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Andrew97
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B1555 - Triple Lock Bill 2020, TSR Conservative and Unionist Party




An Act to restrain the increased cost of the state pension.

BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:—


1. Definition
(1) Inflation is defined as that of the Consumer Prices Index as stated by the Bank Of England.

2. Qualification
(1) New persons in receipt of the UK state pension must reside permanently and with sole UK citizenship inside the United Kingdom.

3. Abolition of the Triple Lock
(1) The UK state pension shall hereby increase by 2.5% per annum subject to the following exemptions
(i) Inflation is below 1% in which case only a 1% rise is warranted.
(ii) Inflation is above 3% in which case a 3% rise is warranted.
(2) Increases to the state pension will occur from the first payment in April based upon a quarterly average of the Consumer Prices Index from the final quarter of the previous year.

4. Extent, short title and commencement
(1) This Act extends to the whole of the United Kingdom.
(2) The provisions of this Act come into force on 1st April 2020.
(3) This Act may be referred to as the Triple Lock Act 2020.

Notes
Spoiler:
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Triple Lock
Currently the annual state pension increases depend on the Triple lock which is to say that the state pension increase each year is the largest of either wage growth, the rate of inflation or 2.5%. Since the 1990-1991 financial year the cost of the state pension has risen from 3.3% GDP to 4.7% in the 2015-2016 financial year. This represents a significant cost to the taxpayer and an increasing unsustainable burden. This bill abolishes the expensive triple lock on pensions and sets the increase based on a much more reasonable rate (the Bank Of England's Inflation Target).

Costing
With regards to the Triple Lock the data from the OBR ends at the 2017-2018 financial year however if we take their forecasts through the 2019-2020 financial year as a given then the cost of the state pension at that point is ~£98.9bn with a forecast increase to the 2023-2024 financial year of ~£19.5bn. With wage growth forecast to exceed 3.25% throughout the forecast period being the determinate of the current triple lock calculation and CPI forecast to remain close to target this means that we can reasonably calculate a conservative 0.75% saving each year from the enactment of Section 3 of this bill.

https://www.bankofengland.co.uk/-/me...rise-chart.svg

In financial terms the projected cost becomes:

Base: £98.9bn
2020-2021: £100.7bn
2021-2022: £105.5bn
2022-2023: £111.0bn
2023-2024: £117.5bn

Generating a financial saving vs OBR forecast of:

2020-2021: £0.8bn
2021-2022: £0.8bn
2022-2023: £0.9bn
2023-2024: £0.9bn

https://cdn.obr.uk/March-2019_EFO_Web-Accessible.pdf - Page 105

Total Savings through the 2020’s will increase cumulatively.

https://obr.uk/forecasts-in-depth/ta...state-pension/
https://www.bankofengland.co.uk/-/me...nuary-2020.pdf - Page 15

https://www.parliament.uk/business/c...blished-16-17/
https://www.ft.com/content/e344e79c-...e-690fdae72044
http://www.telegraph.co.uk/news/2016...k-2020-philip/

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Jammy Duel
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Recycling failed bills for yet another raid on pensions.

See comments from last term.

Oh, in case you forgot "CPI forecast to remain close to target" is a meaningless statement given the forecast is meaningless, every official CPI forecast has it returning to 2% within a year or two and remaining there forevermore, and every CPI forecast is incredibly wrong.

EDIT: after looking for the bill it looks like I'm thinking of something else, budget perhaps and never turned into a bill?

Okay then, this bill is just another pensions raid from a man that seems to really hate pensioners for some reason. The IFS disagree somewhat with the figures presented, giving an early 90s figure of about 4% of GDP just for basic state pension (p64), and a real terms pension of £108 (vs £129 today), in real terms pensions have increased by 19%, meanwhile real GDP growth has been ~33% and real wages just this century have increased by 18%, in other words pensioners incomes have risen as fast in 30 years and workers' incomes have in 20 (and that's with a lost decade thrown in to keep the workers figure down).

So if pensioners are barely better off in real terms, and much worse off relative to those still in work and have their pensions grow barely half as fast as the economy in real terms then how come the cost of pensions has increased? Why, demographics of course. In 1990 there were about 8.8m people of pension age (ignoring lower retirement age for women), it has increased nearly 50% since then.

