THE TORY government is preparing to simultaneously end the ‘triple lock’ pensions guarantee and raise the employee national insurance contribution (NIC) by one per cent, in order to raise £10bn to pay for PM Johnson’s planned ‘social care reforms’, it was reported yesterday.
According to ‘senior government sources’ quoted in yesterday’s Sunday Telegraph newspaper: ‘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.’
At present, under the ‘triple lock’, the state pension increases each year in line with one out of three measures: either the Consumer Price Index (CPI), the percentage increase in average wages, or 2.5 per cent, whichever is the highest.
With average wage growth currently being calculated at 8 per cent, the Tories are determined that pensioners must be denied such an increase next year.
Meanwhile, the NIC is described as a ‘tax on the young’ and a one per cent increase will take hundreds of pounds a year out of the wage packets of the lowest paid workers.
These threats to the incomes of both the old and the young later this year and next, came yesterday as two new reports from the Public Accounts Committee (PAC) said the government’s response to the Covid-19 crisis has exposed UK taxpayers to ‘significant financial risks’.
The MPs also attacked government spending on unusable PPE protective kit.
In the cross-party reports published yesterday, the PAC said the taxpayer would be exposed to ‘significant financial risks for decades to come’ with the estimated cost of the government’s measures having already hit £372bn in May.
UK government debt is now over £2.2 trillion, or about 99.7% of GDP – a rate not seen since the early 1960s. In June alone, debt interest cost £8.7bn.
In one example of future Covid costs, the PAC says taxpayers could be liable for an estimated £26 billion of bad loans, out of a total £92 billion of loans guaranteed by the government.
The report states: ‘While we acknowledge that there was a need to relax the usual rules surrounding major spending decisions … we are concerned that this has created serious risks that may require managing for years.’
PAC chairwoman Dame Meg Hillier said: ‘With eye-watering sums of money spent on Covid measures so far, the government needs to be clear, now, how this will be managed going forward, and over what period of time.’
The MPs also said they are ‘concerned that despite spending over £10bn on supplies, the (personal protective equipment) stockpile is not fit for purpose’.
Out of 32 billion items of PPE ordered by the Department of Health and Social Care, the committee said 11 billion had been distributed, while 12.6 billion are stored in the UK as central stock.
But some 8.4 billion items on order from other countries have still not arrived in the UK. The stockpile, MPs added, is costing about £6.7m a week to store, with potential waste levels ‘unacceptably high’.
According to the report, there were 10,000 shipping containers of PPE still to be unpacked as of May this year – but that it had already been determined that 2.1 billion PPE items were unusable in medical settings.
The MPs said this equated to more than £2bn of taxpayers’ money – and was over five times the estimate of PPE found to be unfit for purpose given to MPs by DHSC in January.