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The full state pension is expected to increase by roughly £504 next April

One of Britain's leading business organisations has called on John Healey to abolish the state pension triple lock as part of a plan to shore up Britain's finances.

The British Chambers of Commerce (BCC), representing over 65,000 companies with a combined workforce of 7.4 million, has for the first time called on the government to ditch the pledge in its official Budget submission.

Under the BCC's proposal, the state pension would rise in line with inflation alone rather than the triple lock formula, which guarantees increases matching the highest of 2.5 per cent, CPI inflation or wage growth.

The organisation estimates this shift would deliver savings of £3.3billion to the Exchequer across a two-year period.

Those billions in savings would be channelled into reducing employers' National Insurance contributions for workers aged 21 to 24, according to the BCC's plan.

The business lobby group argues that lowering the cost of hiring young people would directly address the youth worklessness crisis currently holding back the economy.

By making it cheaper for firms to take on entry-level staff, the BCC believes the measure could generate nearly £10billion in long-term savings through reduced welfare expenditure.

The full state pension is expected to increase by roughly £504 next April, taking the annual payment from £12,547.60 to approximately £13,052.

The May-to-July average wage growth figure, likely to be around four per cent, is set to be confirmed this month and will determine the exact uplift.

BCC director general Shevaun Haviland acknowledged the tight fiscal constraints facing the Chancellor but cautioned that heaping additional levies on companies would backfire.

"The Chancellor must use his first budget to cut the cost of doing business, allowing everyone to reap the economic benefits," she told The Telegraph, adding: "Piling more taxes on firms would be a road to ruin and the quickest way to destroy business confidence."

Ms Haviland stressed Government backing for enterprise should not be viewed as wasteful expenditute, noting it "generates vital economic returns" and gives companies "breathing space to create jobs, investment and growth".

BCC research indicates domestic policy costs imposed on firms have surged by more than 70 per cent over the past decade.

When asked by GB News about the BCC's proposals, Mr Healey signalled sympathy with the organisation's concerns about young people out of work.

"I agree with them what they were saying about youth unemployment. You heard me talk about it today — a scar, a blight on the future of those million young people," the Chancellor said. "It cannot be right that we write off a young generation in that way."

Mr Healey pointed to the work being carried out by Alan Milburn, indicating the Government would base its approach on his full recommendations.

He also echoed the broader thrust of the BCC's fiscal argument, adding: "As the Prime Minister has said, there is a need to bring down welfare costs."

The BCC's intervention lands against a difficult fiscal backdrop for the Chancellor, with the Office for Budget Responsibility warning the triple lock will cost £15.5billion annually by the decade's end, triple the projections made in the early 2010s.

Former OBR chairman Richard Hughes has cautioned the triple lock and other age-related spending pressures have left "the UK public finances in an unsustainable position."

In his first major speech since taking over at the Treasury, Mr Healey acknowledged the impact of high borrowing costs and promised to address the rising burden on businesses.

Mr Healey sought to present an optimistic assessment of the UK’s economic future despite the impact of global crises, including the war in the Middle East and Russia’s invasion of Ukraine.

In a speech in Coventry ahead of next month’s Budget, the first since Andy Burnham entered Downing Street, Mr Healey said: "The Prime Minister and I are in lockstep in our commitment to meeting the fiscal rules at the upcoming Budget, to balancing the books with a buffer to protect against uncertainty.

"To controlling borrowing to bear down on inflation and reducing long-term pressures on our public finances."

He said the rising burden of debt interest showed "staying true to our values means being honest about the need to control government spending".

However, he insisted there was an "optimistic story" about the UK economy which had "huge latent potential".