Will Burnham scrap the most expensive promise in politics?

Summary

Podcast Summary: The Story — "Will Burnham scrap the most expensive promise in politics?"

Host: Luke Jones (The Times)
Guest: Jack Barnett (Economics Correspondent, The Times)
Original Release Date: June 29, 2026

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Episode Overview

This episode of The Story delves into the economic crossroads facing a soon-to-be Burnham government, particularly whether Andy Burnham—the likely next Prime Minister—will tackle or scrap the so-called "triple lock" on state pensions. Host Luke Jones and guest Jack Barnett discuss Burnham’s economic philosophy ("Manchesterism"), the delicate politics of welfare reform, potential cabinet appointments, and the mounting fiscal pressures confronting the incoming administration. The debate captures both the urgency for short-term solutions and the need for long-term investment in the UK’s future.

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Key Themes and Discussion Points

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1. Burnham’s Economic Inheritance and Manchesterism

[02:07–05:25]

• Burnham as the Heir Apparent:
  Burnham, moving closer to Downing Street, faces pressure to clarify his economic strategy and cabinet, especially who will become Chancellor.

• Manchesterism Defined:

  • It's difficult even for policy wonks to precisely define "Manchesterism," but its best example is the re-nationalisation (state control, not ownership) of Manchester’s bus network.
  • Emphasizes long-termism, productivity, and reforming Whitehall towards devolution and hands-off central micromanagement.

  Quote:
  "How do we move this country away from, you know, the short termism of Westminster and the battles that the Whitehall departments have to a different approach which is about a more productive state, a more growth enabling state?"
  — Jack Barnett [02:13]

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2. Market Confidence and Cabinet Speculation

[05:25–12:22]

• Bond Market Sentiment:

  • Despite fears, the bond market has remained stable following political turmoil and the expectation that Rachel Reeves will not remain Chancellor.
  • Lower UK bond yields signal market comfort with a quick leadership succession.

  Quote:
  "The market really has taken it in its stride since the local elections at the beginning of May."
  — Jack Barnett [06:04]

• Cabinet and Advisory Team:

  • Burnham’s economic team includes respected figures like Richard Hughes (ex-OBR), Andy Haldane (ex-BoE Chief Economist), and Lord Jim O’Neill (ex-Goldman Sachs).
  • This signals a desire for fiscal credibility.

• Will Ed Miliband Be Chancellor?

  • Some fear an Ed Miliband appointment could unsettle business, given his aggressive approach to net zero and green investment.
  • The bond market’s main concern is credible anti-inflationary policy, not simply borrowing per se.

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3. The Triple Lock: Origins, Costs, and Prospects

[17:46–24:33]

• Triple Lock Explained:

  • Introduced in 2010, it guarantees the state pension rises annually by the highest of: inflation, earnings growth, or 2.5%.

  Quote:
  "So the triple lock was brought in in 2010... the state pension increases by whichever is highest out of earnings, inflation and 2.5% every year."
  — Jack Barnett [18:17]

• Why It’s Contentious:

  • Increasing costs: Now pensions consume about 55% of all welfare spending—more than ever.
  • The mechanism was designed for lower-inflation times; recent spikes (2019–2024) exposed its downsides.

• Pension Impact:

  • The triple lock has sharply reduced pensioner poverty, proving “absolutely great for them” [20:56], but questions remain:
    • Has the pendulum swung too far given new fiscal pressures?
    • Would scaling it back relieve stresses elsewhere (e.g., NHS, youth unemployment)?

  Quote:
  "If your main aim was to drive down pensioner poverty and increase pensioner welfare, triple lock's been brilliant. It's been absolutely great for them. But at what point do you say there are more pressing issues?"
  — Jack Barnett [20:56]

• Political Risks:

  • Tinkering with the triple lock risks angering a large, active voting bloc; yet, according to Barnett, even some pensioners see the need to shift priorities for the younger generations.

  Quote:
  "There is this consensus forming, not just amongst think tankers, but quite a lot of pensioners as well, are also sort of coming around to the idea that we've had some pretty good increases in the pension over the last 15 years."
  — Jack Barnett [23:35]

• How to Reform:

  • Proposals include switching to a “double lock” (index to earnings alone), saving up to £10bn since 2012 and much more over future decades.
  • Politically, even minor trims will be contentious.

