Revised figure doubled for ” men only national insurance subsidy”
The Department for Work and Pensions has revised the estimated number of men over 60 who received what are known as ” auto credits” towards getting a full pension from 4.65m to 9.8m between 1983 and 2018.
The 4.65 million figure was already staggeringly high but the new figure is more than double the number previously disclosed. It is also well over double the number of 1950s born women who are currently waiting for their pension for up to six years.
The scale of the payments has been kept quiet by the Department for Work and Pensions for 37 years. It was only revealed last month when Myfanwy Opeldus, one of 3.8 million women facing now a six year delay to get her pension, got the admission from the ministry through a Freedom of Information request.
Letter issued after court hearing
Yesterday the Department for Work and Pensions wrote to her again raising the figure to 9.8 million. The letter came just after the Court of Appeal hearing into the judicial review this week heard about the plight of women affected by the rise in the pension age and was told by Michael Mansfield about the men receiving ” auto credits” which was not known at the time of the first judicial review.
The new disclosure makes it even more galling for the women who were originally promised they would have their national insurance contributions paid between 2010 and 2018 only to have the offer withdrawn a year before it was due to start. A number have had to pay thousands of pounds to make up the sum for a full pension while others simply have not been able to afford it.
The letter does say that not all 9.8 million men would have benefited as some would have died, others would have full insurance records and some would have been working abroad.
enormous subsidy for men
Nevertheless the scale of the subsidy must be enormous and a benefit for people years after it was offered by Sir Geoffrey Howe, the Chancellor of Exchequer in 1983, to encourage men to get off the dole to keep the very high unemployment numbers down at the time.
This story seems to get worse and worse so let us hope there will some justice from the courts for all the women concerned.
Judges are inscrutable. Like wise old owls you can never be sure what they are thinking. This week’s two day hearing of the Court of Appeal into the rejected judicial review on behalf of 3.8 million women born in the 1950s who saw their pension age rise from 60 to 66 was no exception.
However the proceedings were extraordinary for a number of reasons. For a start the introduction of new technology clashed with the traditional proceedings of the courts.
Hit by Covid 19, the Court of Appeal decided that ” public interest ” in the case was so great that it should be live streamed with some of the judges and lawyers contributing via video link. They were justified with audiences over 2000 peaking at one point to just below 4000 – Court No 71 could never hold anything near that number ever, Covid 19 or not. Now two days later it has been seen by over 16,000 people.
For the first day it worked. But during the second day it ran into a number of technical problems -including cutting people off. And at the very end of the day the technology fizzled out for me so I didn’t see the very last part of the hearing . I have now seen it and Michael Mansfield makes a strong defence of why 50s women have been so badly affected by the delay in the pension age, citing one case where a woman contemplated suicide. He also emphasised the failure to notify people properly, saying there was a common law duty to do so.
Henrietta Hill was questioned by the judges about indirect and direct sex and age discrimination and how the lawyers saw their case being applied.
The judges reserved judgement which means it could be a few months before there is a decision.
Judges were engaged
The three judges presiding over the hearing were engaged with the debate.. The Master of the Rolls, 69 year old Sir Terence Etherton, is also president of the Property Bar Association and chairman of the Trust Law Committee and a visiting professor at Birkbeck College. In his youth he was a fencer and a member of the GB International Fencing Team, including being selected for the 1980 Olympics in Moscow.
Lord Justice Sir Nicholas Underhill, 68, is a former president of the Employment Appeal Tribunal so well versed in complex cases. He also is a former Attorney General to the Prince of Wales.
Lady Justice Dame Vivien Rose,60, is the most recently appointed appeal judge of the three, is an expert in EU and UK competition law, tax, has been a Treasury legal adviser and held a post in the Ministry of Defence as Director of Operations and International Humanitarian Law during the Gulf War. Unlike the other two judges, who were educated at public schools, she was educated at a London comprehensive school and is the first lawyer in her family. She also sings in a choir.
Given this expertise of the judges it was extraordinary that Sir James Eadie, QC, the Treasury First Counsel, nicknamed the ” Treasury devil” should try to get the Judicial review declared unlawful.
He was building on the questioning in the previous judicial review which raised whether Ms Justice Dame Beverley Lang was right in granting the judicial review for the 3.8 million women in the first place.
