One of the reasons I set up Prosper UK this year, with Ruth Davidson and the rest of our board, is that our politics has picked up a bad habit.
The parties leading the polls have decided the way to win is to promise that nothing hard will ever be asked of anyone. I want to explain why that is a dead end, and why the pensions triple lock has become the clearest test of whether a politician will level with people.
Look at how the triple lock is now discussed.
Reform has promised to keep it in full, whatever it costs. Labour, whoever leads the party, shows no sign of facing a welfare bill heading for £406 billion by the end of the decade. Both offer the same thing, easy answers now and the bill sent to someone else later. I spent my career in business before I led a region, and there is a plain word for an organisation run that way. It is insolvent.
For over 30 years I worked in a partnership where the figures were never optional. At John Lewis we shared the profits with staff through a bonus. During my time as Managing Director, good bonuses were paid every year, and we were proud of it. It was never fixed. In a good year it was generous, in a leaner year it was smaller, because you cannot hand out money the business has not earned without weakening the company and every job in it. It was widely admired. It was the only honest way to run things, and it is the instinct we try to bring to everything Prosper UK does.
The triple lock runs opposite to that instinct. Under the triple lock the state pension rises each year by the highest of three factors, inflation, average earnings growth or 2.5 per cent, and never the lowest, so the cost only travels one way. The state pension alone will cost around £146 billion this year, close to a 5 per cent of everything the country earns. By the end of the decade the lock will add roughly £15.5 billion a year on top of an earnings link, about three times what anyone expected at the start. Who pays for that? The young. Almost a million people aged 16 to 24 are already out of work, education or training, and on the current path, holding pension costs steady would push their retirement age towards 74.
