Labour may be unable to afford possible £10bn Waspi payout, warns Lord Blunkett
Former Labour pensions secretary Lord Blunkett has said the party may struggle to afford the potential of over £10bn in compensation for the millions of women hit by changes to the state pension.
A damning report into has recommended that the Waspi (Women Against State Pension Inequality) group should receive up to £3,000 each in compensation because of government failures.
The report said it could cost up to £10.5bn to compensate all 3.6 million women born in the 1950s who were affected by the pension age being pushed back.
But neither the Government nor Labour have so far committed to setting up a compensation scheme for the 3.6 million affected.
Lord Blunkett, whose Cabinet jobs included being work and pensions secretary under Tony Blair, told i the costs could prove challenging for Labour if it wins power amid an already tight public purse.
“In an ideal world, some recognition of the mistakes made would be appropriate, but regrettably there are a number of historic injustices and this one will undoubtedly have to be balanced by the shadow Treasury team with competing and valid claims,” he said.
“It is a great pity that this was not dealt with when other major pension changes were introduced in 2012.”
Pressure is also building among Conservative MPs for the Waspi women to be compensated, with Tim Loughton, who previously co-chaired an All-Party Parliamentary Group on the issue, saying the Department of Work and Pensions “should be ashamed” over their handling of pension changes for women born in the 1950s.
“The ombudsman clearly found the DWP were guilty of maladministration, that they’ve not properly communicated these changes with a great number of women. I think they should be ashamed,” he told Times Radio.
“The Government has got to take note. A lot of women have suffered over a long period of time, and many of them have died in quite tragic circumstances, which is why we need recognition for what they’ve gone through”.
Jeremy Hunt said on Sunday that it would “take time” to organise payouts for the millions of women affected, and cautioned that there was “no secret vault of money” to fund such a scheme.
“The money that we were paying compensation has to come from other taxpayers. So we do have to take time to get this fair,” the Chancellor told the BBC.
Mr Hunt also denied that his party was leaving “huge unpaid bills” to the next parliament, insisting that organising the compensation was a “complicated” issue.
“We had the ombudsman’s report on Thursday, but we’ve also had a report from the High Court and Court of Appeal in 2020 that says the Department for Work and Pensions behaved completely within the law and didn’t discriminate,” he said.
“So it appears to say something different and we do need to get to the bottom of that apparent difference between the two.”
Prior to the report, shadow Chancellor Rachel Reeves had warned about the tight public finances her party will face if it wins the next election.
Earlier this month, Ms Reeves said that “we’re not going to be able to turn things around straight away”, However, she insisted that over time her party’s plans for growing the economy would boost public services without the need to raise taxes or borrowing.
The Parliamentary and Health Service Ombudsman (PHSO) concluded last week that there were significant failings in how the DWP communicated that the state pension would rise from 60 to 65 for women, to make it in line with men.
Campaigners say the lack of information meant that some women gave up their jobs, and then suffered financial hardship because they did not have enough to live on in retirement.