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4. What Other Fiscal Levers Are There?

[25:09–28:02]

• Short-Term Fixes and Quick Wins:

  • Voters expect immediate action on the cost of living—energy and food price relief could score early victories.
  • Possible interventions: Adjusting the energy price cap more frequently; encouraging faster pass-through of oil price falls to petrol prices.

• Long-Term Vision:

  • Burnham (if PM) is expected to focus on transformative, structural investment—energy infrastructure, utility reform, skills, and education—to make the UK "less susceptible to inflation."

  Quote:
  "I think what Burnham is trying to do is less so these consumery policy type things... he will look at this as big picture, long term structural changes to the economy."
  — Jack Barnett [26:33]

• Challenge:

  • Budget constraints and policy lags mean voters might not feel benefits for years, clashing with “impatient” political climate and the short electoral cycle.

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5. Notable Closing Thoughts

[28:02–30:28]

• Economist vs. Politician Timescales:

  • Economists crave long-term investment (“Britain has not invested in itself [since 2008]”), but politicians are judged on their ability to deliver quick results—especially in a cost of living crisis.

  Quote:
  "Politicians never have the luxury of the 10, 15, 20 year view... because they know voters want quick results, particularly in this environment."
  — Jack Barnett [29:44]

• Final Reflection:

  • Burnham’s balancing act: deliver “consumer wins” swiftly to keep public faith, while setting the stage for overdue, larger reforms.

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Memorable Quotes

| Time | Quote & Attribution | |--------------|---------------------| | 02:13 | “How do we move this country away from, you know, the short termism of Westminster... to a more productive state, a more growth enabling state?”<br> — Jack Barnett | | 06:04 | “The market really has taken it in its stride since the local elections at the beginning of May.”<br> — Jack Barnett | | 09:45 | “That trend of increasing public investment will probably continue underneath Burnham.”<br> — Jack Barnett | | 20:56 | “If your main aim was to drive down pensioner poverty and increase pensioner welfare, triple lock's been brilliant. It's been absolutely great for them. But at what point... do you say there are more pressing issues?”<br> — Jack Barnett | | 23:35 | “There is this consensus forming, not just amongst wonks and think tankers... even some pensioners... we've had some pretty good increases in the pension over the last 15 years.”<br> — Jack Barnett | | 26:33 | “What Burnham is trying to do is less so these consumery policy type things... he will look at this as big picture, long term structural changes to the economy.”<br> — Jack Barnett | | 29:44 | “Politicians never have the luxury of the 10, 15, 20 year view... because they know voters want quick results, particularly in this environment.”<br> — Jack Barnett |

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Important Timestamps

• [02:07] — Burnham’s devolution plan and Manchesterism defined
• [05:25] — Market reaction to pending government changes
• [09:45] — Burnham’s likely approach to public investment and utilities
• [13:40] — Ed Miliband’s potential as Chancellor and bond market fears
• [17:46] — The triple lock: what it is and why it’s expensive
• [20:56] — Has the triple lock succeeded—should it be scaled back?
• [23:35] — Political perils of pension reform
• [25:49] — Other options for fiscal reform beyond the triple lock
• [26:33] — Burnham expected to aim for long-term, structural economics
• [28:02–30:28] — Long-term vs. short-term policy, fiscal constraint

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Conclusion

This episode offers a rich, jargon-free exploration of the UK’s economic crossroads as Burnham stands poised to become Prime Minister. It emphasizes the balancing act between political necessity for quick wins and the deeper economic need for patient, structural transformation.

Listeners are left with a clear impression that while the triple lock on pensions is under more scrutiny and pressure than ever, any attempt to reform it—no matter how rational economically—will be a political minefield. Meanwhile, the broader Burnham economic vision awaits clearer definition but is likely to center on long-term public investment and responsible fiscal stewardship.

Transcript

[Hannah Previtt]

Hannah Previtt here from the Business podcast. Join me for a special episode with PwC UK's Marco Amitrano and WPP's Michael Froelish, recorded at the Greater Together Conference in Los Angeles, California. We'll discuss how partnerships between the US and the UK can drive economic growth and shape the future of transatlantic collaboration. Listen wherever you get your podcasts.