Before we start raiding pensions perhaps we should be asking a question: why is the proportion of economically active pensioners increasing? Is it because they are able to stay in work longer (in which case increase retirement age) or is it a case of they're not as well off as people want to think and so they are staying in work/going back to work to top up their pensions?
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Miss Maddie
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Pensions are not going to become cheap for the next 50 years. The best thing to do is to change the way the system works for the people who are starting to pay into their pensions today. Pensions should be based on investment. Using general taxation always goes badly
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Jammy Duel
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(Original post by Miss Maddie)
Pensions are not going to become cheap for the next 50 years. The best thing to do is to change the way the system works for the people who are starting to pay into their pensions today. Pensions should be based on investment. Using general taxation always goes badly
And that is exactly what the RL government has been doing for a number of years, trying to get people with large enough private pensions to be able to do away with the state pension as a regular thing and make it a safety net, that is however irrelevant to this bill which is one of Rakas' two pension raids, the other one being a raid on the private pensions that should be being encouraged
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LiberOfLondon
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Aye
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Jammy Duel
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(Original post by LiberOfLondon)
Aye
Pensioners should have their income reduced because?

the triple cap is dumb, but it is the dumbest bit that is retained by this bill, not only that but it is made even dumber
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The Mogg
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I'm no fan of this bill, I would prefer to cut spending elsewhere and maybe increase the retirement age, but since the author compromised I won't be voting against it. But whether I support or abstain is something I am yet to fully decide.
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Jammy Duel
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(Original post by The Mogg)
I'm no fan of this bill, I would prefer to cut spending elsewhere and maybe increase the retirement age, but since the author compromised I won't be voting against it. But whether I support or abstain is something I am yet to fully decide.
Compromised in what way? By allowing pensioners to become better off on very rare occasion? Why should pensioners be pretty much guaranteed to become worse off? If we are to "fix" the issues with the triple lock why should it be by retaining the worst part of it and ditching the two parts that actually make some sort of sense, other than Rakas' apparent dislike of pensioners?

A raid on pensions to pay for 3 pointless vanity projects, except not to pay for it, to pay for 2%
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Jammy Duel
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Of course this would not be a Rakas bill without the notes being full of links to nowhere.
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Baron of Sealand
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(Original post by Jammy Duel)
Compromised in what way? By allowing pensioners to become better off on very rare occasion? Why should pensioners be pretty much guaranteed to become worse off? If we are to "fix" the issues with the triple lock why should it be by retaining the worst part of it and ditching the two parts that actually make some sort of sense, other than Rakas' apparent dislike of pensioners?
Rakas doesn't hate pensioners. You can claim that a bill could have a certain effect, but you cannot just make claims about the intention. You don't see me saying you advocated inaction against the coronavirus because you dislike pensioners, even as you seemed to be suggesting that we shouldn't do anything because only old people and people with underlying health issues die.
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Saracen's Fez
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Drop section 2 and I'm certainly willing to listen.
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The Mogg
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(Original post by Jammy Duel)
Compromised in what way? By allowing pensioners to become better off on very rare occasion? Why should pensioners be pretty much guaranteed to become worse off? If we are to "fix" the issues with the triple lock why should it be by retaining the worst part of it and ditching the two parts that actually make some sort of sense, other than Rakas' apparent dislike of pensioners?

A raid on pensions to pay for 3 pointless vanity projects, except not to pay for it, to pay for 2%
Specifically in 3(1). You talk as if I just said I fully support this, I don't. However, I'm becoming cautious of opposing party items (since after 'thorough' investigation, I found out the only Tory item I have Aye'd this term is my own poorly written one, so that's a riveting fact.)
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Jammy Duel
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(Original post by Baron of Sealand)
Rakas doesn't hate pensioners. You can claim that a bill could have a certain effect, but you cannot just make claims about the intention. You don't see me saying you advocated inaction against the coronavirus because you dislike pensioners, even as you seemed to be suggesting that we shouldn't do anything because only old people and people with underlying health issues die.
To say he doesn't have a problem with pensioners he really does like the idea of raiding pensions to claw together a few pennies to try to offset his enormous vanity projects. Since 1990, the time span given, real GDP has grown 33%, real pensions 18%, and real wages since 2000 (ONS report doesn't go back further) by 18% despite 12 lost years among those 20. They're supposedly this great burden we've been throwing lots and lots of money at, making fat with their incomes, and yet until the triple lock they've gone down and down and down with the overall bill only increasing in real terms due to the 50% increase in pensioners. The solution? Keep the bit of the triple lock that makes the least sense, the part of the triple lock that means pensioners will continue to be increasingly worse off as their increases are capped at3% (and only when inflation is high enough for this to mean real terms reductions) while the rest of the time they're looking at not more than 2.5% the vast majority of the time as the working population is getting 3-4%

