Women’s State Pension Age: Ombudsman Report

Stephen Timms Excerpts

Thursday 16th May 2024 Commons Chamber

[Sir Stephen Timms (East Ham) (Lab)]

I thank the Backbench Business Committee for giving us the opportunity for this debate, and I thank the hon. Member for North Ayrshire and Arran (Patricia Gibson) for opening it. I should make it clear at the outset that I was the Minister for Pensions between December 1998 and July 1999, and again between May 2005 and May 2006, which is part of the period covered by the ombudsman’s report.

I draw the House’s attention to the evidence that my Committee, the Work and Pensions Committee, took on 7 May on the ombudsman’s report—we are grateful to all who gave evidence to us that morning—and to the letter that I sent to the Secretary of State for Work and Pensions yesterday on behalf of the Committee, setting out our suggestions for a way forward. Those documents have been tagged for this debate.

The ombudsman opened an investigation of all this in 2018, six years ago. After receiving more than 600 cases, it stopped accepting new ones and selected six sample cases to investigate, one or two of which have been referred to today. The investigation was split into stages. The first report, published in July 2021, found maladministration in the way in which the DWP had communicated the changes to affected women. A further report, published in March this year, concluded that this had meant that

“some women had lost opportunities to make informed decisions about their finances”,

which had

“diminished their sense of personal autonomy and financial control”

and

“caused unnecessary stress and anxiety”

and

“unnecessary confusion”.

[Sir John Hayes (South Holland and The Deepings) (Con)]

Let me say at the outset that the right hon. Gentleman was a distinguished Minister, well respected across the House in his various Government jobs. Is communication not the nub of this? Of course the decision itself is a matter for a debate on pension entitlement, but there is the entirely separate issue of how the decision was communicated, and the injustice lies in that failure to communicate. When we change people’s circumstances with notice and they have time to deal with it, cope with it, make alternative arrangements, that is one thing; but when we do not give them adequate notice because of their age, that is quite another. Disraeli, I think, said “Justice is truth in action”, and that is the truth of the matter.

[Sir Stephen Timms]

The right hon. Gentleman has echoed a number of the points that the ombudsman has drawn to our attention, but I think we should be clear about the fact that a great many people did know about this change. The passage of the legislation was widely reported at the time, nearly 30 years ago, and I vividly recall that in the first of my two stints as Pensions Minister, I spent a fair chunk of most days signing replies to MPs who had written on behalf of constituents who were unhappy about the impending change, or were calling on the then fairly new Government to reverse it. The replies that I signed were robust, and made it clear that the decision would not be reversed. The decision was quite well known, and—the right hon. Member for New Forest West (Sir Desmond Swayne) made a useful point in this regard—I think that citizens have a responsibility to keep themselves informed, by listening to the radio or reading the papers, of changes in the law that will affect them.

However, the ombudsman has established and made clear in the report that the Department found out, at around the second time I was Pensions Minister, that only 40% of women had known about the forthcoming pension age change. Forty per cent. is a large number, but 60% —the proportion who did not know about it—is even larger. The Department found that out as a result of research done in 2003-04, but did nothing about it until 2009. That is the maladministration that the ombudsman has identified. We do not know why nothing was done—well, I certainly do not—because the ombudsman has not told us, but it cannot be credibly argued that this was not maladministration. When a Department discovers information and then does nothing, there is clearly a problem.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I am grateful to my right hon. Friend for describing his experiences in connection with this matter. We have a clear finding of maladministration, but Government acceptance of that does not automatically follow, so we are having a debate today about whether we accept the findings when, given the timescale, we ought surely to be thinking more about how we deal with issues relating to who is eligible and who is not.

[Sir Stephen Timms]

I agree, and I will come to that point when I talk about the Select Committee’s discussions last week. It is worth adding that the problems caused by that maladministration were exacerbated by the decision in 2011 to increase the state pension age not to 65, as provided by legislation in 1995, but to 66, with very little notice given of that change.

The ombudsman said that had it reported directly to the DWP, it would have recommended that the Department apologise for the maladministration and take steps to put things right. As we all now know, the ombudsman did not report directly to the

Department because of concern that no remedy would be forthcoming. The interim ombudsman, Rebecca Hilsenrath, told the Committee last week that her office had been

“given repeatedly to understand that the Department did not accept our findings.”

Perhaps, when he winds up the debate, the Minister can tell us whether the Department now recognises that there was maladministration in this case.

In laying its report before Parliament in March, the ombudsman asked us in the House to “identify an appropriate mechanism” for providing a remedy. It set out its thinking, namely that the DWP should first acknowledge the maladministration and apologise; secondly, pay financial compensation to the six sample complainants at level 4 of the severity of injustice scale; and, thirdly, identify a remedy for others who had suffered injustice because of the maladministration. As we have heard, the ombudsman estimated that this would involve a sum of between £3.5 billion and £10.5 billion.

We need to find a resolution to this issue, and to find it quite quickly, because it has dragged on for a very long time. Angela Madden, the chair of the WASPI campaign, told the Work and Pensions Committee last week that a woman from the affected cohort dies every 13 minutes, which is a powerful point to make.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

I want to ask the right hon. Member about resolution. Given the maladministration and the points made by the ombudsman, the conclusion needs to happen through political choice. That political choice is between either the Government sitting there or a Government who might replace them at some point this year. Surely the WASPI women in my constituency of West Dunbartonshire, and those in everyone’s constituencies, need political agreement—not obfuscation or an abdication responsibility, but a clear political choice.

[Sir Stephen Timms]

I agree. The Government have said that they will respond without “undue delay”, and that they are considering the report in detail. Can the Minister tell the House this afternoon whether the Government will bring forward proposals for remedy, as the Work and Pensions Committee believes that they should, before the summer recess? We should set a clear timetable.

We need a scheme that is easy to administer. The ombudsman said that, in principle, redress should reflect the impact on each individual, but it recognised that the need to avoid delay, and the large numbers involved,

“may indicate the need for a more standardised approach”.

Jane Cowley, the WASPI campaign manager, told the Work and Pensions Committee that given the need for action

“within weeks rather than years”,

the scheme should be based on three principles: speed, simplicity and sensitivity. The evidence that has been gathered points to a rules-based approach to working out the compensation that should be paid.

[Jeremy Corbyn (Islington North) (Ind)]

I have read the evidence given to the right hon. Member’s Committee, which was taken in April this year. If the Government agreed that they had to accept responsibility for this issue and to go forward with it, how quickly could we start to see the highly justified compensation being paid to these women?

[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.

[Marco Longhi (Dudley North) (Con)]

The right hon. Member is giving an incredibly well-informed speech on this matter. I have met Angela Madden and various WASPI women in Dudley, and it is clearly a highly complicated and difficult issue to resolve, especially if it is necessary for the Government to look at appropriate and proportionate remedies, having first identified the women who have come to harm. Does the right hon. Member agree that whatever solution is come to, it is necessary to accelerate the work on this incredibly complicated issue at pace? While the clock does not stop for anybody, it certainly seems to accelerate for those of us of a greater age.

[Sir Stephen Timms]

I agree that we need to get a move on. That is why the Government should commit to bringing forward some proposals before the summer recess, so that we all know where we are heading.

The Government have all the information they need. It is a difficult and costly matter, but I hope they will be able to bring forward proposals in time for the House’s summer recess.