UK politics: government likely to have to ‘pay some Waspi compensation in election year’ – as it happened

Mel Stride, the work and pensions secretary, is likely to make a statement to MPs about the PHSO’s report into Waspi women next week, Penny Mordaunt, the leader of the Commons, told MPs this morning.

After Labour’s Justin Madders said Stride should come to the Commons tomorrow to respond, Mordaunt said there would not be many MPs in the parliament tomorrow and so a statement next week was more likely.

Angela Madden, who chairs Women Against State Pension Inequality (Waspi), the group campaigning on behalf of women who lost out because the rise in their state pension age was not properly communicated to them, has said it is “unbelievable” the Department for Work and Pensions is resisting paying compensation.

In a statement about the report from the Parliamentary and Health Service Ombudsman (see 10.51am), Madden said:

The DWP’s refusal to accept the clear conclusions of this five-year-long investigation is simply unbelievable. One of the affected women is dying every 13 minutes, and we just cannot afford to wait any longer.

Now that the PHSO findings have at last been published, all parties owe it to the women affected to make a clear and unambiguous commitment to compensation.

The ombudsman has put the ball firmly in parliament’s court and it is now for MPs to do justice to all the 3.6 million women affected.

The report at least finds that level 4 compensation is required, but politicians across party lines have previously supported level 6 – which would far more clearly and reasonably recognises the injustice and loss of opportunities suffered.

We are now looking to those who have supported us over the years to put their money with their mouth is and back us on a proper compensation package. All the parties are now in the spotlight with Waspi women watching and waiting to see how they should best use their votes in the coming general election.

Level 6 compensation would mean payments worth £10,000 or more, in recognition of “a profound, devastating or irreversible injustice where the person has been affected permanently”. The PHSO is recommending level 4 compensation. See 11.19am.

The average annual council tax bill in England will rise by £106 this year as local authorities seek to maximise revenue to pay for struggling frontline services, PA Media reports. PA says:

The bill for an average Band D property will increase by 5% to £2,171, with all of the 153 upper-tier councils applying some or all of the social care precept of 2%, according to statistics released by the Department for Levelling Up, Housing and Communities.

This means the overall council requirement in England is £41.2bn, an increase of £2.5bn on 2023/24, while average annual bills have risen by 20% since 2020/21.

There is regional variation in average council tax bills which include social care and parish precepts.

In London the average annual bill for a Band D property will be £1,422, an increase of 5% on 2023/24.

Metropolitan districts outside London will see an average annual increase of 5.4% to £1,837, while bills in unitary counties with no districts will rise 5% to £1,886.

Meanwhile, the average bill in other county areas will increase by 5% to £1,643, with districts in these areas adding an additional £266.

Annual council tax increases remained below 1% between 2010 and 2015, but rose to 5% for the first time in 2018/19.

The PHSO report (see 10.51am) says that Waspi women entitled to compensation should be paid compensation “at level 4 of the scale”.

That means a payment of between £1,000 and £2,950, and is intended to compensate for “a significant and/or lasting injustice that has, to some extent, affected someone’s ability to live a relatively normal life”.

And this is what the report says about how a compensation scheme could be set up.

As a matter of principle, redress should reflect individual impact. But the numbers of people who have potentially suffered injustice because of the maladministration, the need for remedy to be delivered without delay, and the cost and administrative burden of assessing potentially millions of individual women’s circumstances may indicate the need for a more standardised approach. HM Treasury’s ‘Managing Public Money’ requires compensation schemes to be efficient, effective and deliver value for money. It also says the administrative costs associated with compensation schemes should not be excessive.

Parliament may want to consider a mechanism for assessing individual claims of injustice. Or it may consider a flat-rate payment would deliver more efficient resolution, recognising that will inevitably mean some women being paid more or less compensation than they otherwise would.

We recognise the very significant cost to taxpayers of compensating all women affected by DWP’s maladministration. Compensating all women born in the 1950s at the level 4 range would involve spending between around £3.5bn and £10.5bn of public funds, though we understand not all of them will have suffered injustice. Our Principles for Remedy acknowledge that public bodies need to balance responding appropriately to people’s complaints and acting proportionately within available resources. But they also say finite resources should not be used as an excuse for failing to provide a fair remedy.

