Women’s Changed State Pension Age: Compensation
(Limited Text - Ministerial Extracts only)
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The Parliamentary Secretary to the Treasury (Torsten Bell)
It is a pleasure to serve under you today, Dr Murrison.
I thank the right hon. Member for South Holland and The Deepings (Sir John Hayes) for securing a debate on this important topic. I also thank him, if slightly less enthusiastically, for its timing, which is on my first day in office. That fact also explains the delay in answering the named day question put by the hon. Member for Torbay (Steve Darling), which he referred to in his contribution to the debate.
I am under no illusion that everyone in this Chamber, or almost everyone in this Chamber, will agree with everything that I am about to say. However, all of us who have listened to this debate and to the important points made by right hon. and hon. Members have benefited from it, and we all recognise the context of this debate, which is the squeeze on living standards that has affected women born in the 1950s just as it has the entire country.
The issues that we are discussing today are important to many women, including my aunt in west Wales, who was born in 1955 and who pays particularly close attention to these issues. I spoke to her last night as part of my preparation for this debate and she would agree with the points made by the hon. Member for Lagan Valley (Sorcha Eastwood), and by my hon. Friend the Member for Clapham and Brixton Hill (Bell Ribeiro-Addy), that women of her generation have faced many difficulties and particular discrimination. People have spoken powerfully about that.
It is therefore right that this debate gives the long-held concerns of those women the consideration they deserve, just as it was right that the Government considered those concerns in making the decision that we are debating today. That is also why my predecessor, my hon. Friend the Member for Hampstead and Highgate (Tulip Siddiq), was the first Minister in eight years to meet WASPI Ltd, why the Government considered the ombudsman’s investigations and reports in detail, and why we look closely at what Parliament has said on this subject. Although I understand that the outcome was disappointing for many, the decision was based on the evidence.
Before I set out how we reached that decision, as the hon. Member for East Wiltshire (Danny Kruger) requested, it is worth reiterating the point that several Members have made: the ombudsman’s report was not about the decision in 1995 to increase the state pension age for women, or the decision in 2011 to accelerate that increase. Those decisions were the focus of remarks by many Members, including my hon. Friend the Member for South Shields (Mrs Lewell-Buck). They were taken by Parliament, including by many Members who are here today, and they were upheld by the Court of Appeal in 2020.
Sir John Hayes
I welcome the Minister to his place; I appreciate that this debate is his first outing and his comments about the timing are well made. However, the WASPI campaigners have never made that case; they have never said that they were against the equalisation. What they said, and rightly so, is that they were not properly informed and that is precisely what the then ombudsman confirmed in his report. Will the Minister just answer this simple question? The ombudsman said that he felt it was unlikely the DWP would respond to his report—it was sad that he should have to say that. The ombudsman proposed—unusually, in his words—that the matter be laid before Parliament. Will the Minister use his endeavours to ensure Parliament gets to vote on the ombudsman’s recommendations?
Torsten Bell
We have already had a long statement in the main Chamber. The point of debates like this one today is to make sure that the Government are held accountable for their decisions.
Torsten Bell
I will make some progress and give way later on. There has also been, as has been raised, the opportunity for all parties to call for more time and for votes in the main Chamber. I am sure the right hon. Member for South Holland and The Deepings will take that up with his party in the months ahead. I will make some progress and take more interventions as we proceed.
The ombudsman’s investigation concerned the more specific question of how changes in the state pension age were communicated to women, like my aunt, born in the 1950s. The Government started sending personalised letters in April 2009, but the ombudsman concluded we should have started 28 months earlier. My right hon. Friend the Secretary of State has apologised for that delay. We are determined to learn the lessons so that we avoid similar mistakes happening again. First, we will work with the ombudsman to develop a detailed action plan, identifying and addressing lessons from this and other PHSO investigations. Secondly, we are committed to providing clear and sufficient notice of any changes in the state pension age so that people can plan for their retirement. Thirdly, the Secretary of State has directed the Department to develop a clear and transparent communication strategy for state pension changes; work on that has already begun. This will build on changes that are already under way, such as our online “Check your State Pension forecast” service, which provides a forecast of the level of state pension, but also information about when people can take it.
