Women’s State Pension Age: Ombudsman Report

Alistair Carmichael Excerpts

Thursday 16th May 2024 Commons Chamber

[Sir Stephen Timms]

I would hope quite quickly, and I will explain why.

The payments involved would be adjusted within a range, based on the ombudsman’s severity of injustice scale. It would depend on two variables: first, the extent of the change to the individual’s state pension age—how much it increased by—and, secondly, the notice that the individual received. The less notice someone had of the change, and the bigger the change to their state pension age, the higher the payment they would receive. An arrangement like that would not be perfect, but it would be quite quick and relatively inexpensive to administer compared with a more bespoke system, because it would involve applying known data to a formula to work out the amount that was due. I ask the Minister whether he accepts that, in principle, a rules-based system would be the best way forward.

Beyond that, it was suggested to the Work and Pensions Committee that there should be some flexibility for individuals to make the case, after the standard payment has been calculated, that they experienced direct financial loss as a result of the maladministration, and that they should therefore be entitled to a higher level of compensation. Flexibility would be needed, because although the ombudsman did not see direct financial loss in the six sample complaints that it looked at, it did not exclude the possibility that there could be in other cases. For example, Angela Madden, the chair of the WASPI campaign, suggested to us that somebody whose divorce settlement was less than it would have been because it was based on the expectation that she would receive her state pension at the age of 60, might well be entitled to a larger amount because of that particular development.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

The right hon. Gentleman makes a very important point. Looking at the experience of other compensation schemes—the one that comes to my mind is the Icelandic trawlermen compensation scheme—it is clear that the longer we leave these things, and the longer the passage of time, the more difficult it gets to resolve them. Does that not underline the need for speed here?

[Sir Stephen Timms]

I agree that we need to get on and resolve this issue after a very long period.

The ombudsman suggested a remedy based on level 4 of its severity of injustice scale, given the finding that individuals had experienced indirect financial loss. We on the Work and Pensions Committee did not seek to question that view, and I do not intend to do so this afternoon. Regardless of the level of remedy or the means by which remedy is delivered, it will need parliamentary time, financial resources, and the data and technical systems that are available only to the Department for Work and Pensions. Even if a Back Bencher brings forward a private Member’s Bill, as the hon. Member for Kilmarnock and Loudoun (Alan Brown) has done, it cannot become law without Government support. It will need a money resolution that only the Government can bring forward, so it is not realistic to say that Parliament can resolve this issue; it must have the Government’s full-hearted involvement.

There will be different views on the findings of the ombudsman’s report. However, as the interim ombudsman told the Work and Pensions Committee last week, she is appointed by Parliament to carry out these investigations and is accountable to it through the Public Administration and Constitutional Affairs Committee. I will read out what Karl Banister from the ombudsman’s staff told the Work and Pensions committee last week. He said:

“We want everyone to comply with our recommendations, but it is implicit in the scheme that because we don’t have enforcement powers, it may be, sometimes, that an organisation thinks it doesn’t want to. Then the partnership is that Parliament, as our supervisor, will do something about that.”

That goes to the point made by the hon. Member for South West Bedfordshire (Andrew Selous) earlier. Mr Banister continued:

“I think what would damage the standing of the ombudsman is if Parliament declined to do that.”

It is important for all of us that we see this through. We have asked the ombudsman to undertake this role, and it has done the job that we asked it to do. We now need to play our part in ensuring that this matter is resolved. Time is not on our side, and the Government have been aware of this issue for a while.