Labour Mayor Andy Burnham Accused of Targeting Pensioners to Fund Bigger Government

Andy Burnham has signalled that pensioners could face changes to their benefits as he seeks to fund Labour’s shift towards a more left-wing agenda.

Speaking at the Labour conference in Liverpool for the first time since becoming leader, the Prime Minister said the party’s next election manifesto would pledge to abolish the state pension “triple lock”.

Reducing the protection on pension payments could deliver savings to help establish an NHS-style social care service, a policy estimated to cost around £18billion annually. Mr Burnham said he would have his late father Roy in mind as he argues for what he described as a “new settlement”.

The proposal received cheers from delegates inside the conference hall, but has already triggered anger among trade unions and unease within the Cabinet. Opponents have warned that targeting pensioners could amount to “electoral suicide”.

The Prime Minister also outlined his ambition for a government with a far greater role in managing strategic parts of the economy, echoing the interventionist approach associated with the 1970s.

Mr Burnham argued that Britain had followed “the wrong path for a long time”, blaming a combination of deindustrialisation, deregulation, privatisation, austerity and Brexit.

He said his aim was to restore a sense of “hope”, drawing comparisons with Clement Attlee’s Labour government elected in 1945. The Prime Minister promised a major expansion of council housing, although he did not explain how it would be financed, and said Right to Buy rules would be removed for newly built homes.

“We built the common good. Or at least we did until the 1980s,” Mr Burnham told activists. “Then the common wealth created for the many was suddenly treated as an opportunity for the few.”

“Homes. Water. Energy. Transport. Care. They were broken up and sold off.”

In a strongly socialist appeal to voters, Mr Burnham said the political Right had surrendered too much control, arguing that the sale of essential services had weakened the country’s economic power.

He also said political influence had been damaged by the erosion of local councils, while Britain’s ability to manage immigration had been weakened by Brexit.

“Later this year, we will publish our plan for Britain,” he said. “It will explain how, over the next 10 years, we will make this country work for you again.”

He promised greater public control over essential services, alongside more power for individuals and communities to shape their own priorities.

Other major announcements and moments from the Prime Minister’s speech included:

Mr Burnham said the proposed social care service would be free when people need it, meaning no care costs would be taken from an individual’s basic state pension.

‘We will start laying the ground now for the National Care Service and introduce it in the next Parliament,’ he said.

‘Louise Casey’s review will advise us on exactly how and Yvette and I will seek to build the maximum consensus around her recommendations.

‘It will be fully funded, and not through borrowing.

‘Conference, I won’t pretend some of this won’t be difficult. I accept I may pay a political price.

‘But someone has to go through the pain barrier and rip the plaster off.

‘I am being honest. We promised in our manifesto to keep the Triple Lock unchanged throughout this Parliament.

‘I will honour that promise. That will take the state pension to a record high.

‘But from 2030 we will adjust it. From then the state pension will continue to rise every year at least by prices or 2.5 per cent.

‘And it will hold its value relative to earnings over time so that pensioners will always share in the rising prosperity of the nation.

‘This change will generate significant savings which we will use to build up our National Care Service.’

He added: ‘A state pension that rises every year. No care charges.

‘And a high-quality National Care Service to give peace of mind in later life.

‘A new settlement for older people and their families.

‘In memory of my dad and out of respect for everyone who cared for him.’

However, the premier is already facing Labour fury over ‘suicidal’ moves to fund at least part of his free-spending prospectus by scrapping the state pension ‘triple lock’. 

Unions warned it was effectively ‘picking the pockets’ of the elderly, with signs of disquiet stretching into the Cabinet.

The ratchet – which means payments go up by the highest out of inflation, earnings and 2.5 per cent – was introduced by the Coalition Government.

The step would be particularly controversial as the premier has stubbornly dismissed the idea of cuts to benefits such as PIP, instead making the case for reforms to get people into work.

In an unusual move, Mr Burnham pulled his most senior ministers out of fringe events for a briefing on his ideas just hours before he was due to speak. 

Mr Burnham’s speech was heavy on rhetoric but contained relatively little immediate concrete action. He suggested that he would need time to bring about fundamental change, saying: ‘I have to be honest about what the country can afford.

‘I will stick to our fiscal rules to get borrowing and debt down.

‘The approach I am outlining today is a responsible one.’

Mr Burnham again dismissed calls for outright cuts to benefits, instead arguing that he can invest to bring down costs.

‘If we build a new generation of council homes, we will save billions from housing benefit over the decade,’ he said.

‘If we get energy bills down, we will better control inflation and support the economy.

‘If we change the way we support people, we will get the welfare bill down.

‘Not through crude cuts. That should never be the Labour way.

‘But by investing in people’s success, supporting them to get where they want to be, rather than paying for failure.’

Two months after ousting Keir Starmer, Mr Burnham will say he needs to give the country ‘hope again’ with ‘less drift and more direction’.

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Echoing the conference slogan of ‘Hope Again’, Mr Burnham will tell party members that ‘hope comes from honesty and from saying the things politicians usually avoid’.

Making another attempt to blame Thatcher and ‘Neoliberalism’ for the Government’s problems, he will condemn the ‘flawed thinking of the last 40 years’. 

He will also announce a new publicly-owned ‘Great British Grid’ in a bid to bring UK energy costs down in line with European nations within a decade.

The PM will say: ‘We can’t carry on as we are. Politics-as-usual has taken Britain backwards.

‘More of the same isn’t good enough and isn’t going to get us where we need to be.’

Mr Burnham will pledge to take power out of the hands of ‘vested interests’ give the public sector ‘more control of the basics so that we can make it more functional again’.

