied in Zak Polanski’s Green Party, has become so popular with young people in Britain.

This revelation was delivered to me during a Reform UK press conference, where treasury spokesman Robert Jenrick announced that his party was now committed to keeping the pensions “triple lock.” In doing so, Jenrick slammed the final nail in the coffin for the hope of state pension reform from the political right.

Should the Tories (who still support the triple lock) or Reform, or a coalition of the two win the next General Election, Britain’s young people are now condemned to pay through the nose for the retirement of the wealthiest generation in history, while simultaneously being denied the opportunity for homeownership and parenthood that their parents and grandparents took for granted.

Storming the barricades seems like a perfectly reasonable response in such circumstances.

The triple lock is a relatively new policy, introduced by the Conservative-Lib Dem coalition government in 2011. It guarantees that each year, the state pension will rise by the highest of inflation, wages or 2.5 per cent. It is a mathematical certainty that the annual increase will always exceed the average of these three metrics, and that is why since in the last 15 years, the state pension has increased by 70 per cent, twice as much as wage growth over the same period.  By 2030, the triple lock alone – not the cost of the pension itself – will add £15 billion a year to Britain’s benefit bill. And the price tag will continue to rise as the value of the state pension increases and more of Britain’s “baby boomers” reach retirement age.

The pensions triple lock is a policy that everyone in Westminster – politicians, economists, think tankers and journalists – knows is unaffordable.

Since pensions are paid from current taxation and the birth rate has been falling for 50 years, a shrinking group of working age tax payers is taxed more and more each year to fund a growing number of pensioners. The state pension is driving our economy off a cliff, yet no one in the corridors of power dares to admit it in public – though all do so in private – for fear of losing the ‘grey’ vote.

I had hoped that Reform would be different.

In so many policy areas, Nigel Farage has stood bravely against the consensus, holding his ground and winning the argument, forcing the Conservative Party (eventually) into more conservative positions. On Brexit, immigration, the ECHR and Net Zero, Farage steeled himself against establishment opprobrium, and shifted the Overton Window. The Reform leader has even had the courage to ditch some of his own popular but unsound policies – such as raising the income tax threshold to £20 000 – by explaining the need for fiscal responsibility. In recent months, both Farage and Richard Tice have hinted that the triple lock may need a rethink, rolling the pitch – or so I thought – for an honest debate. Farage is often labelled a ‘populist,’ but the British political right has been considerably strengthened by his willingness to risk being unpopular.

That is why last week’s triple lock announcement is so disappointing.

In departing from the Faragist modus operandi, Reform UK has ducked the challenge of using their unique place in British politics to shift the dial on pensions reform and force the Conservatives into a more sensible position. It was noticeable that in the press conference, both Jenrick and Farage reinforced misunderstandings about how Britain’ s state pension is funded, saying that retirees have ‘paid into’ their pension, even though this is untrue. National Insurance payments are not saved for an individual; NI is a tax that is used to cover the cost of current public spending. The average pensioner receives around 25 per cent more from the state than they contributed in tax and NI. This popular myth – that pensioners receive their pensions from a ‘pot’ with their name on it – is one of the major political barriers to reform and politicians ought to take every opportunity to correct rather than perpetuate the misconception.

Reform (and the Conservatives) also claim that the triple lock can be afforded by cutting spending on foreigners and the workless. But our national finances are in such a perilous state that we must do everything at once. State pension expenditure has reached £150 billion a year; annual spending on asylum hotels (which should of course be stopped) sits at just £2 billion. Universal Credit claims by households including at least one foreign national amount to less than £15 billion a year. It is not possible to reduce spending enough without addressing the burgeoning cost of the state pension.

Supporters argue that Reform’s commitment to the triple lock is born of pragmatism, and that the Party must bolster its position among older voters. Pragmatic it may be, courageous it is not. And it is certainly not in the national interest.

Yet judging by the arguments raging online and in the media this week, it is clear that many on the right see the triple lock and the state pension as untouchable foundations of government policy. Three main arguments are being made by so-called conservatives in favour of the status quo, none of which stand up to scrutiny.

