I do sympathise with those that lost out Niall but there are always going to be winners and losers in many situations where changes are made. We were aware of the changes to pension ages long ago and ok, it got accelerated for some, but overall there was fair warning in my estimation. I worked two years beyond my official retirement date in order to boost my small private pension pot which had been massively reduced by divorce, I don't complain about it, I just got on and did it. Such is life.
Some will find this hard to swallow: but as we were just discussing...
Sorry, Waspi women, we gave you fair warning
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There are clear cases where injustice has occurred and taxpayers should pay for compensation — this is not one of them
William Hague
Monday March 25 2024, 5.09pm, The Times
‘Congratulations, minister,” were the opening words to me of my new private secretary when I became a minister for the first time in 1993. His next words were, “Unfortunately, as pensions minister, you are going to face a big problem.”
I would learn over the years that it was quite normal to be told in the first few minutes of a ministerial job that there was a large, unexploded bomb sitting in my in-tray. But this one was purest dynamite and I was a brand new minister. The European Court of Justice had ruled — this was long before Brexit was even a twinkle in Nigel Farage’s eye — that discrimination between men and women in pension provision was unlawful. My task was to work out what on earth we were going to do with a British system in which men received their pension at 65 but women could claim it at 60.
After months of midnight oil I finalised the solution, which was then debated for the best part of a year in parliament and finally became the Pensions Act of 1995. We would raise the women’s pension age to 65, but we would do it over an exceptionally long time. We wouldn’t even start changing women’s entitlement for 15 years, until 2010, and then do it gradually until 2020 — a quarter of a century in total. I don’t believe any government policy has ever been deliberately implemented so slowly. The only thing more glacial in government is building a railway line, but that’s not remotely intentional.
I must put my hand up, therefore, in the furore over women’s pensions, the
campaign of the Waspi
women (Women Against State Pension Inequality), and last week’s opinion from the ombudsman that compensation of up to £10.5 billion should be awarded to some women who were affected. It was I who created the original scheme — although not the more controversial decisions that came later, I hasten to add — and it was I who gave more notice of a change in people’s financial circumstances than any minister has ever given, probably in the whole history of ministers, governments or pensions. There was time for at least three general elections to take place in which anyone might have mounted a campaign to modify the decision, but no one did.
This is important background when considering
whether compensation should be paid to those affected by the change. It would be paid by today’s taxpayers and future pensioners, since there isn’t anyone else to pay it. A key part of the ombudsman’s case is that many people were still unaware, a decade after my legislation, that the women’s state pension age was changing. I have some sympathy with this point. Had I still been the minister after all that time I am quite certain that I would have instructed officials to write to every individual who might be affected to make sure they knew. Eventually that was done, but it should have happened faster.
Still, this was hardly a decision that took place in secret. Many millions of people were fully aware of the impending change, over many years. The principle behind the entire policy was to be able to treat people equally. None of this, on its own, justifies paying compensation.
There was then an important twist in this tale when the coalition government that took office in 2010 changed the original plan, announcing that the final stage of raising the women’s pension age would proceed more sharply, from 2018. Even though this was much more speedily communicated to all affected, it was understandably unpopular with people, born for instance in 1954, whose pensionable age jumped up quickly. And the issue is further complicated by other changes to the state pension and the rules for national insurance passed in 2014, although these resulted in a simpler system.
The ombudsman found that the Department for Work and Pensions was poor at handling complaints and inquiries after those changes had been announced. That rings true. But the question is whether it merits compensation adding up to billions of pounds. The political parties have an election coming up but they also know there is no money to spare, so they say they will think about it “in due course” (Conservative) or give it “serious consideration” (Labour). Many MPs want to please the constituents who complain to them so they campaign for large compensation, while often arguing for lower taxes at the same time. It’s easier for me, as one who has long since stopped running for election, to blurt out the truth as I see it.
There are clear cases where such serious harm or injustice has occurred that taxpayers can be expected to pay for compensation. The
sub-postmasters scandal is one of those, although at least some of the compensation should come from companies implicated in it. The tragedy of infected blood, the subject of a major inquiry, will be another. But it is much harder to justify large-scale compensation for all the inadequacies in communication by the DWP, for the implementation of policies that were openly declared and debated in a democratic parliament, years before coming into force.
In the same budget of 2010 that began accelerating the increase in the women’s pension age, many changes were made with only months or even days of notice. Child tax credits were cut for better-off families, and VAT and capital gains tax went up. The next year, students’ tuition fees were trebled. We can argue for or against these things, but as in many budgets under all governments they happened at short notice and affected millions of people. What about Gordon Brown’s raid on pension funds in 1997, which took many billions out of occupational pension schemes? There is no way of compensating people for such changes, even though minimal notice was given, without recycling much of the national income among ourselves in compensation payments.
Most crucially, compensation on the scale proposed can only come from people who are now of working age, or a future generation if the money is borrowed. Yet people who are in their thirties today might be 70 or more when they receive a pension, given the ageing of the population. And they are highly unlikely to have “triple-lock” increases in that pension because that will have truly become unsustainable by then. Is it morally right to take away more of their income in compensation for a policy that, even with its later modifications, was publicly set out many years in advance?
All things considered, I don’t think so. Today’s leaders will understandably duck the question. But they should steel themselves to explain that mass compensation must have its limits and is hard to justify in this case.
