Improving public services is a higher priority than spending £10bn compensating Waspi women, the chancellor, Rachel Reeves, has said, as MPs and campaigners criticised the decision to reject the watchdog’s recommendation for a flat-rate compensation scheme.
Her comments came after campaigners accused Labour of hypocrisy for having promised to compensate women hit by the rising state pension age. The parliamentary ombudsman had recommended paying out £1,000 to £2,950 to each of the more than 3 million women affected.
Reeves said the “expensive compensation bill” could not be justified as most women said they did know about the pension age changes.
Reeves, who backed the Waspi campaign in opposition, said: “I understand that women affected by the changes to the state pension age feel disappointed by this decision, but we looked in full at the ombudsman recommendations and they said that around 90% of women did know that these changes were coming.
“And as chancellor, I have to account for every penny of taxpayers’ money spent. And given that the vast majority of people did know about these changes, I didn’t judge that it would be the best use of taxpayers’ money to pay an expensive compensation bill for something that most people knew was happening.”
Rebecca Hilsenrath, the ombudsman, criticised the government’s decision not to offer compensation. She told Times Radio: “It’s great that the government are saying that our intervention will lead to service improvements and it’s fair to say also that people who come to us, overwhelmingly, are motivated by wanting things to improve for other people.
“But what we don’t expect is for an acknowledgment to be made by a public body that it’s got it wrong but then refuse to make it right for those affected.”
The homelessness minister, Rushanara Ali, admitted the situation was “deeply regrettable” but said the women had received an apology. She said compensation would not be a “fair or proportionate” use of taxpayers’ money.
She told BBC Radio 4’s Today programme: “The fact is that we have got a huge, huge job to do in terms of making sure that the conditions that pensioners live in in our country are improved and that’s why our focus is on protecting the triple lock, which will unlock £30bn in this parliament, supporting pensioners … and that includes those who were women born in the 1950s.
“So this government has inherited a devastating set of issues; we are responding to those challenges.”
Ali told Sky News the cost of the compensation was too great at £10bn, “which we don’t feel is fair or proportionate in terms of use of public money, given that some 90% of those affected, according to the ombudsman’s report, it would not have been made a difference in terms of the delay in the letters.
“But the reality is, this has been a very difficult issue for those affected, and it’s deeply regrettable, and lessons will need to be learned.”
Challenged again on Labour’s promises to the Waspi women in opposition – including from the now work and pensions secretary, Liz Kendall – Ali told Sky: “I go back to the point about the lessons that need to be learned, and the fact that this government has apologised for that delay. But we’ve got to focus on the issues at hand, in terms of improving the living standards of pensioners.”