[Jack Barnett]

Every morning throughout the World cup, the Game Football podcast from the Times and Sunday Times will bring you your essential daily brief.

[Luke Jones]

We'll hear from our reporters inside the

[Jack Barnett]

England and Scotland camps bringing you the big news. First, we've got reporters covering the best of the rest and following all the biggest stories from FIFA banning water to Donald Trump coming on as a sub against Paraguay. Okay, maybe not the last bit, but who knows? So join the game for the biggest show on Earth. Find the game wherever you get your podcasts.

[Luke Jones]

From the Times and the Sunday Times. This is the story. I'm Luke Jones. Andy Burnham is back in London and edging closer and closer to moving into Downing Street. One of the current residents is Keane.

[Jack Barnett]

I'm backing Andy Burnham to be our next Prime Minister. I've known andy for, well, 16, 17 years now. He's a good friend of mine.

[Luke Jones]

I'm not sure it'll spare her eviction though. As this one man leadership election rumbles on, there is non stop talk of who will replace Rachel Reeves and what Andy Burnham will actually do with our sluggish economy, what he'll do with Rachel Reeves own policies. Remind us what the fiscal rules are.

[Jack Barnett]

I'm not going to go through a discussion like an exam on the fiscal rules. I know what the fiscal rules are. We will set out a plan that is within those rules so that we keep the discipline. Nothing I've said at any point in this campaign or before this campaign has been about ignoring the bond markets.

[Luke Jones]

Andy Burnham has what he calls a generational devolution plan. Seems like you really can't take the boy out of Manchester.

[Jack Barnett]

How do we move this country away from, you know, the short termism of Westminster and the battles that the Whitehall departments have to a different approach which is about a more productive state, a more growth enabling state. And to me this implies quite significant culture change within Whitehall and particularly Whitehall finally fully embracing the devolution agenda.

[Luke Jones]

As Andy Burnham takes to the stage this week to add a bit more flesh to those thin policy bones, we will look at what he could do and what many are pushing him to do, like killing the triple lock on pensions.

[Jack Barnett]

If Andy indicated credibly he was going to deal with welfare reform taking on the triple lock, which I know Andy has said so far that he wouldn't, then the markets would embrace it.

[Luke Jones]

The story today, Burnham versus the economy.

[Jack Barnett]

I'm Jack Barnett, economics correspondent for the Times for nearly three years.

[Luke Jones]

A lot of schmoozing in your job. Did you do that a lot or was it just sort of Bloomberg terminals

[Jack Barnett]

And a little bit. There is a bit of smoothing obviously in the city. I don't think it's as much smoothing in the city as there was 20 years ago when people were going for lunch for about six hours and sinking about six pints.

[Luke Jones]

But you missed the golden age.

[Jack Barnett]

I mean, I did miss the golden age, sadly. But I have been today over in Westminster speaking to someone who's sort of Burnham or Jake kind of around the Burnham camp. And then, you know, I think there is a lot of optimism around those people. It's obviously not just him. I've spoken to a couple people close to Miliband's people, a couple of people that I know around in Manchester who've worked in local forces as well. Speaking to some of them, there is a lot of optimism. You know, they sort of think that this is, you know, he could be their guy to push forward this long term agenda and this sort of break from the past that the British economy has been having for some time. What he's going to go back to and what's going to determine a lot of the policy outlook is who he chooses as Chancellor. That is going to be crucial for all of this.

[Luke Jones]

And I guess as well now trying to plug into what Team Burnham and himself might do when he descends before we get into any details, I mean, sort of how easy or difficult has that been?

[Jack Barnett]

It's tough, I think, defining what Manchesterism is, which is obviously the sort of name given to this Burnham type philosophy of what nearly 10 years of his mayorship in Manchester. It's difficult, I think even the sort of wonks in the, in the, in Westminster, the think tanks even struggling to sort of really pen down exactly what the economic strategy is. But there are quite obvious examples of, you know, the direction he might go and obviously the B network in Manchester, the bus network which he's brought back into state control, is quite a clear example of the direction he wants to go. But you know, it will depend on when he puts the flesh on the bones in the coming weeks. Obviously when he does probably almost inevitably become Prime Minister, I think that's when we'll get the real sort of meat there and we'll understand where he wants to go.

