Burnham to scrap pension triple lock's earnings link from 2030

Prime Minister Andy Burnham has pledged to end the existing state pension triple lock from 2030, using the savings to fund a new national care service in England.

Officials have suggested the change could save £15bn a year by 2040. Under Burnham's plan, the state pension would still rise every year by at least inflation or 2.5%, but the automatic annual link with average earnings would go.

"The state pension will continue to rise every year at least by prices or 2.5%. And it will hold its value relative to earnings over time so that pensioners will always share in the rising prosperity of the nation," Burnham told the Labour Party conference in Liverpool in his first speech as prime minister.

"But this change will generate significant savings which we will use to build up our national care service," he said.

The triple lock, introduced in 2010 by the coalition government, currently raises the state pension every April by whichever is highest: inflation, earnings growth or 2.5%. Burnham said the mechanism would stay in place until 2030, at which point he wants to "adjust it".

The announcement followed days of questions over how Burnham would fund his social care reforms in England. His plan to offer free-at-the-point-of-use social care is being developed for voters in 2029, and he said it would be "fully funded and not through borrowing".

Burnham accepted he may "pay a political price" for the reforms. "Someone has to go through the pain barrier and rip the plaster off," he said.

He argued a national care service would be a "landmark" policy "as significant as the creation of the NHS itself and utterly essential to securing its future". He invoked his own family's experience, recalling how his grandmother Kitty's engagement ring was "ripped from her finger and stolen in a care home".

Economists question the scale of savings

Jonathan Cribb, deputy director at the Institute for Fiscal Studies, said the savings "are likely to be relatively small in the first few years, but rise substantially over time". He added that "we should not expect this reform to save enough that it could fund universal social care in the next parliament".

Sharon Graham, general secretary of the Unite union, told the BBC the government should have "pulled another lever", such as a wealth tax, rather than changing the triple lock.

The political backlash was immediate. Conservative leader Kemi Badenoch said "more tax rises are inevitable" under Labour's plan. Reform UK's Nigel Farage accused the PM of "launching an offensive against our elderly". Liberal Democrat leader Sir Ed Davey said families "cannot wait until after another election and it can't be funded from the pockets of our poorest pensioners".

Water, housing, Brexit and electoral reform

Burnham also used the speech to set out wider ambitions. He said he wants to repeal "Margaret Thatcher's ideological ban on public ownership of water companies", with legislation to be put before Parliament starting a "10-year journey to a very different water system", including new powers for mayors to hold "companies to account".

On housing, Burnham said it will be made easier for councils to acquire private rented homes in poor condition if landlords refuse to act after warnings, with the government changing the law "if necessary".

He told delegates "Brexit has done more harm than good" and, ahead of talks expected later this year with EU chiefs, said he would set out "different options" for Britain's "long-term relationship" with the bloc. "I will see if we can find consensus around one, which will give us clarity about our position and the future of the continent that we live in," he said.

To cheers in the hall, Burnham announced a national commission on electoral reform that could change the voting system for UK parliamentary elections. "We will contest the next election with a manifesto commitment to change the electoral system so that everyone's vote counts and everyone's voice is heard," he said.

Skills Minister Baroness Smith of Malvern offered a lukewarm response, telling the PA news agency: "Electoral reform isn't top of my list of priorities. Good luck to the commission. I shall be interested in what it comes out with."

Burnham also promised to "rebuild a system of comprehensive education in this country, with parity between academic and technical", and said the welfare system needs a "fundamental rethink" to fund new opportunities for young people.

Green Party leader Zack Polanski dismissed the speech as "half measures, reannouncements and tinkering".

With the triple lock change not due until 2030 and the care service plan set for the 2029 election, Burnham has tied two of his biggest pledges to the next parliament — betting that voters will accept pension reform in exchange for free social care.