By GB News (Politics) | Created at 2026-09-02 10:33:27 | Updated at 2026-09-02 11:18:14
1 hour ago
One of Prime Minister Andy Burnham's own allies has urged the Prime Minister to abolish the state pension triple lock as a response to soaring Government borrowing costs.
Lord Jim O'Neill, who previously served as an adviser to Mr Burnham, insisted the new PM must rein in public expenditure to rebuild investor confidence.
Speaking to journalists, Lord O'Neill said: "It's going to force his own political party and hopefully the whole Whitehall system to get real about dealing with some of the things that are out there, such as the triple lock, excessive spending on welfare."
In a subsequent interview, he added: "There's been a denial from all sorts of Governments, many of which we've had the past few years, where they just sort of live in a world where none of these things seem to be real, and it's got into this psychology where they're sort of regarded as sacred cows that no politician dare touch."
An ally of Andy Burnham is telling the PM to axe the state pension triple lock
GETTY
Amid global inflationary pressures, the yield on 10-year gilts climbed to 5.25 per cent on Wednesday, a level not seen since 2007. Meanwhile, 30-year borrowing costs surged to 5.89 per cent, marking a 28-year high.
Long-term Government borrowing has now reached its most expensive point since 1998, heaping further strain on the public finances with Chancellor John Healey's inaugural Budget just weeks away.
The state pension triple lock has been cited by multiple economists as a particular expenditure cost that needs to be reigned in.
Under the triple lock, state pension payment rates are raised by the highest of inflation, average wage growth, or 2.5 per cent; whichever is highest.
Lord O'Neill is urging the Prime Minister to explore state pension reform
The deepening sell-off in Britain's bond market created an especially challenging backdrop for Mr Burnham as he readied himself for his first outing at Prime Minister's Questions.
Lord O'Neill told Times Radio that the situation ultimately demanded reductions in Government spending: "What this boils down to, he's got to make some cuts in terms of Government spending."
Those attacks triggered a sharp rise in energy costs, with wholesale European gas prices jumping to their highest point in three years.
Brent crude oil also breached the $95-a-barrel mark, compounding fears about persistent inflationary pressures.
However, while the sell-off has been an international phenomenon, City figures have expressed particular unease about the United Kingdom's position as the Budget approaches.
Mr Burnham has made a number of costly policy pledges, yet there has been no clarity on how his administration will pay for his agenda in the years to come.
Economists have cautioned that even without any fresh spending commitments, the Chancellor faces a daunting fiscal challenge.
Critics have warned that the bond market turmoil has eroded the Government's financial cushion to such an extent that Mr Healey may need to identify savings of up to £14billion simply to restore adequate headroom in the public finances.
