Former Bank of England chief economist calls for pension triple lock to be scrapped to fund support for one million NEETs
Mr Haldane said any move to ditch it would be politically difficult but ministers could make the case by showing older voters the funding would improve prospects for their children and grandchildren
Former Bank of England chief economist Andy Haldane has called for the pension triple lock to be scrapped, arguing that the money should be redirected towards helping young people into work or education.
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Mr Haldane, now president of the British Chambers of Commerce and an adviser to the Prime Minister on economic policy, told LBC the policy had “done its work” by reducing pensioner poverty
He said the Government should now focus on the one million young people classed as NEETs - not in education, employment or training.
Speaking to Andrew Marr, he said ending the triple lock could form part of a broader spending package designed to restore credibility with financial markets while tackling intergenerational unfairness.
“The triple lock came in [when] pensioner poverty was sky high,” he said.
“And it’s done its work. That’s been beaten back to a relatively low level. If not now, Andrew, then when?”
The triple lock guarantees that the state pension rises each year by whichever is highest of inflation, average earnings growth or 2.5%.
Read more: State pensioners set to breach tax threshold under ‘triple lock’ boost
Mr Haldane said any move to ditch it would be politically difficult, given the importance of pensioners as a voting group, but argued ministers could make the case by showing older voters the funding would be used to improve prospects for their children and grandchildren.
He said: “There’s a way of presenting the ditching of the triple lock […] as being part of a rounded package.
“And that package would be to enable action to be taken with those very young people, the one million NEETs.”
Mr Haldane added that the financial pressures facing young people were also being felt by their parents and grandparents.
“The costs being felt by those young people aren’t just being felt by them,” he said. “It’s being felt by their parents and grandparents as well.”
The former Bank economist also warned the Government against filling a potential hole in its fiscal plans through further tax rises.
He said borrowing costs had risen sharply over the past two weeks, making the Chancellor’s Budget later this month significantly more difficult.
Mr Haldane said the Government faced a choice between raising taxes and cutting spending, but insisted ministers should not impose further taxes on businesses.
Asked whether he would advise the Prime Minister to raise taxes, he replied: “Definitively no. Definitively no.”
He suggested the Prime Minister had made a mistake by failing to make the case for tax rises immediately upon taking office.
“With hindsight, that may have been a more propitious course to have taken,” he said.
“I understand the political cost of that. But equally, his stock of political capital is as high now as it ever will be. If you’re to do it, this is the moment.”
Mr Haldane said that opportunity may now have passed, leaving ministers with what he described as a “ragbag of taxes” that could anger individual groups without raising enough money to solve the problem.
He warned that new windfall taxes on banks or oil and gas firms, or an increase in capital gains tax, would undermine the Government’s efforts to present itself as pro-business.
“The market now suspects that this is a traditional tax-and-spend socialist government with better TikTok videos,” he said.
Mr Haldane argued that action on major areas of public spending, including welfare, pensions, the NHS or public-sector productivity, could deliver savings and reassure bond markets that the Government was serious about fiscal discipline.
He said credible spending reforms could lower UK borrowing costs by between 25 and 50 basis points, creating what he described as a potential “growth dividend”.