Scrap triple lock on state pension to fund defence spending, former Bank of England chief economist tells LBC
The Government should scrap the triple lock on pensions to fund increases in defence spending, the former chief economist at the Bank of England has told LBC.
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Speaking on Tonight with Andrew Marr, Andy Haldane said that the pensions budget was a necessary concession to fund rearmament amid global crises.
The triple lock guarantees the state pension benefit increase in line with either inflation, average wage growth, or 2.5%, whichever is greater.
Critics of the people suggest that it is unaffordable amid Britain's stagnant growth, with economists suggesting the cost of maintaining the triple lock will balloon to £15 billion per year by the end of the decade.
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He told Andrew: “Pensions in particular, they're both blockbuster budgets - in total over £300 billion between them.
"The pensions one is the one that's been going through the gears at real pace and is running well ahead of the cost, even when the triple lock was first conceived.
"If there were a time to think what is the concession we make to fund the extra defence spending, I think you might well start with the triple lock and pensions.”
Labour, Reform and the Conservatives have all committed to extending the triple lock which was introduced by the coalition government in 2010.
Amid worries that Britain may be drawn into a war, Mr Haldane also suggested that Britons' bank deposits could be repurposed to fund the Armed Forces.
He suggested: "We have currently a lot of money among UK households parked up in bank deposits in cash, actually earning a negative rate of return in inflation-adjusted terms—more than £2 trillion.
"Now, I think if this was an initiative to mobilise those monies into a higher paying but sovereign asset, perhaps with a little tax sweetener, putting it in the tax wrapper of an ISA or something, that could unlock that largesse and fund a good chunk of getting to a defence spend that's three[% of GDP quickly] rather than three[% of GDP] on the never-never, which is the current government plan.”