Work and pensions secretary Liz Kendall has told parliament that the proposed compensation plans were either unworkable or disproportionate.
This is despite a Parliamentary and Health Service Ombudsman ruling earlier this year that the affected women were victims of “maladminstration” by the Department for Work and Pensions (DWP).
It recommended compensation be paid and set out a number of options for making payments, with the total bill estimated at between £3.5bn and £10.5bn.
However, Liz Kendall, the work and pensions secretary, told parliament today (17 December) that the government had decided not to pay any compensation.
“Given the vast majority of women knew the state pension age was increasing, the government does not believe paying a flat rate [of compensation] to all women at a cost of up to £10.5bn would be a fair or proportionate use of taxpayers' money,” Kendall said.
The ombudsman’s other suggestions for compensation included a self-certification option, which Kendall said would be “impossible to verify”, and for the DWP to assess individual claims. This latter option would involve “thousands of staff” and take years to implement, the work and pensions secretary said.
She also took aim at the previous government, which she said had “failed to set aside a single penny” for compensation. Kendall also cited the £22.5bn budgetary “black hole” that Labour claims was left by the previous administration.
“This has been an extremely difficult decision to take, but we believe it is the right course of action – and we are determined to learn all the lessons to ensure this type of maladministration never happens again,” Kendall said.
Political reaction to ‘unacceptable’ decision
Former Labour leader Jeremy Corbyn said the decision was “beyond disappointing”, while other politicians from various parties also weighed in against the move.
Under Corbyn’s leadership in 2019, Labour proposed a compensation system that would have cost approximately £58bn.
Ian Lavery, Labour MP for Blyth and Ashington, said on social media: “The announcement today is quite frankly unacceptable. I will continue to fight for justice for all of the women involved in this injustice.”
Liberal Democrat MP Tim Farron said: “The government have betrayed millions of pension-aged women, who were wronged through no fault of their own. Today’s heartless decision cannot be allowed to stand and I will be pressing the government to give those affected the fair compensation they so badly deserve.”
“Outright rejection of the ombudsman’s report raises much wider issues than compensation over pension age changes, and MPs should not take this decision lying down.”
Steve Webb, LCP
Gillian Martin, member of the Scottish parliament for Aberdeenshire East, has written to Kendall demanding an explanation as to how the government arrived at its decision.
“It is a travesty that many women have died waiting and [others] will continue to lose out now because the ombudsman has no way to enforce its findings and recommendations to the government,” she wrote.
The Scottish National Party, of which Martin is a member, pledged to pay compensation in its manifesto for the 2024 general election.
Former pensions minister Steve Webb, partner at LCP, said the government’s rejection of the ombudsman’s recommendation “sets an extremely worrying precedent”.
“There is a risk that governments will now feel emboldened to ‘pick and choose’ when faced with a critical ombudsman report, effectively setting themselves up as judge and jury,” he said.
“Even if the government felt it could not afford to implement the recommendations in full, there were many options that would have offered some redress to those most affected.
“Outright rejection of the ombudsman’s report raises much wider issues than compensation over pension age changes, and MPs should not take this decision lying down.”