[Luke Jones]

We've long been told that you can't remove Rachel Rees as Chancellor because the bond market will have a heart attack. We had a slight flavour of that when she appeared last summer on the benches behind Kirstar and the House of Commons, eyes heavy with tears. Have you sensed any nervousness now? The sort of assumption is that she won't make it in a Burnham government at that level?

[Jack Barnett]

Yeah. I mean, obviously the sort of working assumption in the City and also in Westminster is that she's not going to last long at all underneath a Burnham premiership. I think the bond market, I mean, if you just look at what's been happening in terms of the yields on UK bonds this year, they've taken it in their stride.

[Luke Jones]

And these are the people that hold and trade government debt.

[Jack Barnett]

That's right, that's correct. Obviously these are the people that we do need to go to when we want to go and invest in things like social housing, which Andy Burnham's very keen on. But the market really has taken it in its stride since the local elections at the beginning of May. The Yield on the 10 year UK bond, which is sort of the benchmark of our borrowing cost, that's down quite sharply. It's down, I think around about 0.1 percentage points. When you compare that to German yields, which is the sort of European benchmark, and also American bond yields, we've had quite a big decline over the last month. Now, some people have said that is tied to the fact that after Sir Keir Starmer announced his resignation as Prime Minister, Wedge Streeting very quickly quashed the reports that he was going to lead, challenged Burnham for a leadership. So that sort of took away the risk that we were going to get a whole summer of hustings and burden tabling, policies that may not particularly go down in the market. Same with wage street. And so I think markets responded quite well. So the fact that it looks as if we're going to get a coronation, it's going to be done pretty quickly by the. By the middle of July. I think potentially what has been the bigger driver for the drop in yield,

[Luke Jones]

and we should say a drop in

[Jack Barnett]

yields is good, a drop in yield is very good. I mean, that would be welcomed by everybody. It makes the Government's spending plans a lot more palatable. I think one of the. I mean, they're both working in tandem, but they certainly. Another one of the drivers is that we are quite plainly obviously getting closer to a lasting ceasefire in the middle east, there's obviously the biggest memorandum of understanding that's just about holding. A lot more ships have been passing through the Strait of Hormuz over the last week or so. And the oil price, if you just take Brent crude, which is obviously the international benchmark, the oil price is actually below levels as it was before the war. Now, that pushes down inflation fears, reduces the chance of central banks raising interest rates. The bond markets reacted to that.

[Luke Jones]

Yet to make it to the pumps,

[Jack Barnett]

but yet to make it to the pumps. Otherwise, a lot of the time, the petrol suppliers are very quick to raise rates but not drop them.

[Luke Jones]

You mentioned this theory of Manchesterism, which has been applied to Andy Burnham's thinking, and you mentioned part of that is what he's done with the bus network and how even some of the wonks are struggling with this. You're the only one in this room at the moment, so how are you grappling with it? How would you explain it to somebody?

[Jack Barnett]

First and foremost, you've got to compare it to what we've had over the last two years in terms of an economic strategy underneath the. To Keir Starmer. Now, I think from the economic side, forget the politics, lots of people were saying that there just was never this overarching strategy, a narrative, no way of being able to explain it to the country what they're specifically trying to do. It was very much a continuation of what had come probably since the 2008 financial crisis. I think there were two prongs by which Rachel Reeves and Starmer tried to sort of mold the economy in their image. The first one was. Was. And if you look at this, over the course of the two budgets that Rachel Reeves did, if you forget some of the spring statements, one of the main pillars of their strategy was to really raise public investment spending. There was a really, really big drive to do that. She tweaked some of the fiscal rules to allow the government to borrow more to invest in the economy. I think it's something around about it's getting close to £100 billion worth of public investments, but an increase relative to previous brands. So that was definitely one of the big pillars of the strategy. And I think Burnham, given the B network, which is launched in Manchester, he's obviously talking a lot about bringing some of public utilities back into state control. Maybe not state ownership, but state control. That will almost certainly that trend of increasing public investment will probably continue underneath Burnham.

[Luke Jones]

And just explain that qualifier there, because what's the difference necessarily between state ownership and state control?

