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Long-term triple lock commitment ‘out of scope’ of pensions commission, Kendall says
Liz Kendall was asked if she thought it was impossible to maintain the triple lock guarantee given its cost and if she could guarantee it would be in Labour’s next manifesto.
She said:
The triple lock is out of scope of the (newly resurrected pension) commission. We’ve got a very clear commitment to that for the entirety of this parliament.
And what we’re asking the commission to do is genuinely look medium to longer term, the middle of this century, and how the state pension and second pensions work together.
The Office for Budget Responsibility recently said that the triple lock has already cost three times more than initially expected and suggested it was unaffordable in the long term.
The triple lock, which was introduced in 2011 by the coalition government, means the state pension increases every year in line with either inflation, wage increases or 2.5% – whichever is the highest.
Critics argue that it is “unfair” because many older people enjoy higher standards of living than younger people may expect to enjoy in the future, and believe younger people should not be expected to subsidise older people’s incomes to such an extent via the triple lock.
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Steve Barclay, chair of the finance committee who used to be chief secretary to the Treasury between February 2020 and September 2021, said government borrowing in May was at its second highest-level on record.
In response, the prime minister said he expects borrowing – the difference between public spending and income – to be in line with forecasts despite monthly “fluctuations” driven largely by global factors.
In its annual assessment published earlier this month, the Office for Budget Responsibility said the UK has “the sixth-highest debt, fifth-highest deficit and third-highest borrowing costs among 36 advanced economies”.
Senior Labour MP Liam Byrne has challenged Starmer over a series of reports from economic commentators pointing to declining living standards for the poorest households.
He told the prime minister: “We’ve got taxes and bills that are rising faster than wages.”
The Business and Trade Committee chair suggested the prime minister could increase capital gains tax on investment income to fund a “big, bold working-class tax cut”.
The prime minister said: “I’m not going to be tempted to start speculating on what might or might not be in the budget. It is going to come in the autumn.”
Starmer listed measures aimed at easing cost-of-living pressures, including the increase in the minimum wage levels, but added:
The central focus has to be on creating more wealth and making sure that we have a growing and thriving economy.
That’s been the single biggest failure of the last 14 years, which is we haven’t had an economy that has grown in any significant way.
Starmer said that the nearly one million young people out of work in the UK is a “huge challenge for the country”, adding that the system is “broken and needs to be mended”.
Labour MP tells Starmer she is 'ashamed' of the government's welfare proposals
Debbie Abrahams, chair of the work and pensions select committee, has questioned Starmer over the Treasury’s controversial disability cuts, which were rowed back on after the threat of a huge backbench rebellion (Starmer had been forced to dramatically abandoned the bill’s central plank of deep cuts to personal independence payments (Pip) to get it through).
Abrahams, who said the government’s reforms will push 150,000 people into poverty, said the proposed cuts were “far removed” from traditional Labour values of fairness and social justice, as well as compassion and common decency. Abrahams said she felt “ashamed” of the “poor” welfare legislation the government put forward. The Labour MP asked Starmer what he would like to say to the disabled people who experienced “fear and anxiety” before the government made concessions on its welfare bill.
Starmer defended the reforms, saying he wants employers to do more to help people get back into work – something that does not necessarily require legislation. He says ministers have commissioned an independent review tasked with helping people back into employment.
“Reform does not mean cuts to household incomes, already struggling households. We must do better prime minister. You mentioned about reducing poverty – this had the potential of actually increasing it,” Abrahams concluded.
The liaison committee put it to the prime minister that local councils looking to house homeless families were competing with the Home Office, which is looking to house asylum seekers.
Meg Hillier asks Keir Starmer what accommodation he is planning to take over to provide accommodation for (homeless) families. The prime minister struggled with this one. He said:
There is lots of housing in many local authorities that can be used and we are identifying where it can be used.
Pressed for examples, Starmer replied:
No but I will write in and give you details … leaving a huge tens of thousands unprocessed asylum seekers that need to be housed is a huge problem for this government.
Asked if this means he is planning to put homeless families into these hotels, the prime minister said:
No, no, no. We are looking at what accommodation is available and I will make sure we will send a detailed letter.
Florence Eshalomi, the chair of the housing select committee, is now pressing Starmer on Labour’s record on child poverty. She referenced the government’s decision to freeze the local housing allowance, which she says is keeping many people in poverty because these households cannot afford rent.
Many low-income renters are struggling to afford housing costs after Rachel Reeves’s decision to freeze the amount of housing benefit they receive in the budget last year.
Eshalomi, the Labour MP for Vauxhall and Camberwell Green, cites Local Government Association (LGA) data that shows there is a funding gap of around £7m over the last five years.
Starmer said:
I defend the decisions we have made. Obviously we head into the autumn we will get into another budget. There will be a chance to look again across the board. But we certainly made the right decision first time around …
In the end with housing we need to build and make available more housing across the board. There simply is not enough.
Starmer says he wants to get child poverty down by the end of his term
Keir Starmer says that tackling poverty in the UK is a priority for his government and commits to reduce it by the end of his term.