Firstly, opponents to pension reform argue that a generous state pension is part of the social contract and so, even though the state pension is technically not a contributory scheme, it would be immoral for the government to change the terms. But healthcare and unemployment benefits are also part of our social contract, and we all recognise that it is up to the government of the day to set the level of NHS spending and welfare eligibility criteria based on what is sensible and affordable. When the current state pension was introduced, life expectancy was 65 and the birth rate was high enough to sustain our native population. In all other areas of policy making we recognise that times have changed; why ring fence the state pension?

Secondly, supporters of the non-means tested state pension claim that those who paid tax throughout their working lives are entitled to this state handout because of their financial contribution. But by that logic, all working age taxpayers should be allowed to claim Universal Credit. The welfare state is based on the understanding that high earners pay a lot of tax and at the same time are not entitled to benefits. It’s unclear why this should only apply to those under the age of 67.

Lastly, it is argued that pensioners deserve a well-earned and comfortable retirement as a reward for their working life. I have no doubt that most of Britain’s current retirees have indeed worked hard. But no generation has ever before – or will again – enjoy such lengthy and wealthy retirements, benefitting as they have from improved healthcare and macroeconomic policies that saw asset prices rocket. Are Boomers more deserving than, say, the silent generation who fought the Second World War, or the Edwardians who endured the Great War, and the Spanish Flu? Of course we shouldn’t begrudge anyone a long and happy retirement, but we must also recognise that the extraordinarily advantageous circumstances of many current retirees owes more to luck than virtue.

It’s as if a form of wilful blindness has taken hold of some on the right, preventing them from seeing the state pension for what it has become – a universal basic income for those over a certain age.

Apparently without embarrassment, some conservatives complain that Britain’s benefit system is increasingly socialist – with growing expenditure on asylum seekers and those who don’t want to work – while being unwilling to contemplate reform to our most socialist benefit of all; the state pension. The same people who argue that disability benefits should only go to those who really need them seem remarkably comfortable with millionaires (one in four of today’s pensioners) and higher rate tax payers (three million retirees by the end of next year) receiving a state pension. Britain’s pension system now functions as a cash transfer from poorer young to wealthier old, in a reverse Robin Hood phenomenon that has become known online as ‘Boomer Communism’.

The delusion is so potent that it has led some to claim that those calling for pension spending restraint are ‘far left’. We really are flying upside down.

Is it any wonder Britain’s young people are so demoralised? My eldest son turns 18 this year and,  once he enters the workplace, a large proportion of the tax he pays will fund an income not just for poor pensioners, but for many who don’t need the money and are sitting on unearned asset wealth that he can never hope to acquire. If this is ‘capitalism’ then there are no prizes for guessing why young people might reject it.

In their press conference, the Reform Party pointed to polling that shows young people support the triple lock. But young people also support puppies and kittens; it doesn’t mean it will be a deciding issue for them at an election. And both Farage and Jenrick had some choice words about the apparently work-shy young, which is a bit rich considering they are the people who are being forced to fund a state pension that will be long gone by the time they reach old age.

Campaigning for economic reform should not be the preserve of the radical left.

There is a compelling conservative argument for addressing generational inequality, based on responsibility, opportunity and the virtue of living within our means. It is notable that Britain’s Reform Party is considerably less popular with young voters than their European counterparts. France’s Rassemblement Nationale and Germany’s AfD have attracted the support of around 30 per cent of young people in their respective nations; just 8 per cent of Britain’s youth say they will vote for Farage’s party.

Perhaps this is because Reform has leaned into Brexit and immigration, rather than issues of identity, ethnicity and economic inequality which drive concern among the young. Interestingly the newest entrant on the right – Rupert Lowe’s Restore Party – is deliberately directing its messaging at younger voters and calling on grandparents to make sacrifices for their grandchildren. Time will tell whether Restore can land their arguments with enough voters of all ages to make a difference.

Time is running out.

The welfare bill (of which around one half is the state pension) has now exceeded income tax receipts. Of course the very poor – of all ages – must be protected. But in refusing to address the burgeoning cost of state pensions, we are enriching the old at the expense of the young and condemning our economy to crisis. If that doesn’t radicalise you, nothing will.

Or perhaps you think we can just let the young eat cake.