[Jack Barnett]

So state control is Basically the end user to the consumer, the government is able to basically have more control over the price which is actually given to that consumer. At the end of it, state ownership is you just own all the assets of that company and stuff. Some would argue you kind of get to the same point anyway, if you own all the assets that say Thames Water, you own Thames Water, or you can then set the price of what a Thames Water type government company would be able to charge consumers. So I think it's basically just making sure that the company which operates the service charges a fair price to consumers and also provides services which not necessarily private companies might do. So the B network is a very good example of that, where it's introduced new routes in Manchester and it's obviously cap prices that are much lower levels to what they were before. And it's a very good example of where Bernin might potentially go in that sort of corridor of uncertainty between does the government just nationalize large parts of the economy or does it get more involved in the market, introduce a bit more influence in the market to then raise competition itself in the market?

[Luke Jones]

And what can we glean from people who are already announced as being part of Burnham's either team or their advisors about what kind of a direction other parts he might be going?

[Jack Barnett]

I think he, he is certainly trying to bat away these allegations that he, you know, he's going to be fiscally loose, he's going to borrow loads of money. It's going to cause absolute havoc in the, in the bond market with some of the reports they've got of people who are reviving behind closed doors. So you've got Richard Hughes, who was obviously the previous head of the office with budget responsibility. He's been involved in some of the policy work there. Andy Haldane, former chief economist at the bank of England for a long time, very well respected in the City. He's also now at the British Chambers of Commerce. And Lord Jim o', Neill, former chief economist at Gullman Sachs. So some pretty heavy hitters who have been around both Westminster and the City for a long period of time. So I think you can, what he's trying to do there is really put forward a credible package towards, you know, some people who might say, well, he might be taking advice of some unconventional people. And I think part of the reasoning behind that is he probably wants to assure the bond markets because they don't want to get too jittery because at the moment it's still, you know, yields have come down in the last couple of Weeks. Our borrowing costs are much higher than they were compared to three or four years ago.

[Luke Jones]

That could be if you listen to some minister's briefing to our political colleagues on the paper, all thrown off kilter if Ed Miliband is made Chancellor, lots of them briefing saying, oh, he's going to take things in a. He's so not pro business that all what you said there would just be undone. Do you think that's the case?

[Jack Barnett]

Potentially. I mean, what is difficult to say is once you, when you don't know the policy outlook, it's very, very hard to then judge it. So all you can do is obviously look at previous work that ministers have done. So, you know, Miliban has obviously been involved in the energy strategy for the entirety of Starman's government. He's one of the very few cabinet ministers. You know, he's been there the entire time. He's really well across his brief. I mean, he doesn't know it inside out. I think some people would say he might be a bit too hard nosed on the net zero green transition stuff.

[Jake Grez]

Clean energy offers our best chance to

[Jack Barnett]

escape the high energy bills that have caused the cost of living crisis. We're at the mercy of the petrostates and dictators and the only way out of it is our mission for clean power by 2030. Some people I certainly know who are close to Burnham have, have expressed some reservations about how quickly they're trying to go on that stuff.

[Luke Jones]

He was a person who originally wanted, what was it, 28 billion pounds every year spent in green infrastructure spending.

[Jack Barnett]

Yes, he was, to be fair. I mean, underneath Rachel Reeves with this new public investment job, they are kind of sort of at that figure now and might not necessarily going all into green investment, but they have, I mean, like I said, they have been putting a lot of money into public investment over the last couple of years. But I think in terms of how would the bond market react to an Ed Miliband chancellorship? You know, what the bond market is basically concerned about is inflation. That's the only thing that the bond market really cares about, because when there's high inflation, it erodes the returns they get from holding that bond. It also means if we have high inflation, it makes it more like the bank of England is going to raise interest rates. Bond market reacts to that by pushing up yields. Underneath an Ed Billaban chancellorship, what would we like to get? Potentially more borrowing, maybe a bit more government spending. But there is a clear strategy there to tackle some of the underlying factors in the economy which make us really susceptible to inflation, one of which is our energy structure. We are really exposed to the price of imported natural gas that's been the main driver of inflation. If Miliband can put forward a credible plan to wean us off those structurally deficient parts of the economy, that is the energy system which makes inflation higher. In the uk, the bond market might be absolutely fine with that. But I speak to bond traders a lot and what they always say to me is that we don't mind if the government borrows. We're absolutely fine with that. It's just as long as it's credible and we know it's going to push up growth and we know it's going to tackle inflationary problems. And if Miliband can do that underneath his chanceship or west street, he can do that, the bond market will be fine with it.