The PHSO report (see 10.51am) does not seem to be available online yet, but here are extracts from the passage in the report summarising its findings.

On the DWP’s failure to tell women properly about the planned rise in the state pension age for women

We find that timely and accurate information was available about changes to the number of qualifying years needed for a full State Pension as a result of the 2014 Pensions Act and the introduction of the new State Pension. This includes information about how someone’s individual National Insurance record links to how much State Pension they can claim once they reach State Pension age. Research showed the majority of people knew about reforms to the State Pension brought about by the 2014 Act.

However, research also showed that too many people did not understand their own situations and how the new State Pension affected them personally. The gap between awareness and understanding was highlighted by the Work and Pensions Committee and the National Audit Office. DWP did not adequately use this research and feedback to improve its service and performance. In this respect, DWP did not demonstrate principles of good administration. That was maladministration.

On how DWP handled complaints

We find that some aspects of DWP’s complaint handling reflected applicable standards, including that information about how to complain was easily available and that it took a proportionate approach to similar complaints. But DWP did not adequately investigate or respond to the complaints it was considering or avoid unnecessary delay. In these respects, DWP did not demonstrate principles of good complaint handling. That was also maladministration.

On how the independent case examiner (who handles complaints not resolved by the DWP) handled the matter

We find that ICE’s complaint handling reflected applicable standards and guidance. ICE acted within the scope of its remit, which is set out in its contract with DWP. We note, however, our view that the contract meant ICE could not address complainants’ key concern that they did not have as much personal notice of changes to their State Pension age as they should have. 11. We do not consider there was sufficient evidence available for ICE to conclude that DWP had written to individual complainants who said they had never received a letter about their State Pension age. We do not, however, consider this shortcoming means there was maladministration in its complaint handling overall.

On the injustice suffered

We find that maladministration in DWP’s communication about the 1995 Pensions Act resulted in complainants losing opportunities to make informed decisions about some things and to do some things differently, and diminished their sense of personal autonomy and financial control. We do not find that it resulted in them suffering direct financial loss.

We find that maladministration in DWP’s communication about National Insurance qualifying years did not lead to an injustice for the sample complainants.

Before 2016, people built up ‘qualifying years’ towards a Basic State Pension by paying National Insurance or through, for example, receiving benefits credits towards their National Insurance record. Some people paid National Insurance to build up entitlement to an earnings-related State Pension on top of the Basic State Pension. The earnings-related State Pension was called the Additional State Pension.

Not everyone paid National Insurance towards the Additional State Pension. Some people who joined personal or workplace pension schemes ‘contracted out’ of the Additional State Pension when they joined those schemes. While they continued to build up qualifying years for a Basic State Pension, they gave up their entitlement to the Additional State Pension for the period they were contracted out because they contributed less into the National Insurance system. So a person who had always contracted out would have been entitled to the Basic State Pension and their personal or workplace pension when they reached State Pension age, instead of being entitled to the Basic State Pension and Additional State Pension.

From 6 April 2016, the new State Pension replaced the Basic State Pension and the Additional State Pension. The full rate of the new State Pension is higher than the full rate of the old Basic State Pension. People who were contracted out of the Additional State Pension before 6 April 2016 but have reached, or will reach, State Pension age on or after 6 April 2016 may not be eligible for the full rate of new State Pension. A ‘contracted out deduction’ is made when calculating their starting amount of new State Pension to reflect the periods when they contributed less into the National Insurance system in return for a personal or workplace pension.

Transitional arrangements introduced with the new State Pension mean the starting amount of the new State Pension for the complainants - and people like them – is no less than what their starting amount of State Pension would have been under the ‘old’ rules. The transitional arrangements also allow them to do things to add to their starting amount of new State Pension if it is lower than the full rate. Having looked at the complainants’ individual circumstances, we do not consider they have lost any opportunities to add to their starting amount.

We find that maladministration in DWP’s complaint handling caused complainants unnecessary stress and anxiety and meant an opportunity to lessen their distress was lost. For some complainants, it also caused unnecessary worry and confusion.

On the proposed remedy

When we find that complainants have suffered injustice as a result of maladministration, we would usually recommend their injustice is remedied in line with our Principles for Remedy. When making recommendations for financial remedy, we take account of our guidance on financial remedy and our severity of injustice scale.