-----------------------------------------------------------

And I merely advocated following the advice of WHO and PHE instead of running around like headless chickens doing things we know to be ineffective

In fact when you look at government plans for dealing with that sort of thing inaction is the gist of it, keep going to work, keep going to school:

"Considering the extravagant death tolls mentioned in government documents, plans for a pandemic propose remarkably few restrictions on everyday life. Planning documents from 2013 state: ‘During an influenza pandemic, the government’s overall aim will be to encourage people to carry on as normal, as far as possible, if they are well, while taking additional precautions to protect themselves from infection and to lessen the risk of spread to others.’ The documents claim that stopping 90 per cent of air traffic to and from the UK would have minimal impact on the number of people who caught virus — at best it would succeed in delaying the peak of the pandemic in Britain by one to two weeks.

Nor do the government’s plans propose a nationwide closure of schools, even though it recognises that schools would very likely make their own decision to shut their doors. The problem is that closing schools creates childcare needs which could then result in a 30 per cent fall in the number of healthcare staff who are able to work."


And no, it isn't flu, it is however pretty similar to the sort of worst case flu the plans are drawn up for

https://www.spectator.co.uk/2020/02/...-and-alarming/
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Jammy Duel
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(Original post by The Mogg)
Specifically in 3(1). You talk as if I just said I fully support this, I don't. However, I'm becoming cautious of opposing party items (since after 'thorough' investigation, I found out the only Tory item I have Aye'd this term is my own poorly written one, so that's a riveting fact.)
You could just defect to the one party that isn't in favour of radical statism, attacking pensioners, actually supports privatisation, and hasn't rejected a major deficit reduction program because they're unwilling to contribute to it?

What about 3(1)? The fact that it is keeping the bit of the triple lock that makes the least sense, that is tied to absolutely nothing and is completely arbitrary?
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Jammy Duel
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My mistake, GDP has doubled in real terms, was looking at a real GDP graph because naturally that's what a nominal GDP search gives you and I didn't bother sense checking the figures
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The Mogg
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(Original post by Jammy Duel)
You could just defect to the one party that isn't in favour of radical statism, attacking pensioners, actually supports privatisation, and hasn't rejected a major deficit reduction program because they're unwilling to contribute to it?

What about 3(1)? The fact that it is keeping the bit of the triple lock that makes the least sense, that is tied to absolutely nothing and is completely arbitrary?
As flattering of an offer as that is (and one that almost makes sense, since I can feel my politics has shifted a lot since I first joined MHoC), I will decline (for now :wink2:)

I won't go into detail on party deliberations, If the author (who of course we have no idea who it is since they're yet to comment :wink2:) would like to tell you that he will. But for now I'll leave it to your judgement and imagination.

On another note, where are my fellow Tories come on?! Why am I (the one who doesn't fully agree with this bill) the only one here?!
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barnetlad
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Nay as I object to the 3% clause in particular.
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Jammy Duel
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(Original post by The Mogg)
As flattering of an offer as that is (and one that almost makes sense, since I can feel my politics has shifted a lot since I first joined MHoC), I will decline (for now :wink2:)

I won't go into detail on party deliberations, If the author (who of course we have no idea who it is since they're yet to comment :wink2:) would like to tell you that he will. But for now I'll leave it to your judgement and imagination.

On another note, where are my fellow Tories come on?! Why am I (the one who doesn't fully agree with this bill) the only one here?!
Because you're a party of vobots, because the vast majority are either completely absent from debate or otherwise afraid of debate in one form or another?

There is also no obvious compromise in 3(1) unless Rakas desired to make it just 2% because in his mind the BoE is perfectly effective and 2% inflation is all but guaranteed, despite the fact they have never been very good at hitting 2% and the BoE generally averages pushing 2%
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Jammy Duel
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(Original post by barnetlad)
Nay as I object to the 3% clause in particular.
What about it, the fact that when in effect pensioners are guaranteed real terms cuts, or are you against pensioners getting that much of a nominal increase after being battered for decades, irrespective of how high inflation and wage growth goes?
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Jammy Duel
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When looking at the source used for the pensions as a percentage of GDP the argument becomes even more flimsy, the lowest spend recorded was used (perhaps as a consequence of WWII?), a dip below the rate before and after with the rate in the mid-late 80s being 3.9% of GDP. After a marginal increase in 1991-92 the %age GDP spend remained stable before increasing when the economy contracted (quite trivially increasing the %age of GDP) and it has been stable since 2012-13 and is forecast to remain at that level for at least half a decade and actually have a slight decrease.

This is an increasing and unsustainable cost that is...erm...falling?
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