[Luke Jones]

Well, the there are two things they'll have to do then they might have to borrow more, but also they might have to cut spending in certain parts. And there is one sort of policy idea floating around, as it has for a while, which has got people talking. Mike Stoke Generational War but we will see or discuss that in a moment.

[Hannah Previtt]

Hannah Previt here from the Business podcast. Join me for a special episode with PwC UK's Marco Amitrano and WPP's Michael Froelish, recorded at the Greater Together Conference in Los Angeles, California. We'll discuss how partnerships between the US and the UK can drive economic growth and shape the future of transatlantic collaboration. Listen wherever you get your podcasts.

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[Luke Jones]

Jack, we're talking about what might be in all of our future as Andy Burnham becomes Prime Minister, particularly on the economic front. You were just explaining some of what could be his approach to things when he finally takes office, if that obviously does happen, which it seems very likely will in terms of hard policies. We keep hearing, or I keep hearing people say, well, you should scrap this triple lock. If you're after cash down the side of the sofa and you're saying already that you're not going to raise income tax, you're not going to raise VAS and all the rest of it, then this is one of the places you can go. What is the triple lock, first of all? And why is it so expensive?

[Jack Barnett]

So the triple lock was brought in in 2010 underneath George Osborne and David Cameron during their Conservative government. Now pensioners can say with confidence

[Jake Grez]

they

[Jack Barnett]

will also be protected by our new triple law, which will guarantee each and every year a rise in the basic state pension in line with earnings prices, or a two and a half percent increase, whichever is the greater. The provision that we got underneath estate pension at the time was relatively quite bad compared to our OECD sort of rich country peers. So it's brought in to address that problem. Basically it means the state pension increases by whichever is highest out of earnings, inflation and 2.5% every year. You know, over the last couple of years inflation has been really high, particularly after Russia's invasion in Ukraine, I think, you know, inflation was 11.1% in October 2020, as high as 40 years. So basically the policies is designed to protect pension living standards. So, you know, when you've got an increase of prices, your living standards go down if your income doesn't keep pace of that. Obviously if pensions are getting an 11% increase in their pension, when inflation is 11%, they should be fine. What we've had over the last couple of years, which wasn't factored into when the policy was made in 20, 2010. Is that what We've had a really quite sharp return in inflation the last five years. I think prices compared to 2021 are up around. I think it's nearly a third, which is pretty sharp. And you can obviously see why people are constantly talking about the cost of living, because that has not happened for a long time, probably since the 1980s. So it was there to address existing lack of resources in pension provision, but it wasn't designed at a time when inflation was a real problem. So, you know, I think. I mean, Burnham said it before, he really wants to look at it. Lots of people in the City and lots of people in Westminster in think tanks have kind. There's this consensus kind of forming around the fact that they don't think it's actually a very good policy anymore, just

[Luke Jones]

because it's just too expensive.

[Jack Barnett]

It is expensive. It's very expensive. I mean, if you look at all government welfare spending, so every single benefit that the government gives out to young people, to unemployed people, to old people, I think pensions get about 55% of all that in total. And that has gone up a lot since the introduction of the triple lock. So, Stephanie, an area which, I mean, Burnham said he's going to look at it already, it's definitely an area which they can potentially get some money out of as well.

[Luke Jones]

And has it made pensioners better off? So, actually, if you were to sort of try and nibble away at this policy, you could make an argument that, well, you're already sitting on more cash than you otherwise would be.

[Jack Barnett]

Yeah, I mean, the pensioners are undoubtedly better off than where they were when it was first introduced. I mean, our pensioner poverty rate has gone down quite a bit since we introduced, and obviously that means the policy has been a success. I mean, if your main aim was to drive down pensioner poverty and increase pensioner welfare, triple lock's been brilliant. It's been absolutely great for them. But I suppose the main criticism that economists and people will say is that at what point do you get to. When you say, okay, we've addressed that issue now there are more pressing issues that we need to dedicate our resources to, one of which is fence spending. NHS is consistently always hoovering up money and we've got a really big problem with youthful unemployment in this country right now, which potentially government resources may be better spent there.

