Kemi Badenoch has pledged to retain the state pension triple lock indefinitely, setting up a clear political divide with Labour ahead of the next general election.
The Conservative leader has ruled out following Andy Burnham by abandoning the mechanism, which has helped protect the value of the basic state pension for years.
Asked by the BBC whether the Conservatives would preserve the policy “in perpetuity”, she said: “That is what we have promised. There is nothing that has happened that has made me change my mind.”
Her comments came after new analysis indicated that Andy Burnham’s plan to scrap the current triple lock could leave some workers up to £38,000 worse off during retirement.
The Prime Minister announced last week that Labour intends to end the existing system in 2030. Legislation could be introduced as early as next year, despite the party’s manifesto pledge to maintain the triple lock.
Mr Burnham has argued that replacing the mechanism could help fund his proposal for an NHS-style National Care Service for social care. Official estimates suggest the change could save £15 billion a year by 2040, although that money would otherwise have been paid to pensioners.
However, Mrs Badenoch said the Prime Minister had not explained how relatively modest savings in the early years of the next decade would finance a new social care system he wants to begin introducing in 2030.
During a series of interviews marking the opening of the Conservative Party conference in Birmingham, Mrs Badenoch also indicated that she was considering plans to abolish inheritance tax, calling the levy “morally wrong”.
She also announced proposals to remove the £100,000 earnings threshold for access to free childcare. At present, a family loses its entire entitlement if one parent earns more than that amount, meaning some workers can be thousands of pounds worse off after accepting a promotion or pay rise.
Kemi Badenoch and her husband Hamish arrive at the Conservative Party conference at Symphony Hall in Birmingham.
Several senior Conservatives, including former chancellor Sir Jeremy Hunt and shadow communities secretary Katie Lam, have raised concerns about whether the triple lock can be sustained over the long term.
Mrs Badenoch, however, said welfare reform should focus on helping more people move into work.
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“What is going wrong in our economy is not lots of elderly people earning £10,000 or £12,000 a year on the state pension. It is the huge number of people who can work who don’t work,” she said.
“Going after the triple lock is simply moving money around. I am talking about growing the economy, getting people into work, making us more productive and restoring the link between savings and growth. This argument about the triple lock is just a line on the budget ledger; there are more fundamental problems that need to be tackled.”
“The fact is, the triple lock and pensions are things that people have contributed to. Conservatives believe that if you have contributed, you deserve to receive your state pension. What we do not want to see is people targeting the elderly, vulnerable and disabled while leaving untouched the extremely large cohort of people who can work but are not working.”
Her stance establishes a sharp dividing line with Labour ahead of an election that many senior Conservatives believe could be held as soon as next year.
The announcement also followed analysis by the Sunday Times suggesting that younger workers would bear the greatest financial impact from Labour’s proposed departure from the current triple lock.
According to the report, Generation X workers born between 1965 and 1980 could be an average of £16,800 to £23,170 worse off over a 20-year retirement than they would have been under the existing arrangements.
Millennials born between 1981 and 1996 could face an average loss of £28,140, while Generation Z workers, born between 1997 and 2012, could be £38,400 worse off.
Introduced in 2011, the triple lock guarantees that the state pension rises by whichever is highest among inflation, average earnings growth or 2.5 per cent.
In the new plan, the direct uprating with earnings will be lost, leaving the pension rising by either inflation or 2.5 per cent. Ministers have said a separate mechanism will ensure the pension does not fall below 30 per cent of average earnings over time.
The change means that the state pension will increase more slowly over time, leaving younger workers hit hardest.
Ministers insist older people will see the value of their pensions protected by the ‘adjusted’ triple lock, as well as benefiting from free personal care if they need social care in later life.