The British Chambers of Commerce (BCC) has called on the government to scrap the state pension triple lock and replace it with an inflation-only increase, a move it estimates could save the Treasury £3.3billion over two years.
The proposal forms part of a package of measures aimed at boosting economic growth and cutting the cost of doing business. The BCC has urged Labour Party Chancellor John Healey to adopt the change, arguing the savings should be redirected to reduce employers' National Insurance contributions for workers aged 21 to 24.
Triple lock under fresh pressure
The triple lock, which guarantees that the state pension rises by the highest of inflation, average earnings growth, or 2.5 percent, is facing renewed scrutiny as the Department for Work and Pensions (DWP) contends with a growing welfare bill that includes the state pension.
The BCC argues that switching to an inflation-only increase would free up funds that could encourage firms to hire younger workers, thereby reducing long-term welfare spending.
Chancellor urged to cut business costs
BCC director general Shevaun Haviland warned against further increases in business taxation, stating: "The Chancellor must use his first budget to cut the cost of doing business, allowing everyone to reap the economic benefits."
She added: "Piling more taxes on firms would be a road to ruin, and the quickest way to destroy business confidence."
Haviland acknowledged the government's fiscal constraints, saying: "We know the government is in a fiscal bind and its choices are limited. But support for business is not just money out the door, it generates vital economic returns."
Immediate action on youth employment and SMEs
Ms Haviland called for immediate measures to help young people into work, reduce business rates and energy costs, and support more small and medium-sized enterprises to export.
"Taken together, we believe these measures can help light the touch paper for stronger growth," she said.
She concluded: "Pro-growth choices have never been more urgent." The Chancellor is being urged to "back business, cut costs and deliver growth."
