The triple lock remains in doubt after Hunt refused to say whether he would increase State Pension by inflation from April next year. The uncertainty is set to drag on after his evasive answer in Parliament this afternoon.
This morning the newly appointed Chancellor announced a string of Government u-turns, reversing almost everything predecessor Kwasi Kwarteng did in last month’s disastrous mini-budget.
Hunt’s emergency fiscal statement scrapped plans to cut the basic rate of income tax from 20 percent to 19 percent from next April. It will now remain at 20 per cent “indefinitely”.
He also axed the new VAT-free shopping scheme for non-UK visitors and the freeze on alcohol duty rates.
Prime Minister Liz Truss had previously scrapped plans to cut corporation tax and abolish the 45 percent additional rate income tax band.
This kind of backtracking is unprecedented.
Now a top pensions expert has warned these extreme u-turns mean that absolutely nothing is off the table, including the State pension triple lock.
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Suspending the triple lock set a dangerous precedent, making it easier to attack it a second time.
Given the financial emergency affecting the economy, Hunt could seize this opportunity to water it down or even scrap it altogether.
This afternoon, when taking questions in the House of Commons, Hunt was asked directly if he would pass on the triple lock increase in full.
He said he was aware of the importance of the triple lock to vulnerable pensioners but was “not making any commitments” to the mechanism at the moment.
Steven Cameron, pensions director at insurer Aegon, had earlier warned of the danger.
While Hunt reversed a string of mini-budget measures, Camerson said “it’s not clear what other changes remain on the table.”
Pensioners have now been left in limbo until Hunt makes his position clear. That may not be until October 31, when his spending review is complete.
Cameron said pensioners face an anxious wait to hear whether the State Pension will increase next April in line with inflation.
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Under the triple lock, the State Pension increases each year in line with earnings, inflation or 2.5 percent.
With consumer price growth expected to hit double digits, the inflation figure will almost certainly apply for the 2023/24 tax year, which begins next April. But only if the triple lock survives.
Each year’s increase is based on the previous September’s inflation figure, which will coincidentally be published this Wednesday.
Cameron acknowledged that the Government repeated its committment to the triple lock as recently as last week.
But he also cautioned: “So many u-turns have been made since then, that pensioners will be keeping everything crossed ahead of official confirmation.”
He called on the Government to make its position clear as soon as possible. “Providing this sooner rather than later, it will offer pensioners the confidence and stability Mr Hunt is keen to provide more widely.”
As pensioners face extreme poverty, retaining the triple lock is vital. The sooner Hunt eases pensioner concerns, the better.