Pensioners face a real-terms cut in their income next year as Prime Minister Liz Truss appears to have backed down on her commitment to the triple lock on state pensions following the appointment of new Chancellor Jeremy Hunt. The triple lock raises pensions by the highest of inflation, average earnings or 2.5%.
That would mean a 10% or so rise in April 2023, taking the New State Pension from £185.15 to just over £200 per week. But if Liz Truss ditches it the increase could be as low as 2.5% - meaning pensions going up by much lower than the rate of inflation.
The Prime Minister’s official spokesman said: “We are very aware of how many vulnerable pensioners thee are and indeed our priority ahead of this fiscal plan is we continue to protect the most vulnerable in society.
“The Prime Minister and the Chancellor are not making any commitments on individual policy areas at this point, but as I say the decisions will be made through the prism of what matters most to the most vulnerable.”
Mr Hunt told Cabinet colleagues they must review departmental budgets to find ways of saving taxpayers’ money, Downing Street has said.
The Prime Minister’s official spokesman said: “He made clear public spending would continue to rise overall but that departments continue to be asked to look at finding ways to save taxpayers’ money, with public spending standing at around £1 trillion pounds currently.
“The Chancellor said this work should focus on areas which should not affect the service the public receives.”
The spokesman was speaking after being allowed into the Cabinet meeting for the first time under Liz Truss’s leadership.
Downing Street has insisted it will stand by a promise of increasing defence spending to 3% of GDP by 2030 but suggested the “shape” of how the funding gets there could change.
The Prime Minister’s official spokesman said: “You’ve heard from the Chancellor on this.
“We are obviously committed to maintaining the UK’s position at the forefront of Nato, that’s why the PM committed to raise defence spending to 3% of GDP by 2030.
“The shape of that increase will be set out at future spending reviews in the normal way.”
Downing Street has not ruled out the Department of Health and Social Care having to find savings.
The Prime Minister’s official spokesman said: “On health, I can only point you to what the Chancellor has said on this on a number of occasions.
“There was a lengthy discussion in Cabinet on preparations for the medium-term fiscal plan and what that would entail, I’m not going to be getting into discussion as to who said what.”
Liz Truss told her Cabinet that the Government had gone “too far and too fast” with the mini-budget as she battles to remain in power.
The Prime Minister’s official spokesman said: “The Prime Minister opened Cabinet by reiterating that the Government had gone too far and too fast in the mini-budget and that this has been exacerbated by global factors, with inflation rising around the world.
“She said she acted to ensure economic stability but remained fully-committed to the growth agenda.
“The Prime Minister said she wanted to be honest with the public, that times would be tough, that by addressing long-standing issues now we can put the country on a stronger path for the future.”
