Senior Downing Street insiders have said talks between Number 10 and the Treasury have already taken place about suspending the guarantee on pension increases. The Chancellor has previously hinted the triple lock could be set aside temporarily if average earnings – one of three measures used to determine pension increases – is artificially impacted by the current Covid pandemic. But recent high-level talks are understood to have been driven by the “optics” of keeping the triple lock while also pushing ahead with increasing National Insurance Contributions (NICs) by one percent, which people reaching retirement age no longer have to pay.
One source told The Telegraph: “They are having conversations about this and whether the two things can come together.
“They are being considered together and that’s certainly what people want to do.”
Other insiders have claimed a final decision on the pension triple lock could now be delayed, although the two issues are still reported to be connected in the ongoing talks.
Last week, Mr Johnson, Mr Sunak and newly-appointed Health Secretary Sajid Javid all agreed on a new social care levy in an apparent breakthrough to fund long-awaited and much-needed reforms in the system.
The announcement has been delayed until Tuesday after all three senior ministers were forced to isolate after Mr Javid tested positive for Covid last week.
But alongside this, the Prime Minister is facing a Cabinet revolt over his plan to increase National Insurance Contributions to pay for the social care reforms as it would be a breach of the Conservative Party manifesto from the 2019 general election.
Five senior ministers are privately opposed to the plan, according to The Telegraph, with one warning over the weekend ahead of Parliament’s return in September after summer recess: “This is far from over.”
Chancellor Mr Sunak also fears working families could be hurt further if taxes are hiked during the ongoing pandemic, with a temporary suspension or tweaking the way the pension triple lock is calculated looking most likely.
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“Why should they be picking up the tab at the moment?”
Business groups have also expressed their strong opposition to a kike in NICs, which could fall on both employees and employers.
One prominent business figure warned increasing these contributions after a similar move made with Corporation Tax would see the current Conservative Government as being the “most anti-business” in recent memory.