While it is unusual for organisations we investigate not to accept and act on our recommendations, we have no powers to compel them to comply. When an organisation does not comply with our recommendations, we can lay a report before Parliament so that Parliament can act to protect citizens’ rights.

What DWP has told us during this investigation leads us to strongly doubt it will provide a remedy. Complainants have also told us they doubt DWP’s ability or intent to provide a remedy. Given the scale of the impact of DWP’s maladministration, and the urgent need for a remedy, we are taking the rare but necessary step of asking Parliament to intervene. We are laying our report before Parliament under s10(3) Parliamentary Commissioner Act and asking Parliament to identify a mechanism for providing appropriate remedy for those who have suffered injustice. We think this will provide the quickest route to remedy for those who have suffered injustice because of DWP’s maladministration. To help Parliament with its considerations, we have set out in this document what we would consider an appropriate remedy.

We say more about DWP’s stance and the basis for our approach in this report.

The so-called Waspi women deserve compensation for what they suffered as. result of the government not giving them adequate warning about the rise in their state pension age, a watchdog has said.

The Parliamentary and Health Service Ombudsman is recommending compensation in a report out this morning.

But the report from the ombudsman says the Department for Work and Pensions has so far refused to consider compensation, and it says parliament should now consider intervening.

PHSO chief executive Rebecca Hilsenrath, said:

The UK’s national ombudsman has made a finding of failings by DWP in this case and has ruled that the women affected are owed compensation. DWP has clearly indicated that it will refuse to comply. This is unacceptable. The department must do the right thing and it must be held to account for failure to do so.

Complainants should not have to wait and see whether DWP will take action to rectify its failings. Given the significant concerns we have that it will fail to act on our findings and given the need to make things right for the affected women as soon as possible, we have proactively asked parliament to intervene and hold the department to account.

Parliament now needs to act swiftly, and make sure a compensation scheme is established. We think this will provide women with the quickest route to remedy.

The Department for Work and Pensions has published a raft of data relating to poverty today.

The most important document is probably this one, the Households Below Average Income (HBAI) report. Alongside the main report, there are also various tables, available here.

But the DWP has also published various other collections of data including:

A report on children in low income families

A report on pensioners’ incomes

A report on family finances

A report on income dynamics, and the persistence of low income

Save the Children says the figures show that the number of children being brought up in relative poverty has risen by 100,000 since the previous year, and has now reached 4.3 million.

It is using the relative poverty after housing costs definition, and it says 30% of children in the UK are poor using this measure. The latest figures cover the financial year ending in 2023.

Meghan Meek-O’Connor, senior child poverty policy adviser at the charity, said:

Today 4.3 million children are being failed. It is an outrage that 100,000 more children are in poverty – they are being forgotten.

These shocking figures should be an urgent wake up call to all of us, especially the UK government: we cannot go on like this. There is no reason children should be going without food, heating, toys, or beds.

Families need an adequate social security system that keeps children out of poverty, and provides them with a basic level of safety and security. The UK government must scrap the unfair two-child-limit, and introduce a ‘child lock’ on children’s social security to protect children from hardship and suffering.

Q: Why won’t Labour commit to rejoining the EU?

Because we had a referendum and the country voted to leave, Starmer says.

But he says the Brexit deal was a bad one. He wants to improve it.

And that is the end of the Q&A.

Q: What will you do about people getting scurvy?

Starmer says he shudders at the thought that someone should even have to ask about this in the 21st century.

He says Labour will have breakfast clubs for schools, which will help ensure children are better fed.

And he wants to bring down energy bills. He recalls being shocked meeting a pensioner who did not get out of bed until lunchtime because her house was too cold.

Q: I work in the NHS and am worried about Wes Streeting talking about the NHS using the private sector. Ear cleaning is something that you cannot get on the NHS anymore. There are claims Starmer and Streeting have interests in the private sector.

Starmer says he is not going to privatise the NHS. It will always be publicly funded, and free at the point of need.

But Labour does support using the private sector to get operations done. That is happening at the moment.

That is not part of a plan to privatise the service, he says.

Q: Some people need their ears syringed twice a year. It costs £80. Can you change that, so that people can get it on the NHS again.

Starmer says he is not across the detail of that. He will look at it.