The Institute of Economic Affairs' "Alternative Budget" urges freezing the State Pension and suspending the triple lock for three years, cutting the welfare spending ceiling by 0.85% a year, and phasing out defined benefit pensions. The Prime Minister plans to adjust the triple lock from April 2030. Work and Pensions Secretary Pat McFadden called changes "inevitable", saying the new State Pension rises by £575 this year and will be over £2,000 a year higher by the end of this Parliament than in 2024, reaching over 30% of average earnings in 2029. Chancellor John Healey presents the Budget on October 28.
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- Pensioners and benefit claimants to get more DWP cash before Christmas
- Andy Burnham plan for state pensioners born before 1970
Andy Burnham has proposed changing the state pension 'triple lock' from 2030, a change that would affect every pensioner and those approaching retirement over the coming decade. The triple lock, introduced in 2012, guarantees annual rises in line with the highest of inflation, wage growth or 2.5%. Burnham's plan would remove the earnings element, effectively creating a double lock, so increases could be smaller and retirees could end up hundreds of pounds worse off a year over time. The Conservatives under Kemi Badenoch have said they would keep the triple lock, setting up a clear political divide before an election due before 2030. Money expert Antonia Medlicott of Investing Insiders argues a review is overdue, noting the pension is projected to cost more than National Insurance contributions by 2035 and rose 60 per cent between 2010 and 2023 while earnings rose 40 per cent.
- Government borrowing rises above forecasts to £24 . 5bn ahead of Budget
UK public sector net borrowing rose £1.8 billion year on year to £24.5 billion in September, £1.9 billion above the Office for Budget Responsibility forecast and above the £24.1 billion economists expected, just a week before Chancellor John Healey's first Budget. Total government spending rose 5.6% to £111.3 billion, driven by higher debt interest tied to rising global borrowing costs linked to the Middle East conflict; central government debt interest of £10.9 billion was the largest September figure on record. Public sector net debt passed £3 trillion for the first time, up £91.7 billion on a year earlier, but fell 0.7 percentage points as a share of GDP to 94%. UK inflation rose to an 11-month high of 3.5%, partly due to fuel costs linked to the Iran war. Economists say fiscal headroom is only £10 billion to £15 billion, so any Budget giveaways are likely to be modest and temporary.
- Badenoch takes aim at Healey over public finances ahead of Budget
- Badenoch takes aim at Healey over public finances ahead of Budget
- Healey to reject calls to raise capital gains tax in budget
Chancellor John Healey will not raise capital gains tax in next week's budget, despite calls from cabinet colleagues including Louise Haigh and Wes Streeting. According to Treasury sources, a rise could ultimately cost revenue if wealthy people delay selling assets or move them abroad. Instead, Healey is expected to tax banks' profits in the 28 October budget, as the UK's four largest lenders, HSBC, NatWest, Barclays and Lloyds Banking Group, generated £200bn in pre-tax profits over the past five years. Healey may accept a smaller fiscal headroom left by Rachel Reeves, as rising borrowing costs could halve the £24bn cushion, according to analysts. Conservative leader Kemi Badenoch will call for spending cuts rather than tax rises.
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