Scrap pensions triple lock to help save UK finances, says influential thinktank

Centre for Policy Studies plan includes new limits on child benefit and foreign aid cuts

A right-of-centre thinktank with close links to Downing Street has called for the pensions triple lock to be scrapped, the aid budget to be cut and child benefit further limited as part of £30bn worth of spending cuts designed to spare the UK from post Covid-19 tax increases.

The Centre for Policy Studies (CPS) said its nine-point plan would ensure that the government was getting value for money and ensure that frontline services were protected as the Treasury took steps to repair the public finances.

Official figures out on Wednesday will show the mounting financial cost of the pandemic, with the UK on course to borrow more than £300bn this year.

The CPS, whose director Robert Colvile was seconded to help write the 2019 Conservative manifesto, said a chunk of the deficit would remain even after the economy returned to normal once the crisis was over.

Alex Morton, the CPS head of policy, said: “Taxes are already at historic highs, and any further increases risk choking off any post-Covid recovery. The government must re-examine its existing spending and ensure it is getting good value before considering raising tax further still.

“This package of savings is simultaneously radical but realistic – delivering better value for money for voters and allowing the government to continue funding its priorities. We strongly encourage the chancellor and his team to explore our suggestions ahead of the spending review and budget, and to identify any further savings that can be made.”

Ministers have insisted there would be no return to the austerity that marked the last decade, but the thinktank said that was different to saying every penny of the £907bn spent by the state each year before the crisis was wisely invested.

The CPS said £2bn a year would be saved were the triple lock to be replaced by a double lock, in which pensions would rise each year by whichever was the higher of earnings or inflation.

A further £3.5bn a year would come from a cut in the proportion of national income spent on overseas aid from 0.7% to 0.5%, while one-third of the £30bn of projected savings could be achieved by the sale and leaseback of public sector land.

The thinktank also called for:

A cut of 160,000 in public sector administrative staff at an estimated saving of £3.5bn.

The sale of high-value council homes and replacing them with cheaper properties (£1.5bn).

Reducing the number of quangos and combining their back-office functions (£3bn).

Streamlining local government and its administrative costs (£1bn).

Improving e-procurement and data sharing (£4.5bn).

Making child benefit part of the child tax credit system and tightening eligibility (£1bn).

The CPS accepted that many of its figures were “necessarily approximate”, but said each of its proposals should deliver a “significant sum” to the exchequer.

“We therefore urge the chancellor and his team to explore the suggestions below, and urgently identify other areas where savings can and must be made,” it said.