Renationalisation of the railways is already under way, but the PM will signal he wants further government control of other sectors, including water, energy and housing.

He is expected to make clear the Government is ready to put Thames Water in a ‘special administration scheme’ if a bailout plan fails, effectively taking public ownership of the debt-laden giant.

Cabinet ministers have been refusing to commit to the triple lock beyond this Parliament – although they insist Labour’s pledge to keep it until the next election stands.

On a tour of broadcast studios before the speech, Labour Deputy Leader Lucy Powell said only that Mr Burnham was prepared to take on difficult issues.

Housing Secretary Angela Rayner suggested pensioners would be willing to take the hit if they know social care will get better.

However, Bridget Phillipson sounded a much more negative note, suggesting that curbing state pensions could look like intergeneration warfare. 

The backdrop to Mr Burnham’s big conference moment is an increasingly stormy economic situation, with the Middle East crisis causing chaos on energy markets.

As he grapples with the books for a Budget on October 28, Chancellor John Healey warned delegates yesterday that there could not be a spending spree like under Tony Blair after 1997.

Inflation, slowing growth and surging debt costs have been eroding Mr Healey’s ‘headroom’ against the Government’s fiscal rules, meaning he is likely to need spending cuts or tax rises. The former would be fiercely resisted by Labour MPs. 

YouGov polling released today suggests that 64 per cent of Labour members think that taxes and Government spending are too low. That is out of step with the wider public, where just 21 per cent hold the same opinion.

In a potential boon for Mr Burnham internally, pensions are the most popular area for spending cuts among Labour activists, with 32 per cent saying that is where they could find savings if necessary.

However, among Britons more generally only 8 per cent would cut pensions, with 60 per cent preferring overseas aid and 42 per cent saying welfare. 

Labour sources said full-scale nationalisation of the major utilities is unlikely at this stage because of the enormous cost.

But ministers are exploring other ways to intervene in the market to give the Government greater control, including appointing elected mayors to lead regional oversight boards.

Mr Burnham has said social care reforms will not be in place until after the next election, with Whitehall troubleshooter Baroness Casey carrying out a review. 

The prospect of downgrading the triple lock sparked an immediate backlash from Labour’s allies. 

Unite general secretary Sharon Graham told BBC Radio 4’s Today programme: ‘Instead of going and trying to pick the pocket of pensioners, we need to move over to the other side of the equation and look at things like wealth taxes, way before we try to stop something like the triple lock…’

The Unite general secretary added: ‘When we met with Andy this week, it certainly wasn’t mentioned.

‘But I do think that it’s important that Labour make sure that working-class people know that they’re on their side, and this would be a direction of travel that would say the opposite to that.’

Asked whether the lock should be reformed to fund social care, Ms Graham said: ‘What I understood the National Care Service to be was a universal benefit: everybody paid in and everybody gets out, and that is what actually the principle of that is.

‘Going to a group of people who are getting around £12,500 a year in order to pay for it to take away their security is wrong. I think it’s morally wrong.’

However, Ms Rayner told a live recording of Sky’s Electoral Dysfunction podcast that Mr Burnham was ready to put himself on the line. His previous attempt to reform social care during Gordon Brown’s premiership was slammed as a ‘death tax’.

Ms Rayner said: ‘We’ve got a prime minister who said ‘I am okay with burning through all my political capital to the point where it might finish me off on the basis that my legacy will be something better and different’.’

The Cabinet minister suggested pensioners could be sympathetic if they knew where the money was going instead.

‘The high principle on this is that people have paid in all their lives. They are willing, I think, to look at that,’ she said.

‘But what they don’t want is what they consider to be, quite frankly, incompetent politicians that are going to take something from us to fill a black hole.

‘If they can see that this is going to improve and and move it into a way that delivers, so you’ve got a retail offer of ‘that’s no longer fit for purpose, but we can either do something for the younger generation because of the intergenerational disparities, or something on social care or whatever’, I think they would they would be willing to have a conversation.’

Ms Powell, who is also the Education Secretary, said the party was committed to the triple lock until the next election – but would not go any further.

She told Sky News: ‘We are committed to the triple lock. It’s in our manifesto. The triple lock has really delivered for pensioners, in this country, over the course of this Parliament.

‘I think we’re going to see (the) state pension rising by about £2,000-a-year significantly, and that’s really important, so pensioners watching your show today can know that their income is secure and will continue to rise over the course of this Parliament.

‘I don’t know what Andy’s going to say about that today, but I know that what he’s talking about is this big conversation about solving these big problems, but being really honest with people that they come at a cost.

‘They do come at a cost. You can’t just solve the social care crisis without having the big conversations about how you’re going to do this.’

Both the Tories and Reform urged Mr Burnham to target the benefits bill.

Tory chairman Kevin Hollinrake said: ‘If Andy Burnham wants to be honest with the British people, he must admit that Labour’s tax rises have crushed businesses, killed jobs and hammered family finances – all so Labour can give more handouts to Benefits Street.

‘Andy Burnham has the chance to show whether he’s got the backbone to bring the welfare bill down and stand up to his welfare–obsessed MPs.

‘Failure to do so will prove he’s just a people pleaser who can’t take decisions in the national interest, and that Labour really are the Welfare Party.’

Reform’s Treasury spokesman Robert Jenrick said: ‘It’s frankly outrageous that Burnham is considering scrapping the triple lock when we’re wasting tens of billions of pounds on nonsense. 

‘Instead he should slash the benefits bill, foreign aid and net zero subsidies. It’s only fair that we have the backs of those who have worked hard their entire lives.’