Thousands in Yorkshire facing poverty after biggest real-terms cut to pensions in decades, warns Jonathan Ashworth

Speaking during a recent visit to a memory cafe for dementia sufferers and their carers in Sheffield, Mr Ashworth called on local Tory MPs to put pressure on Chancellor Rishi Sunak to rethink the situation.

“Rishi Sunak and Boris Johnson broke their promise to pensioners on the triple lock,” Mr Ashworth said.

“We’ve now got the biggest real terms cut to the pension in 50 years. This is a staggering, severe, cut and when you think about 500,000 pensioners across Yorkshire that is going to cause huge damage.

“Pensioners are really going to struggle.”

The Government has suspended the earnings element of the pensions triple lock for 2022/23 - meaning pensions are increasing this month by 3.1 per cent; well below the rate of inflation which the Bank of England expects to hit 7.25 per cent this month.

Recent analysis by Telegraph Money and wealth manager Quilter said this represents the biggest real-terms fall in pensions since 1980 when inflation was 21.8 per cent and the pension increased by just 16.5 per cent.

While the state pension is rising by £5.55 a week this month, there will effectively be a real-terms cut of £7.45 per week - or £388 for the year.

The Government has said it “remains committed” to restoring the pensions triple lock for the rest of the Parliament, with this year’s measure due to a “statistical anomaly” relating to Covid putting earnings increases at eight per cent.

But with inflation now running close to that level, Mr Ashworth said he was concerned that another real-terms cut could come next year as well.

“The reason the pension and Universal Credit is being cut in real terms is because Rishi Sunak and Boris Johnson have pegged it to where inflation was last September. What you could do is say, inflation is going to be higher this year so why don’t we bring forward next year’s increase now? The fact Rishi Sunak didn’t do that is bewildering.

“It is either callousness, incompetence or it may well be because he is not going to honour to raise the pension and Universal Credit in line with inflation next year.

“But you could bring some of that forward to cushion people as they have to navigate these big storms that are coming.”

Mr Ashworth highlighted recent research from the Resolution Foundation following the Spring Statement which has suggested 1.3 million Britons, including 500,000 children, are set to fall below the poverty line in the next 12 months - thanks in part to a lack of targeted support for low-income families.

“Many pensioners are going to be pushed into poverty - nationwide, 500,000 children will be pushed into poverty - many in Yorkshire.

“I don’t think that is a price worth paying. Rishi Sunak is a Yorkshire MP and he apparently does think it is a price worth paying.

“I think he’s wrong and he should have done something to support pensioners, families and children in Yorkshire.”

He criticised the Chancellor’s announcement that income tax will be cut by one pence in the pound in 2024.

“He is trying to say people can take this pain now - children and pensioners in Yorkshire can go into poverty - in order to give him the room to cut income tax in two years’ time. That income tax cut nowhere near offsets the very big punishing tax rises he has put in place.”

Mr Ashworth likened the Government’s decision on the triple lock to Margaret Thatcher cutting the link between pensions and earning rises in 1980.

“People remember Mrs Thatcher breaking the earnings link with pensions back in the 1980s.

“It took years and years for pensioners to be lifted out of poverty because of that decision.

“This breaking of the triple lock is as devastating and as big a betrayal as when Margeret Thatcher broke the earnings link in the early 1980s. Pensioners know what is coming.

“Many people are really worried and scared about how they are going to survive this next 12 months.”

He called on Tory MPs on Yorkshire to “stand up for pensioners” with the Chancellor over the issue.

“If you are a Tory MP in Yorkshire, I think he has rather insulted you because he is saying that all you care about is a penny off income tax and you don’t care about the desperate poverty we are going to see in your constituency.

“I think Conservative MPs should force Rishi Sunak to change course.”

Government 'being fair to younger taxpayers'

The Government has said the decision to temporarily suspend the earnings element of the Triple Lock was taken following careful consideration.

A spokesperson said: “In taking this decision, the government carefully considered the fairest approach for both pensioners and younger taxpayers, many of whom have been hardest hit by the financial impacts of the pandemic.

“In addition, last year, we delivered primary legislation to increase State Pensions by 2.5 per cent, when earnings fell and price inflation increased by half a percentage point. If we hadn’t taken this action, State Pensions would have been frozen.

“This is a one-year response to exceptional circumstances and the government will return the earnings element of the Triple Lock next year.”

Support The Yorkshire Post and become a subscriber today. Your subscription will help us to continue to bring quality news to the people of Yorkshire. In return, you'll see fewer ads on site, get free access to our app and receive exclusive members-only offers. Click here to subscribe.