V1555 – Triple Lock Bill 2020 (Third Reading)

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As many as are of the opinion, aye. (22)
48.89%
Of the contrary, no. (15)
33.33%
Abstain. (8)
17.78%
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Andrew97
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B1555 - Triple Lock Bill 2020 (Third Reading), TSR Conservative and Unionist Party


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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. Abolition of the Triple Lock
(1) The UK state pension shall hereby annually increase by CPI+0.5% subject to the following exemptions
(i) Inflation is below 0.5% in which case a 1% increase will occur.
(ii) Inflation is above 3.5% in which case a 4% increase will occur.
(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.

3. 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
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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

The most recent CPI projections from the March 2020 OBR economic and Fiscal Outlook are;

2020-2021: 1.8%
2021-2022: 2.1%
2022-2023: 2.1%
2023-2024: 2.0%

The most recent earnings projections from the March 2020 OBR economic and Fiscal Outlook are;

2020-2021: 3.6%
2021-2022: 3.4%
2022-2023: 3.1%
2023-2024: 3.1%

In financial terms the projected cost becomes:

Base: £111.7bn
2020-2021: £113.2bn
2021-2022: £118.0bn
2022-2023: £123.8bn
2023-2024: £129.8bn

Generating a financial saving vs OBR forecast of:

2020-2021: £1.5bn
2021-2022: £1.0bn
2022-2023: £0.7bn
2023-2024: £0.8bn

https://cdn.obr.uk/EFO_March-2020_Accessible.pdf - Pages 17 and 102

Total Savings through the 2020’s will increase cumulatively.

https://obr.uk/forecasts-in-depth/ta...state-pension/

Changes For Second Reading
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1. Abolition of Section 2
2. Amendments to Section 3.1, 3.1.1 and 3.1.2
3. Changes to Notes to reflect new costing
4. Changes to formatting to reflect renumbering of sections

Changes for Division
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1. Amended costing in notes to reflect the March 2020 OBR report.

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1st superstar
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Nay I strongly oppose this bill!
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Jammy Duel
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And the notes still don't match up with the bill, a bill to reduce pensions that increases them?
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Andrew97
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One No has been changed to an Aye for gr8wizard10
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Andrew97
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Order, order!

The Ayes to the right: 23
The Noes to the left: 14
Abstains: 8

The Ayes have it, the Ayes have it.Unlock!
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