Why won't Waspi women get compensation? Anger as 'shameless' government blocks payouts

Chancellor Rachel Reeves has said she understands that Waspi women denied compensation after changes to the state pension age will be disappointed, but insisted paying an “expensive bill” was not the best use of taxpayers’ money.

Reeves, who in opposition backed the Waspi campaign, said: “We looked in full at the ombudsman recommendations and they said that around 90% of women did know that these changes were coming.

“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.”

The government has been branded "shameless" over the decision. Nine months ago, the parliamentary ombudsman said women should receive between £1,000 to £2,950 per person for the lack of notice by the government in changing the pension age from 60 to 66.

Senior Labour MPs have previously backed the campaign, including work and pensions secretary Liz Kendall, who made the announcement to MPs on Tuesday but who still had a picture of her supporting the campaign on her website on Wednesday morning. The Tories have branded the decision a "betrayal".

The SNP's Stephen Flynn is one of several MPs who has criticised the government for rowing back on its decision, tweeting: "This Labour Secretary of State is currently stating that her Government will not provide any financial compensation to the WASPI women. They are shameless."

Who are the Waspi women?

Waspi women (Women Against State Pension Inequality) are those who were born between 1954 and 1960 and were affected by the 1995 Pensions Act, which increased women's state pension age from 60 to 65.

Initially, it was planned for the state pension age to increase slowly over a decade-long window so that women could adjust their financial plans. However, the 2011 Pensions Act, brought in by David Cameron's government, drastically shortened that timetable.

Not only was the women's pension age increased to 65 with just two years' notice, but the government also raised the overall pension age to 66 by October 2020 – saving it around £30bn.

Because of the way the increases were brought in, there are an estimated 3.8 million women affected by the changes overall, with 2.6 million affected by the 2011 change.

About 300,000 women born between December 1953 and October 1954 — who were particularly close to their state pension age when the changes were announced — had the shortest time window to prepare for the changes.

The acronym Waspi was coined in 2015 by campaigners fighting for the rights of women affected by the changes. They have called on the government to agree to fair and fast compensation for all women affected by the lack of notice.

Why have they been denied payout?

According to Kendall, it's down to two key factors: the government thinks the amount of compensation is too much to put on the average taxpayer; and that most women knew about the state pension change.

Kendall said the "vast majority of women" knew that the state pension age was increasing and that letters that should have been issued by the government to notify these women of the changes "aren’t as significant as the ombudsman says".

In the statement, Kendall added: “The alternative put forward in the report is for a flat rate compensation scheme, at level four of the ombudsman’s scale of injustice, this would provide £1,000 to £2,950 per person at a total cost of £3.5 billion and £10.5 billion.

“Given the vast majority of women knew the state pension age was increasing, the government does not believe paying a flat rate to all women at a cost of up to £10.5 billion would be fair or proportionate to taxpayers.”

The government accepted the ombudsman’s finding of maladministration and apologised for a 28-month delay in writing to women born in the 1950s.

What did Labour previously say?

Reeves is among numerous senior ministers who backed the campaign when Labour was in opposition.

She appeared in a photograph alongside a group of the women in 2020, holding a placard pledging to work with them towards a “fair solution”.

Sir Keir Starmer and Kendall are among the other Labour frontbenchers who previously appeared in photographs alongside Waspi women to lend their support to the group.

In November 2019, deputy leader Angela Rayner promised Labour would “right that injustice” saying at the time: "Within the five years of the Labour government, we will compensate them for the money they’ve lost. This is their money that they’ve had stolen from them. And any government should act responsibly to these women."

The Conservatives hit out at the “betrayal” of Waspi women by Labour, but shadow business secretary Andrew Griffith acknowledged the Tories might not have offered any compensation either.

He said: “I think every Waspi woman and campaigner genuinely believed that this Government, the Labour Government, had they got elected, would do something.

“They’d all talked about it: Keir Starmer had talked about it, Angela Rayner talked about it, even Liz Kendall, who yesterday said they weren’t going to do a single thing about it, had talked about it.

“So it’s a big issue of betrayal.

“I’m not sitting here saying we would necessarily have done something about it. That’s fair."

What has the reaction been?

Bad, to put it mildly.

In 2019, Jeremy Corbyn's Labour Party pledged to provide compensation for Waspi victims in its manifesto.

Even Kendall herself recognised that the decision would be unpopular, adding that it was "an extremely difficult decision to make".

"I know there are women born in the 1950s who want and deserve a better life, they have worked hard in paid jobs and in bringing up their families,” she said.

The Lib Dems said the decision was a “day of shame for the government”.

Waspi campaigners tweeted: "Just a reminder, @leicesterliz of what you promised. Hard to see how your statement refusing #WASPI women justice today is a "fair solution"."

There has also been dissent inside Kendall's own party.

Labour MP Brian Leishman said he was “appalled” at the decision not to provide financial compensation to the Waspi women.

The MP for Alloa and Grangemouth told the Commons he was "appalled" and that the decision was "incredible let-down", adding: “Waspi women, in my opinion, certainly do not need words of disappointment and they certainly do not need hollow statements. What they need is justice."

"Having heard of the government’s rejection of any compensation for the Waspi women I believe they will consider this to be a betrayal, and I doubt if they will just go away quietly," Former shadow chancellor John McDonnell, who is now an independent MP, tweeted.

Speaking in the House of Commons, Lib Dem Rachel Gilmour MP referred to a constituent of hers, Helen, and 5,500 other women affected by the pension changes, saying Labour had let them down.

She said: “They are not disappointed. They are devastated, as am I, because I mistakenly believed that this Labour government, which was supported by millions of women across this country who rightly turned their backs on the Conservatives, thought you had some probity and decency."

However, some have voiced support for the government's decision.

Jill Rutter, a senior fellow at the Institute for Government, wrote that "given the other demands on public funds, payment would have been really unjust".

“Perhaps the best outcome would be for the government to learn the lessons and move on without paying compensation, but invest a fraction of the sum in increasing women’s financial literacy and ability to plan for their retirement – because although state pension ages are now equal, there is still a big gap on overall income in retirement," she wrote in a blog for the think tank.

What other compensation has been awarded recently?

The government has unveiled several payout packages over the last year.

Compensation packages for victims of the Post Office Horizon and infected blood scandals were announced in the autumn Budget.

In October, Rachel Reeves put aside £1.8bn to compensate around 900 sub-postmasters who were wrongly convicted under the Post Office Horizon scandal.

Another £11.8bn will be given to victims and families of the victims affected by the infected blood scandal. More than 30,000 people who received NHS treatment between the 1970s and early 1990s were infected with contaminated blood. Many contracted a number of viruses including hepatitis C and HIV, with some 3,000 dying as a result and survivors left living with lifelong health implications.

The first payments were made earlier this month.