Why Johnson and the Treasury are at loggerheads on pensions
What happens in the UK on pensions? The article by Daniele Meloni
While polls continue to show good results for his government and leadership, Boris Johnson is experiencing hectic days, in line with his Shakespearean disposition. If in the Chesham and Amersham supplementary the Tories lost a seat in the Buckinghamshire fiefdom they held with over 16,000 votes ahead, the prime minister is especially concerned about the hefty bill of the pandemic.
Last week the Financial Times came out with a "bombshell" that could turn BoJo's possible re-election into a nightmare. Due to the pandemic, the Treasury Ministry – the very powerful Treasury – would like to put the "triple lock" on British citizens' pensions established in 2010 by Cameron and confirmed – with solemn commitment – by Johnson in the 2019 election campaign. What is this triple guarantee on pensions? Simple. The coalition government established that state pensions would increase each year by taking as a point of reference the highest point of one of these three statistics: average earnings on a national scale; prices measured by the Consumer Price Index (CPI), and 2.5%. In other words, if on average the British earned 3% more than the previous year, pensions would rise by 3%, but if the average earnings and CPI did not reach that increase, pensions would still increase by 2.5%. .
Thus, if growth and prices remain low, pensions would rise in such a way as to outweigh inflation, as often happened in the years when the triple lock was established. The costs in the state coffers from the many economic support schemes during the pandemic meant that to keep their promise, the Johnson government and its Chancellor of the Exchequer, Rishi Sunak, have to allocate another £ 4 billion for pensions. A figure that the Treasury mandarins find astounding. This is why they set to work to file it. The most concrete attempt, considering the premier's grievances, is to spread the triple lock over several years and no longer establish it on an annual basis. This is if, as Sunak wants, we must not go to affect the budget established for education and welfare. The Treasury has in fact already subscribed to an increase in the budget for educational inequalities, establishing a figure reduced by nine tenths compared to what was recommended by the National Council for Education (who then promptly resigned).
In practice, barricades are expected from the Tory majority and an increasingly heated conflict between Johnson and Sunak himself. Analysis of data from the House of Commons Library argues that most pension recipients – and therefore triple lock users – are Tory voters, mostly scattered in the south of the country. Exactly where the Chesham and Amersham seat is located. Disrespecting them would seriously jeopardize Johnson's majority at the next election.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/perche-johnson-e-il-treasury-sono-ai-ferri-corti-sulle-pensioni/ on Mon, 21 Jun 2021 09:25:44 +0000.