How Labour can unpick the triple lock

It's a commonplace that Britain is in an economic jam. There is not a sufficiently robust and growing economic base to provide the tax revenues at reasonable tax rates to fund all the public spending we crave from a fit-for-purpose NHS to the defence of a newly threatened realm.

- Will Hutton

Borrow? The bond markets stand ready to punish any misstep. Labour, in the crosshairs of these dilemmas, is witnessing its standing collapse - just as it has for its predecessors, and as it will for putative successors.

But there is an original way out. Britain should create a national investment superfund, the British Pension Plan (BPP), whose investments over the next two generations would grow so large that by the end of this century it would pay every British retiree their pension guaranteed in real terms, so creating vital public financial headroom.

The taxpayer would be free of a bill that already this year will top £138bn and which is set to increase by half in real terms within 50 years. An ageing society and the apparently politically irreversible commitment to the triple lock are wreaking their fiscal consequences.

The triple lock is the promise upheld by every political party (bar Reform) to increase the state pension annually by whatever metric offers the highest percentage - growth in real wages, inflation or 2.5% - introduced by the coalition government to address widespread pension poverty in 2010. As a result, the state pension has climbed to the highest in relation to average earnings since 1968 - but it needs to be that high. One in eight pensioners who have no other savings rely on it completely, a number which will proportionally double in the next decade as yet more pensioners with no savings join their ranks.