In his conference speech this week, Andy Burnham made a brave political decision to reform the triple lock on the state pension.  The reformed triple lock will increase the state pension by either inflation or 2.5% every year. If there is sustained growth in average wages over several years – enough to outpace the inflation and 2.5% locks – then the pension will rise to match that wage growth.

This ensures that every year the state pension will be protected, or increase, in real terms, and it retains its value relative to wages. This is a sensible reform; similar proposals have been put forward by the resolution foundation, and our own peer Tim Leunig, and there is widespread agreement from economists that the unreformed triple lock is financially unsustainable. Under the current triple lock, the state pension can grow faster than both wages and inflation, due to a ratcheting effect where correlated higher inflation and larger wage increases lag each other and lead to compounded state pension increases. And remember, every time the state pension bill increases, this money must come be found from increased taxes, spending cuts or (currently dismal) growth. The triple lock reform removes this ratchet by tracking average wage growth over many years, instead of an annual wage growth lock, saving an estimated £15 billion/year by 2039/40 (though this is hard to predict). This is a large sum of money in the medium and long term and will significantly ease the huge spending pressure the country is facing.

So it was disappointing to see an immediate condemnation of this policy from the party leadership – seemingly without considering the details or merits of what has been proposed. They seem to have jumped into opposition because of a (misguided) belief that the most politically popular option is to oppose any change to the triple lock, now and forever more. The polling around this announcement shows how wrong this assessment is (Lib Dem voters are the most supportive of the reform)!

Our deputy leader Daisy did an interview with Sky News setting out the party’s 3 main problems with the plan, 24 hours after the PM’s speech:

1) The reform doesn’t raise any money in the short term for urgent social care needs

2) It seems like cross party talks have been torpedoed

3) Triple lock “hasn’t done its job yet” in tackling pensioner poverty

Now points 1) & 2) are completely correct, and we should be pushing the government on their failure to fix immediate social care issues by kicking everything until after the next election. However, what 1) doesn’t acknowledge is that the triple lock reform does save a significant amount of money in the long term as set out above.

But point 3) is revealing. It implies that the triple lock is the tool through which we should continue to tackle pensioner poverty. However, this is wrong. The triple lock is a crude, expensive and badly targeted way to help poorer pensioners because increases in the state pension are paid to all pensioners – the vast majority of whom are not in poverty – and further harms intergenerational fairness through a transfer of wealth from the taxes of younger workers to increase payments to the wealthiest generation in this country. The poverty rate among pensioners today is lower than for working age adults and children. If we really want to help poorer pensioners, it would be much better, and more cost-effective, to give support directly to them, for example through increased pension credit.

Furthermore, point 3) begs an obvious question: at what level of state pension will it be “job done”? When will we get there (the triple lock increases are unpredictable)? How much will that cost? Why not just raise the state pension to that level now (and explain where the enormous additional tax burden will come from)?

Instead, the triple lock should not be seen as a tool to (massively) increase the state pension, but as a way to protect its value relative to inflation and wages – something Andy Burnham’s proposal achieves. Keeping the current triple lock, and allowing the state pension bill to rise faster than inflation, wages and the tax base that pays for it, is simply unsustainable.

We should embrace this moderate, sensible reform, for the good of our country’s finances, and turn our focus onto holding the government to account on the immediate social care crisis, making sure their warm words about Europe turn into a real plan for fixing our broken relationship and ensuring we get the fair voting system the country deserves.

* James Hill is a Lib Dem member (for 7 years) in Oxford East