Women’s State Pension Age: Ombudsman Report

John McDonnell Excerpts

Thursday 16th May 2024 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I have lived this campaign for about 10 years, as have a number of other hon. Members. Today, we have heard unanimity from speakers from all political parties across the House. Unless we can get some action quickly, I despair of what parliamentary procedure is left to us. I do not want to go back to swinging the Mace about again, but something needs to happen fairly quickly because anger is building up, in the Chamber, outside and among the WASPI women.

I do not share the view of some hon. Members about the equalisation of pensions. I supported the equalisation of pensions, but not on the basis of the retirement age for women increasing. I thought we were entering a period when we would be reducing the age that men had to work until, so we would equalise pensions that way. The argument then was about whether the economy could afford it. The reason I was trying to equalise pensions by reducing men’s working age was largely for working-class people.

In many of our cities, the difference between the life expectancy of the rich and the poor is something like 20 years. We were told then that life expectancy would be continuously improving, but it has stagnated. Many people do not work in a sedentary role, so as we increase the retirement age—it is now going up to 68 and beyond—they will work until they drop. That is not acceptable, particularly in the economy that we have, where we could redistribute wealth, lower people’s retirement age and give them a decent pension.

I was involved in designing the scheme proposed in 2019. We commissioned Lord Bryn Davies, who is one of the most respected pensions experts in the country, and worked for two years with WASPI and the different groups to design the scheme. My commentary on the proposals by the ombudsman reflects some of the work that was done. We looked at a straightforward scheme. Going into individual cases would take decades, to be frank, so we looked at a flat-rate scheme for everybody, based on an average loss of £100 a week. That resulted in an average payment of £15,000, which is a lot of money. We costed it at more than £50 billion, which seemed a lot of money at the time, but it is less than a third of what the Government saved by increasing the pension age for these women. In addition, we looked at different options: should we pay it over a four or five-year period and reduce the cost to £12 billion a year. When I said during the debate that this was a large amount of money, somebody said that we had just paid out £500 billion to bail out the banks when they had crippled the economy. Then we went into 2020 and covid hit us.

[Grahame Morris]

The hon. Member for South West Bedfordshire (Andrew Selous) made some excellent points, but he asked us how we could fund decent pensions and the requisite compensation. I looked up the figures. As a percentage of GDP, the UK spends 5.7% on state pensions and pensions benefits. In Italy, the figure is 16%. In France, it is 13.9%. In Denmark, it is 10.1%. The OECD average is 8.2%. By any measure, we are miles adrift.

[John McDonnell]

I also looked at what had been provided in tax cuts to some of the wealthiest in our country since 2010. It was £100 billion. I looked at how much had been given in corporate welfare benefits, and, again, it was £100 billion. Therefore, although it sounded like a lot of money at the time, in the context of fairness, it was the right amount. That is why the ombudsman’s offer of between £3,000 and £10,000 is derisory; it has to be more than that. The reason for having a flat-rate compensation scheme is for ease of administration, and I would recommend that wholeheartedly.

We have heard today about the individual hardships that people have endured. We cannot allow that to go on any further, which is why this scheme must be expedited. The ombudsman reports and is accountable to the Public Administration and Constitutional Affairs Committee, on which I serve. We have considered each of the reports as they have come forward. We were critical about the delays that were taking place, so we impressed on the ombudsman the urgency of the situation. When we got the report back, we found that it had at least accepted that there had been an injustice and that there needed to be a compensation scheme. We waited with bated breath for the Secretary of State to announce at least the timescale and the timetable for that compensation scheme, but all we heard was that the Government would go away and consider it. That was weeks ago.

PACAC wrote to the Secretary of State and asked for a timetable, stressing the urgency of the matter, because, exactly as Members have said, people are dying. Some people cannot wait, because they either will literally not be here any more, or they are living in poverty and hardship.

We received a reply this week. The Secretary of State said that he would be bringing forward a statement “in due course”. What that means is nothing; it is meaningless. As a Committee, we have agreed to write again to say that that is unacceptable and that we need a clear timetable in which this matter will be addressed and proposals brought forward that we can vote on and, if necessary, amend in this House.

If this Parliament is sovereign and the Government are accountable to this House, I believe that there is a majority, an overwhelming majority, of Members who will vote for a compensation scheme that is readily accessible, and also at a level that reflects the hardship that people have suffered and the scale that most Members would want to see.

As we go into a general election, the issue will not go away. The WASPI women and their campaign will not go away. People have expressed admiration for that campaign, which is not just impressive; it is terrifying. Unless a proposal is brought forward, it will become an election issue. I think people’s votes will stand or fall in many constituencies on the basis of the decision coming out of all the political parties. Voters will, however, blame the Government the most, because there is an opportunity now, as others have said, to make a statement by the recess with a timetable for implementation. We could almost certainly agree the funding. We looked at how to raise the funds. Some could be borrowing, but the Government normally have contingencies for legal liabilities. This is a legal liability. We have the opportunity to act now, and I urge the Government to wake up and listen to what the whole House is saying. If today’s response is not satisfactory, we will be back next week, and if necessary every day until the recess until we get some sense out of the Government.

--- Later in debate ---

[Paul Maynard]

Sorry, I won’t.

During the course of the ombudsman’s investigation, state pension age changes were considered by the courts. In 2019 and 2020, the High Court and Court of Appeal respectively found no fault with the actions of DWP. The courts made clear that under successive Governments dating back to 1995, the action taken was entirely lawful and did not discriminate on any grounds. During those proceedings, the Court of Appeal held that the High Court was entitled to conclude as a fact that there had been

“adequate and reasonable notification given by the publicity campaigns implemented by the Department over a number of years”.

We recognise the importance of providing information in good time about the state pension age to help individuals to plan for their retirement. Since 1995, the Government have used a range of methods to inform people about the increases in state pension age, including the provision of detailed and personalised information. The methods have included leaflets explaining the legislative changes, pensions education campaigns, press advertising and direct mailing exercises to millions of people. People have been able to request personalised state pension information since the 1980s.

[John McDonnell]

We do not know the timing of the general election—possibly November, but maybe later—but it is likely that we will have only about 10 sitting weeks between now and a general election. Can I impress on the Minister to take back to his fellow Ministers that we need the proposals rapidly in those 10 weeks, and certainly before recess, if we are to get a viable scheme through Parliament?

[Paul Maynard]

I am happy to confirm that I will take that message back. I have heard it clearly today. I understand the points about the Work and Pensions Committee’s findings, too. The right hon. Gentleman will have heard the Secretary of State—and me, in oral questions on Monday—say that we wish to have no undue delay. That remains the case. I recognise that people are frustrated by that phrase, but it is an accurate phrase. We do not wish undue delay. As I keep saying, it is a complex issue. It is not just a matter of ticking a box. It needs to be gotten right, and we understand all the ramifications and options that are open to us.

Between April 2000 and February 2021, the DWP provided more than 41.2 million personalised state pension statements, and it continues to do so. As well as issuing letters to the 6.9 million women and men born in the 1950s notifying them of the state pension age increase, the DWP sent around 17.8 million automatic state pension forecasts between 2003 and 2006, which included a leaflet explaining that the state pension age for women was increasing.

As I have outlined, the Government recognise the importance of this issue. The ombudsman report has been laid before Parliament, and we have been invited to take a view and engage with this issue. Today is one part of that. We will listen to the views of the House with great seriousness. The report is currently being given active and extensive consideration within the Department, by me and by the Secretary of State. We will seek to provide a further update without, as I say, undue delay, and I hope to give the issue the airing that it deserves as soon as that is practically possible.