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Andy Burnham<\/a> has been urged to ditch the state pension triple lock<\/a> and consider scrapping some VAT<\/a> exemptions to raise more for government<\/a> spending, an influential economic think tank has suggested.<\/p>\n Just days before the former Greater Manchester mayor takes over as prime minister<\/a>, the Organisation of Economic Co-operation and Development (OECD<\/a>)\u00a0urged the government to keep up momentum on policy reforms to help improve living standards and the performance of the economy.<\/p>\n One recommendation is to reform the pensions promise, which guarantees the UK\u2019s state pension rises each year by whichever is highest out of inflation, wage growth or 2.5 per cent.<\/p>\n It said the measure is \u201cunusually generous\u201d compared to other countries.<\/p>\n The Paris-based organisation said in a report published on Wednesday: \u201cThe triple lock indexation of state pensions puts upward pressure on public expenditure and adds significant fiscal risks by exposing public finances to supply shocks, thus requiring a timely reform that overcomes political economy constraints.<\/p>\n \u201cGiven political economy challenges and the existing commitment to the triple-lock guarantee over the current Parliament, the government\u2019s effort should focus on setting the ground for lasting reform.\u201d<\/p>\n This should go hand-in-hand with explaining how a new approach to state pension will be effective and fair to ensure reforms are publicly accepted, the OECD<\/a> said.<\/p>\n It echoes similar calls by the Office for Budget Responsibility (OBR) last week, which warned the triple lock is a \u201csubstantial pressure on public spending\u201d over the longer term.<\/p>\n It estimates the measure will have added about \u00a315.5 billion to state pension spending each year by 2029-30 \u2013 up from the \u00a35.2 billion a year that was originally costed.<\/p>\n Scrapping the triple lock has long been seen as an impossible move for politicians of any party, because pensioners are the UK’s most reliable voting bloc. <\/p>\n However, last month it was revealed that some of Mr Burnham\u2019s key advisers are opposed to the policy. <\/p>\n The MP for Makerfield, who will take over as prime minister next week, <\/a>has recruited a number of respected economists to his team as part of an attempt to reassure the markets, including former Treasury minister Lord O\u2019Neill, former Bank of England chief economist Andy Haldane and former OBR Chief Richard Hughes. <\/p>\n According to The Times, the advisers believe that scrapping the expensive triple lock, which is due to cost taxpayers billions, is a \u201cno brainer\u201d amid growing pressure on the public finances. <\/p>\n However, speaking at a launch event for the OECD\u2019s report, pensions minister Torsten Bell said: \u201cThe government\u2019s manifesto commitment is to the triple lock throughout this parliament, and that is going to happen.\u201d<\/p>\n cBut he said the government is focused on reforming the private pensions system to get more people saving for the future.<\/p>\n Meanwhile, the OECD said there is scope to review the current tax system and potentially eliminate some VAT<\/a> exemptions in order to raise more money for government spending<\/a>.<\/p>\n \u201cIf raising tax becomes a last-resort necessity\u201d, then \u201craising VAT<\/a> seems the most prudent option\u201d, the report read.<\/p>\n But further raising national insurance contributions should be avoided given recent hikes have already pushed up labour costs, according to the think tank.<\/p>\n Mr Bell said: \u201cRight now is a good time to reform the private pensions system, and that\u2019s exactly what we\u2019re doing.<\/p>\n \u201cIt\u2019s not a good time to raise VAT when you\u2019ve just been through a cost-of-living crisis and the Bank of England is trying to sustainably bring inflation to target.\u201d<\/p>\n![\"Pensions](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/07\/10a8ab1c1fbbd6384a764522a26921d5Y29udGVudHNlYXJjaGFwaSwxNzg0MjA2NzIy-2.81057745.jpg\")
Pensions minister Torsten Bell said the Government is focused on reforming the private pensions system (Jordan Pettitt\/PA)<\/p>\n