The ombudsman looked at six cases and concluded that DWP provided adequate and accurate information on changes to the state pension age between 1995 and 2004. However, they also found that decisions made between 2005 and 2007 led to a 28-month delay in sending out letters to women born in the 1950s, many of whom are here with us today. The ombudsman said that those delays did not result in women suffering from direct financial loss, but that there was maladministration, and we agree.
Ayoub Khan
In spite of what the ombudsman has recommended, it is clear that the current Prime Minister recognised and advocated throughout the country that WASPI women were dealt an enormous injustice. It is a principle of democracy where we advocate for something when we want power, we ought to deliver once we get power to maintain trust and confidence. In spite of what the ombudsman recommends, does the Minister agree that the Prime Minister should honour what he advocated?
Torsten Bell
I thank the hon. Member for his intervention. The Labour party did oppose the acceleration of the state pension age in the early part of the last decade, but he and many other Members will have noticed very viscerally that the Labour party lost many elections since then. Parliament made a decision and the courts have since endorsed that decision. There was maladministration and we must learn the lessons.
Grahame Morris
I appreciate that being newly in post is difficult, but can I clarify something? The Opposition spokesman, the hon. Member for East Wiltshire (Danny Kruger), said that the changes were introduced in 1995—I believe under John Major—but the acceleration of the changes was in 2011-12, under the coalition Government. I think Steve Webb was the pensions Minister. My hon. Friend the Minister says that there was no financial loss, but there must be a financial loss for the women affected. We could argue whether that is justified. We certainly cannot argue that a majority in Parliament passed it. The women must have suffered a financial loss because of having to wait another six years before getting their pension.
Torsten Bell
I thank my hon. Friend on two fronts for his intervention. First, because he has reinforced the point that I just made, which was that we are struggling to distinguish between the rights and wrongs of the original decision about the state pension age, the equalisation in 1995, the acceleration in 2011 and the ombudsman’s report, which is focused narrowly on the communication of those decisions. On a second front, he reminds us that it was in fact George Osborne who said that the acceleration of the state pension rises was the single biggest saving that he made. He boasted about it, but that is a separate issue.
Torsten Bell
I think I should make some progress and give way later. I want to get on to the bit that most Members might not agree with, but at least will explain what we are doing, because we do not agree with the ombudsman’s approach to injustice or indeed to remedy. The right hon. Member for New Forest East (Sir Julian Lewis) and the hon. Member for Salford (Rebecca Long Bailey) rightly noted that is unusual, and it should be unusual. However it is also not unprecedented.
The decision not to introduce a compensation scheme was difficult and complex. The ombudsman assumed, despite evidence to the contrary, that sending letters earlier would have fundamentally changed what women knew and how they acted. However research from 2014 shows that only one in four people who are sent unsolicited letters actually remembers receiving and reading them. The ombudsman does not address this evidence.
Neil Duncan-Jordan (Poole) (Lab)
I am grateful to the Minister for giving way. Will he confirm whether the Government’s decision and their claim that only 10% of women affected were unaware of the state pension change is based on a survey from 2006 involving just 210 respondents?
Torsten Bell
If my hon. Friend will allow me to make some progress, I will come to exactly that point shortly.
There was considerable awareness that the state pension age was increasing. I think everyone agrees on that even if they do not agree about the research itself. The research used by the ombudsman, from 2004, shows that 73% of people then aged 45 to 54 were aware that the state pension age was going up. Further research shows that, by 2006—when the ombudsman finds that the direct mailing should have begun—90% of women aged 45 to 54 were aware that the state pension age was increasing. We therefore cannot accept that, in the vast majority of cases—and I appreciate it is in the vast majority of cases—sending letters earlier would have affected whether women knew their state pension age was rising or increased their opportunities to make an informed decision. It would not be reasonable—
Sir John Hayes
I am extremely grateful to the hon. Gentleman for giving way to me for a second time. To be clear about this: there are two issues at stake here—how many women knew, and how communications would have affected that. The fact of the matter is that the ombudsman’s report—I have it in my hand—says
“Research reported in 2004 showed that only 43% of all women affected by the 1995 Pensions Act knew their State Pension age was 65, or between 60 and 65.”
That is a clear majority of women who did not know. Therefore the only debate is whether communicating with them would have been effective. As my hon. Friend the Member for East Wiltshire (Danny Kruger) said, if it would not have been effective, what is the point in Government communicating at all?
