{"text":[[{"start":5.8,"text":"It seems paradoxical, to say the least, that UK pensioners living on the state pension should from next year — in theory — have to pay tax on part of it; the state would be giving benefits with one hand and taking some back with the other. In practice, even though the state pension will exceed the tax-free income threshold for the first time in April, the Burnham government has said people relying on the basic pension will not pay tax during this parliament. But the situation highlights how unsustainable it has become to maintain the overgenerous “triple lock” on pension increases when public finances are so tight and income tax thresholds frozen until 2031 — hitting working people above all."}],[{"start":47.2,"text":"Introduced in 2011, the triple lock — which ensures the state pension rises annually by the highest of inflation, earnings growth or 2.5 per cent — was intended to address decades of relative decline in retiree incomes. Britain’s state pension was also well below most OECD peers, though then, as now, it had more developed occupational and private pensions than many counterparts where state provision dominates."}],[{"start":72.36,"text":"The lock has partially achieved its aims. The state pension had dropped to about 16 per cent of mean earnings by 2010 but is about 26 per cent now, though still ungenerous by OECD standards. Pensioner poverty is well below 1990s levels, and below working-age poverty, though it has ticked up again in recent years. But the cost has been huge. State pension spending is £16bn a year higher than if there had been no triple lock, says the Institute for Fiscal Studies. At £154bn a year, pension costs roughly equal defence and education spending combined."}],[{"start":107.56,"text":"The triple lock also means that the second-largest line item in the UK budget after health ratchets up inexorably even if earnings growth or inflation is low. Those increases compound over time. It has strained social cohesion, protecting state payouts for an expanding elderly cohort while the relatively shrinking working population who pay for them have faced ever-higher tax burdens. Working-age benefits have meanwhile been eroded by real-term cuts and multiyear freezes."}],[{"start":134.6,"text":"But the political cost of ditching the lock — pensioners are a powerful electorate — has caused successive governments to balk. For the new Burnham government, it would mean breaking a Labour manifesto pledge from 2024. No government likes to do this, and every instance erodes trust in the political class. The previous Starmer government also discovered the perils of messing with benefits for the elderly, forced into a U-turn on its prudent but mishandled plan to means-test the winter fuel allowance."}],[{"start":164.64,"text":"Andy Burnham’s government should not underestimate, though, the rumbling discontent among working people, especially the young, over the relative largesse towards pensioners. Linking state pensions to earnings growth — potentially with an adjustment mechanism if inflation is high — would be fairer. It would better align growth in working-age and pensioner incomes, and tax revenues. About one in eight pensioners receives income only from the state pension and benefits, and campaign groups have warned that losing the triple lock could push more into poverty. But some of the savings could be funnelled into targeted support for the most needy."}],[{"start":201.44,"text":"While the total direct savings in this parliament may not be huge, a totemic move to make rises in one of the government’s biggest costs more sustainable would send a strong message to investors. It would help ease pressure on bond yields and give the government more headroom to raise long-term investment in areas such as defence — as well as helping consumers, for example, through lower mortgage costs. The triple lock has become unsustainable, but it needs a bold politician to break it."}],[{"start":229.12,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1789622425_4528.mp3"}