Lib Dems will write the pensions triple lock guarantee into law

June 30, 2014 10:16 AM
By Steve Webb in Liberal Democrat Voice

Steve WebbFor decades, successive Labour and Conservative governments allowed the state pension to decline after Margaret Thatcher broke the 'earnings link' in 1980. The nadir of this was in the Labour years, when Gordon Brown increased the state pension by just 75p a week.

I was determined that the Liberal Democrats would do something about this appalling situation. In our manifesto in 2010 we campaigned on a 'triple lock' guarantee. This was a commitment that the pension would rise by whichever rating was highest in each year - by earnings, prices or 2.5%.

I am proud that we have used the triple lock in every year of this parliament. This means the state pension is £440 higher per year in 2014-15 than if it had been uprated just by earnings since we were in government.

We are announcing this week that we are serious about having a decent state pension, so we will write the triple lock into law, giving pensioners more certainty that their pension will continue to rise in future. This policy has been agreed by the Lib Dems' Federal Policy Committee and, while they and conference have the final say, I am keen that we can get out on the doorsteps in the weeks and months ahead and sell our record in this parliament and our promise for the next.

There are good reasons to keep the state pension going up each year. Most people in retirement have a mix of state and private pensions. Private pensions are increasingly not being linked to inflation so it is more important than ever than the state pension is index linked. This will make sure the new state pension remains above the means test, to encourage people to save for their retirement. It is also affordable, alongside the changes we have made on the state pension, including the state pension age. Even with the triple lock, we have still made the system more affordable than the one we inherited.

So when people ask you that inevitable question - what have the Lib Dems done in government? - you can proudly answer them. We have restored a fair increase in the state pension and we are now saying that we would write that commitment into law.