[Luke Jones]

But it's not like you're ever going to claw back this money or massively cut it. It's just sort of about trimming the rate at which it grows, surely. So what would be if you were to scrap the triple lock, as they say, what would that actually and how much would you actually save?

[Jack Barnett]

So there's been a couple of proposals from a few fintechs, one of which from the Resolution foundation, where they basically said what you can do, you can sort of smooth the edges of how much the state pension increase is underneath every single year. What they're basically saying is that just tie it to earnings every single year, get rid of the sort of inflation element, just keep it to earnings. That means that when the rest of the country's average earnings are increasing at X percent, the pension is not left behind. Because the way we measure poverty in this country is how much your income is relative to the national average. So if you just increase it in line with earnings, pensioner poverty rates should broadly stay similar. That will save you a bit. I think the Resolution foundation estimated that if you provided it underneath that mechanism since 2012, up until now, it would have saved, I think it's about £10 billion. So that's quite, not to be sniffed at all, but we are looking at some quite substantial increases over the coming years when the OBR's forecast that state pension spending is going to go up tens of billions of pounds underneath the current mechanism. So pensioners have had a pretty good deal of it in the last 15 years.

[Luke Jones]

There is, we're saying that as two very young men, though that's very true, because they do. If you try and if they're ever talking about changing pensions or if you're talking about lots of other areas of government policy which affect pensioners, there is always quite a sharp backlash. And even particularly on that point you said there about why not just tie it to earnings? People defending the triple lock would always say, well, if you're earnings aren't, you know, going fabulously well as a worker, you can choose to work more, whereas if you're a pensioner, you can't necessarily do that to top up. So you'd still have a fight, whatever you did. It's politically tricky area.

[Jack Barnett]

Yeah, of course it is. I mean, obviously pensions are a huge, you know, we shouldn't try to reduce people to sort of voting blocks, but they are big, they are, they are a big boating block. And obviously, you know, if they're going to look to recalibrate how the triple op operates, it's obviously going to annoy a lot of people. But I think there is this consensus forming, not just amongst wonks and think tankers, I think quite a lot of pensioners as well, are also sort of coming around to the idea that we've had some pretty good increases in the pension over the last 15 years. And there are probably other areas which is becoming more pressing in terms of the government agenda. I've obviously mentioned defence spending there, but

[Luke Jones]

also you do sometimes hear in focus groups and there's reporting where you hear people aren't necessarily voting just for explicitly selfish reasons as it pertains to their own balance sheet. Pensioners will have grandchildren who they see struggling to rent or get on the housing ladder, or parents see that about their children. So I think they really can see the wider picture beyond just their own pocket.

[Jack Barnett]

Yeah, of course. And also, you know, obviously mentioned youth unemployment. Nearly one in five people in this country who are beneath the ages of 16 to 24, unemployed. You know, if. If we can save a bit of money at the top end of the age distribution and then reinvest that into the bottom end, that is a very good investment. There's very few things in the economy that you can invest in and get a better return on than investing in young people, getting them into work, creating educational pathways, boosting skills, particularly a time when you've got artificial intelligence, completely recalibrating the labor market. I think that is a pretty good sell for pensioners.

[Luke Jones]

That is just one area that Andy Burnham might tinker with and it could, you know, as you said there, raise a bit of money. But as you know, as you were just comparing over the lifetime of the policy, it might just be in the sort of 10 billion kind of mark. How many levers are there, thinking more broadly, that Andy Burnham can actually pull on, or his chancellor could pull on to actually help shift spending around in a meaningful way and put the money into, well, you know, recording it during a heat wave, where people are talking about the lack of infrastructure, spending going into schools and their ability to have aircon or the defence investment plan that you mentioned there. I mean, thinking about everything he's already ruled out, are there many?

