UK PM Truss commits to pension spending, no comment on benefits, foreign aid

LONDON (Reuters) -British Prime Minister Liz Truss said on Wednesday she was committed to increasing state pension payments in line with the level of inflation, but declined to give the same reassurance for welfare payments and foreign aid.

Truss has been forced to hunt for deep spending cuts after the prime minister’s now-scrapped economic programme shattered investor confidence in Britain’s government and sent borrowing costs surging.

Truss’s new finance minister, Jeremy Hunt, dismantled Truss’s economic policy on Monday, and said then that he could not commit to raising state retirement payments in line with inflation in April as had been expected.

Asked if Truss had ditched the policy, known as the triple lock because it increases publicly-funded pensions by the highest of earnings, inflation or 2.5%, she told the House of Commons on Wednesday she remained fully committed to it.

“We have been clear in our manifesto that we will maintain the triple lock, and I am completely committed to it, so is the chancellor (finance minister),” she told parliament.

Truss’s spokesman said that she had discussed the issue with Hunt and agreed on an approach with him before she reiterated the commitment to the triple lock.

“She wanted to provide that reassurance,” Truss’s spokesman told reporters.

The Resolution Foundation think tank has said indexing the state pension to average earnings rather than inflation would save the government roughly 6 billion pounds ($6.74 billion) in each of the next two financial years.

Asked if the same reassurance could be given for welfare benefit payments, Truss said the country had helped the poorest by providing energy subsidies and that it would always help the most vulnerable.

Asked about the country’s foreign aid budget, Truss said more details would be set out in due course.

Britain cut a long-standing policy of spending 0.7% of economic output on foreign aid during the coronavirus pandemic, reducing it to 0.5%.

($1 = 0.8900 pounds)

(Reporting by William James, Andy Bruce, Elizabeth Piper and Alistair Smout, writing by Kate Holton, editing by Elizabeth Piper)