Torsten Bell
I was not going to go into this detail, but the right hon. Member for South Holland and The Deepings is inviting me to return to some of my past lives with the details of surveys. The 43% figure that he is referring to refers to all women. What the ombudsman did not do is look at the same survey and look at the women who were affected by this change, who were obviously slightly later in life and much more likely to know about their state pension age. That is where the higher figures I am quoting come from. It is from the same survey as used by the ombudsman, but it is focused on the women who are actually affected by the change.
Richard Burgon
I thank the Minister for giving way and I congratulate him on his appointment. However, to get to the crux of this: when the decision our Government have made on this was announced—and there is much to be proud of in what it has done since the general election—my jaw hit the floor. I was flabbergasted. It is my belief that the vast majority of Labour MPs could not believe it when it was announced. That pales into insignificance compared to the reaction of the WASPI women who I and others have been proud to support in my Leeds East constituency and elsewhere. My last point is that, before this decision was made, I said to the WASPI women outside Parliament that justice delayed is justice denied. This is worse than that. I thought I was just trying to compel our Government to hurry up and make a decision. This is not justice delayed is justice denied. As it stands, unless we do something, this is justice denied full stop.
Torsten Bell
I thank my hon. Friend for his intervention and for his brief congratulations on my appointment prior to his wider comments. I would say gently that he and I both stood on the same manifesto which did not promise to provide compensation, and lots of Members have talked about trust in this Chamber. There was a clear choice not to make that promise in the manifesto.
Torsten Bell
I really must make some progress because we are about to run out of time.
It would not be a reasonable or fair use of taxpayer money to pay compensation to people whose circumstances would be the same today even if the maladministration had never occurred. A compensation scheme would cost up to £10.5 billion, less than the scheme previously proposed by the right hon. Member for Hayes and Harlington (John McDonnell) but still a significant amount.
The ombudsman is clear that, as a matter of principle, redress and compensation should normally reflect individual impact. The Department considered at length whether a tailored scheme could be delivered, but it was simply not a viable option. The ombudsman’s report acknowledges the cost and administrative burden of assessing the individual circumstances of 3.5 million women born in the 1950s. Indeed, it took the ombudsman nearly six years to investigate just the six sample cases. To set up a scheme and invite 3.5 million women to set out their detailed personal circumstances would take years and thousands of staff.
Jeremy Corbyn (Islington North) (Ind)
Will the Minister give way on that point?
Torsten Bell
I must make some progress.
We also do not believe that paying a flat rate to all women would be a fair or proportionate use of taxpayers’ money. I want to address the questions asked by several hon. Members about the specific research findings. It is important to say that the evidence on what women knew about the state pension age changes is robust. The same research was used by the ombudsman, who clearly did not have concerns about its validity.
I have heard hon. Members make powerful speeches today and I understand the strength of feeling on this issue, not least from my aunt. Many women born in the 1950s worked hard in paid jobs, often balancing that with raising a family. The Government have a responsibility to take their concerns seriously, which is why Ministers listened, reflected and carefully considered this complex decision. As custodians of the public purse, however, we must also ensure that decisions are rooted in evidence and are fair to everyone.
The fact remains that the vast majority of women knew that the state pension age was increasing. Even for those who did not, we know that sending letters earlier would not have made a difference in most cases. [Interruption.] Although I know that that decision will be disappointing, as we are hearing, and many have been frustrated by watching this debate drag on for years, we believe it is the right course of action. Of course, it is also right that the Government should be held to account for that decision, as is happening today.
Jeremy Corbyn
I congratulate the Minister on his appointment. I think I am right in saying that it is unprecedented for the Government to reject in its entirety an ombudsman’s report and offer absolutely nothing. Those women were led up the garden path in the last election, and before that, by people saying that compensation was going to be paid. The Minister needs to explain why the Government are simply ignoring the plight of those women.
Torsten Bell
It is an important issue, and we have been listening to the plight of those women for many years—and rightly so. Important and powerful cases have been made by many hon. Members, but I have set out why the Government have made that decision.
We will continue to help women born in the 1950s and pensioners across the UK by investing a crucial £22 billion into NHS England this year and next, with consequentials for the Welsh and Scottish Governments.
Torsten Bell
No, I will not.
The biggest betrayal of our older generations is the state of our health service. We will also boost the state pension by up to £1,900 by the end of this Parliament. As the new Pensions Minister, I know that nothing is more important than providing a foundation for the secure retirement that everyone deserves after a lifetime of work.