Andy Burnham has committed to maintaining the triple lock pension guarantee, aligning himself with the Labour government, the Conservatives, and Reform UK on the policy.
The triple lock mechanism ensures the state pension rises annually by whichever is highest out of wage growth, inflation, or 2.5 per cent, funded by taxpayers.
Economists have widely labelled the policy as “unsustainable,” warning it causes the state pension to outpace workers’ earnings over time, loading pressure onto public finances.
The Office for Budget Responsibility stated the policy cost three times more than initially estimated since its introduction by George Osborne, calling it “unsustainable” for public sector debt.
In an interview with the i Paper, the Manchester mayor said it would be “very damaging” to break from Labour’s manifesto commitment on the triple lock.
Burnham added that an initial decision to scrap winter fuel payments “still comes up on doorsteps a lot here in Makerfield,” signalling sensitivity around pensioner issues ahead of the Makerfield by-election.
The sitting Manchester mayor also backed Rachel Reeves’ policy to allow pensioners to escape paying income tax as the state pension rises above the personal allowance threshold.
The state pension is set to rise above the £12,570 personal allowance threshold from next year, meaning pensioners could be drawn into the income tax system without relief measures.
Burnham’s anticipated return to parliament has unsettled bond traders, who fear his rise to Downing Street could loosen fiscal rules to fund tax cuts, higher defence spending, and possible nationalisation of firms such as Thames Water.
Sarah Coles, head of personal finance at AJ Bell, warned that Burnham had “mastered the art of the non-specific, positive answer,” making it difficult to predict how he would govern as Prime Minister.
Pantheon Macroeconomics analysts concluded that none of Burnham’s policies “lead to lower government spending or deregulation,” raising concerns about the fiscal direction of a potential Burnham-led government.
The economics consultancy said in a report: “We think risks are skewed to more borrowing than expected, as tax hikes on increasingly narrow bases could raise less money than hoped, though the news on borrowing would likely emerge slowly.”