Rishi Sunak gave his strongest hint that the government would protect the triple lock on pensions, saying that retirees “will always be at the forefront of my mind”.
The rule, which applies to UK state pensions, means that pensions must rise each year in line with the three highest possible numbers: inflation, average income, or 2.5%.
Sunak is likely to face a mass rebellion if changes are made to the triple lock, which means UK government pensions will increase in line with inflation.
The prime minister and chancellor, Jeremy Hunt, said they would look to put the brunt of the burden on those with “broad shoulders”.
Sunak told reporters on his way to the G20 summit in Bali that he had shown in the past that he understood the special pressures faced by retirees who are unable to increase their incomes by any other means in order to meet the cost of living.
“My track record as a consultant shows that I care a lot about those retired people, especially when it comes to things like power and heating because they are particularly vulnerable to cold weather,” he said.
“I am someone who understands the special challenge of retirees. They will always be at the forefront of my thinking.”
Sunak also gave a strong signal that he is not comfortable with the prospect of breaking the Conservatives statement’s commitment to maintaining the triple lock.
“Conservative governments have a proven track record of protecting pensioners, and in fact, the state pension today is about £700 higher than what would have been the result of the triple lock,” he said.
“We will put fairness and compassion at the center of all the decisions we make and I am confident that people will see that next Thursday… justice and compassion will be at the heart of everything we do.”
Sunak faces similar pressure to raise benefits in line with inflation – a commitment he made as an adviser – and one that Conservative MPs including members of his cabinet have said would be the right choice to protect the most vulnerable.
Increasing benefits and pensions in line with inflation is likely to cost £11 billion, while broad tax increases as well as public sector salaries are also expected to increase by around 2%, well below inflation.
Sunak also said the fall’s statement would signal more about his intentions on deregulation, a key line of Liz Truss’ strategy, despite canceling many of its initiatives including plans for investment zones.
The prime minister said there would be some liberalization of planning laws, without committing to major reforms, and also hinted that there are reforms he wants to consider in relation to workplace rights.
“I think there is a lot we can do – not just plan, free courses are a good example of that, job markets are another opportunity, and regulation when it comes to technology and innovation… I think there is more than one lever we can pull – all of those are going to fall into Supply-side repair bucket,” Sunak said.