The prime minister said increasing household income, supporting people back into work and “boosting financial resilience” are ways his government is helping to tackle poverty.
He added that his government has set up a taskforce – co-chaired by work and pensions secretary Liz Kendall and education secretary Bridget Phillipson – to look specifically at child poverty and this will inform No 10’s strategy on poverty.
A record 4.5 million children were living in poverty in the UK in the year to April 2024, according to the latest figures. Labour’s flagship child poverty strategy has been delayed until at least the autumn, as it faces growing pressure to end the two-child limit on universal credit.
You can watch the live feed here (or at the top of the blog):
Prime minister grilled in front of liaison committee
The chair of the liaison committee, Meg Hillier, has started by asking Keir Starmer what he wants the UK to be like in three years time. The prime minister said he wants:
People “to feel better off”, in terms of living standards.
The NHS to work better
People to feel better in their “immediate” neighbourhoods and as a country.
Keir Starmer is scheduled to appear in front of senior cross-party MPs on the liaison committee at about 2.30pm. The prime minister will be asked about a range of topics, including around international affairs and Labour’s policies to tackle poverty in the UK. We will bring you all of the latest lines so stay with us.
Downing Street said the scenes at Epping were “clearly unacceptable”.
The prime minister’s official spokesperson said: “Peaceful protest is a cornerstone of our democracy, but it’s clearly unacceptable to see police coming under attack as they ensure that peaceful protest is able to take place.
“And I think Essex police put out the statement making very clear: people who protest peacefully, lawfully and responsibly cause us and the wider public no concern.
“However, we can never and will never tolerate criminal violence, and I think the prime minister will obviously echo that.”
Reform UK leader Nigel Farage has said the UK’s retirement age will “inevitably” have to rise as life expectancy increases.
Asked at a press conference in Westminster whether he shared the concern that triple lock pensions are becoming “increasingly unaffordable”, he said:
I share the concern with pensions being unaffordable on a national level, I also share the concern at the absolute scandal of the private pensions industry, which has served people terribly but done frightfully well for itself.
We’re going to have to face the reality that if people are living longer and longer, then inevitably retirement age is going to have to rise.
Long-term triple lock commitment ‘out of scope’ of pensions commission, Kendall says
Liz Kendall was asked if she thought it was impossible to maintain the triple lock guarantee given its cost and if she could guarantee it would be in Labour’s next manifesto.
She said:
The triple lock is out of scope of the (newly resurrected pension) commission. We’ve got a very clear commitment to that for the entirety of this parliament.
And what we’re asking the commission to do is genuinely look medium to longer term, the middle of this century, and how the state pension and second pensions work together.
The Office for Budget Responsibility recently said that the triple lock has already cost three times more than initially expected and suggested it was unaffordable in the long term.
The triple lock, which was introduced in 2011 by the coalition government, means the state pension increases every year in line with either inflation, wage increases or 2.5% – whichever is the highest.
Critics argue that it is “unfair” because many older people enjoy higher standards of living than younger people may expect to enjoy in the future, and believe younger people should not be expected to subsidise older people’s incomes to such an extent via the triple lock.
Liz Kendall’s move to resurrect the Pensions Commission (see post at 11.13) has been broadly welcomed by the pension industry as well as trade unions.
Paul Nowak, the general secretary of the TUC, said: “Far too many people won’t have enough pension for a decent retirement, and too many – especially women, BME [black, Asian and minority ethnic] and disabled workers and the self-employed – are shut out of the workplace pension system altogether.”
As we reported earlier, the government has launched a review into the state pension age – now at 66 for men and women, but is likely to rise to 67 from next May – and has commissioned two independent reports on this.
Damon Hopkins of financial adviser Broadstone, said: “We would not be surprised to see an acceleration applied to the increase of the state pension age.
“The combination of an ageing population and the huge fiscal cost of the state pension would suggest that a change is inevitable. A lower or later state pension would, of course, double down the need for reform in the private savings landscape.”
Keir Starmer to replace post-ministerial jobs watchdog with tougher regime
Pippa Crerar
Pippa Crerar is the Guardian’s political editor
Keir Starmer is to abolish the independent post-ministerial jobs watchdog, which has long been criticised as “toothless”, and – for the first time – financial penalties will be imposed on those who break the rules after leaving government.
As part of a standards overhaul that ministers hope will help improve public faith in the system, the Advisory Committee on Business Appointments (Acoba) will be scrapped and a tougher regime introduced.
Under the changes, which come into force from October and which the Guardian first reported last month, former ministers and senior officials found to have seriously breached the rules will be asked to repay any severance payment received.
There is currently no obligation for them to follow the guidance issued by Acoba to ensure there are no conflicts of interest or that lobbying does not take place, and the body has no ability to issue punishments.
Boris Johnson, the Conservative former prime minister, breached the rules on taking jobs after government on three separate occasions without facing a proper sanction, leading to calls to beef up Acoba’s powers.
Eligibility for ministerial severance payments will also be restricted, with those who leave office following a serious breach of the ministerial code or having served less than six months forgoing them entirely. A new independent ethics and integrity commission (EIC) will be set up to oversee standards.
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