[Jack Barnett]

You know, it is tough. I mean, from my perspective, I think what he needs immediately, even before the ultimate budget as well, he needs very quick policy wins, particularly on the cost of living. I don't think he's going to have a lot of time to keep the momentum when he first gets in, because people will be looking at him as a real sort of breakaway from the last two years of Diva U turns. Some quite stingy policies directed towards traditional label voting blocks, I think immediate things that you could. I mean, if you look at what has driven the cost of living in the last couple years? It's been energy primarily, it's been food. They're the two things now eat out to help out. Government vouchers. I mean that was a disaster. I think there's a couple of things, you know, he could do on energy bills. He could potentially look at how off gem, how frequently off GEM changes the price cap. There's been a big reduction in oil prices obviously as I mentioned earlier on how quickly that feeds into the price cap. He could do that. He put pressure on petrol retailers to drop their petrol prices quicker in order to reflect the wholesale oil market. But obviously a lot of this stuff is going to be the sort of big package, the meaty policies, they're not going to come until the autumn budget. We talk about what is the big direction of Manchester, what is the big picture of this government. I think what Burnham is trying to do is less so these consumery policy type things where they tweak the fuel duty or they give people a couple hundred pounds to spend on some air conditioners. I think he will look at this is big picture long term structural trains to change the economy so it's less susceptible to inflation. And I think that means things of investing in the energy infrastructure via the state, potentially looking at state ownership or state control over public utilities. Obviously Thames Water is a prime example of that. I think that's the direction that we're, that we're going in. But we're not really going to get the actual cost, what they're going to do, where the investments are going to go until that autumn budget. And then he's got this vacuum period of about. What is it now, four or five months until we get to that budget.

[Luke Jones]

But just finally we've also then got an enormous lag to the point at which anyone might feel the benefit of any of those policies if it works. And we'll already talking now about how quickly political journalists and political news consumers would like to see results that are impatient and onto the next thing. Is that the same in your world? Do you think people are less willing to go along with a plan that actually, especially if you're talking about energy, might take five, might take 10 years to bear fruit?

[Jack Barnett]

I mean in the economics world there is a much longer term view compared to the. I mean there's this public choice variance, this paradox whereby why politicians are not. They have no incentive to think about the long term because obviously operate in five year election cycles, right? So that's why we get industrial strategies seemingly every Six months and then nothing actually comes to fruition. You know, in economics they will look at the long term. So I sort of casting my mind back three years ago when we were getting towards the dregs of the Tory government and every single economist in my inbox from the Institute of Fiscal Studies to the resolution values all these sort of like high and mighty think tanks everywhere. The one thing they consistently always said they just want the government to do is raise investment spending because for a long time in this country, and it is plainly true, since 2008 foundry crisis, Britain has not invested in itself. That is just true. If you look across the world, across our peers, we lag behind every single indicator and you know Argy, we are now paying a consequence for that. For instance, you mentioned schools there in this heat. You know, that is something that we could have addressed when interest rates were 0% after co founder crisis where they're obviously not there anymore. So I think that is where it will be going. That is hopefully what a lot of economists want this government's doing and what everyone governments do is to raise investment spending and keep it at that level in order to regenerate the economy. But as I mentioned, you know, politicians never have the luxury of the 10, 15, 20 year view that the Institute for Fiscal Studies studies takes because they know voters want quick results, particularly in this environment. Now voters are, you know, they are really struggling the cost of living. They really are plainly true. And if Burnham can do something on the consumer front, which helps that slightly in the first couple of months, I think people will will appreciate that. I think that's the way that he can maintain the momentum is if he does give them some consumary policies and then really, you know, sort of look to the long term at the first budget in autumn.

[Luke Jones]

Jack, good to talk to you. Thank you.

[Jack Barnett]

Thanks Lee.

[Luke Jones]

Jack Barnett, Economics correspondent for the times. The story thetimes.com is our email address. I'm sure you've got views on this. Maybe you are the recipient of a state pension or maybe you're someone very much younger than that. Thinking yes. Trim that triple lock. Let us know. The producer today was Harry Stott. The executive producer was Edward Drummond. Sound design was by Ivan Eastleigh and theme composition was by Malicetto. I'm Luke Jones. See you.

[Hannah Previtt]

Foreign. Here from the business podcast. Join me for a special episode with PwC UK's Marco Amitrano and WPP's Michael Fralish, recorded at the Greater Together conference in Los Angeles, California. We'll discuss how partnerships between the US and the UK can drive economic growth and shape the future of transatlantic collaboration. Listen wherever you get your podcasts.

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