He was shot down with a rapier like comment from the Master of the Rolls who pointed out he could have raised this immediately after her judgement at a special hearing and again when the judicial review was heard.
” Not in my brief” -Sir James Eadie
His reply was “it was not in my brief from the DWP ” and talked about ” the bigger picture”. My interpretation of that is Amber Rudd, then works and pensions secretary, would have been well aware that to strike out a review for 3.8 million women would have been political dynamite and caused widespread furore well beyond the actual case.
But Sir James persisted citing judgments which said that the case could have been held in 1995 as soon as the Pension Act was passed. Michael Mansfield,QC dealt with that claim in his summing up.
What is important is that the judges were really engaged with the arguments and tested both sides equally. They looked at the notification ( or non) notification issue of the pension age rise, listened to the arguments involving EU law and the relevance of the UN Convention of the Elimination of Discrimination Against Women and noted the auto credits issue which allowed 4.6 million men over 60 from 1983 to 2018 to have their national insurance contributions paid by the state.
Sir James Eadie’s tactics seem to be to try and get most of the case law raised by Adam Straw and Henrietta Hill for the 50swomen ruled as irrelevant.
At one point the Master of the Rolls intervened to point out to Sir James that Adam Straw’s argument about one particular case was aimed at making a specific legal point not about the content of the case.
The other DWP tactic was to use out of date information. Sir James used 2011 as the reference for the continuing rise in longevity ( and pension payment costs) – the high point of the increase – ignoring it flatlining since. This I gather was corrected by Michael Mansfield later.
Sir James also got it wrong when he said the purpose of the case was to reduce the pension age to 60 for all women. It isn’t. It is to fully compensate the 3.8 million women who feel cheated about waiting six years for a pension and not being properly told about the change.
The DWP switched tactics over the economic plight of the 1950s women – in the original judicial review he made great play of the fact they were not worse off but some were well off.
This time he acknowledged that 1950s women faced economic disadvantages and social ills but these, he argued, were nothing to do with the raising of the pension age.
For people watching this case it must have seemed a bit arcane that it is based on case law rather than – though Michael Mansfield did highlight their catastrophic plight – going into detail of the hardships of 50swomen. Full statements on the hardships faced by the two women cited in the case were passed to the judges by Michael Mansfield.
Now for a judgment. The point of a judicial review is to question the administration of a policy to see if it was fit for purpose and had not disadvantaged people.
Therefore don’t expect a judgement ordering the women must have all the money. But you could expect a judgement saying the system cheated them which will have to lead to action by the government to redress the matter.
Either way win or lose the BackTo60 campaign will be considerably enhanced by the outcome of this case – because it highlights the women’s plight and will be a force to reckon with. Going to law is much more powerful than trying to persuade MPs.
After all very few campaigners can claim to have their case examined by the Master of the Rolls and I know BackTo60 lawyers are delighted that they got an appeal on all the points they raised in the first judicial review.
Today the National Audit Office produces a timely reporton the operation of Universal Credit and the impact on claimants of having to wait five weeks to get paid.
It comes when the numbers claiming the benefit has jumped from 2.9m to 6.1 million because of Covid 19.
The report investigates the plight of those needing to claim before Covid 19 struck and it paints a particularly bleak picture.
It is also relevant to the group of 1950s born women whose pension has been delayed from 60 to 66. As the Independent reported separately recently the rise of women making claims for such benefits – soared from 7,578 to 36,527 between 2013 and 2019 – and was almost three times more than men who are aged 60 and over.
What is alarming about the findings – which are an analysis by the NAO of the Department for Work and Pensions own figures – is that many of the people were too frightened to claim and delayed claiming for up to three months after they lost their job.
This damning point is raised in the report. It says:
“Our consultation with claimants and support organisations indicated that a “fear factor” about Universal Credit is also likely to play a part in some people delaying a claim, or not claiming at all. This may result from people hearing about bad experiences from friends, family or the media, for example. Some respondents told us they were worried about whether they would be able to cope during the wait.”
As a result the report says the DWP’s analysis of earning data ” found that almost half(49%) of households who claimed Universal Credit in the four years to mid-2018 had no earnings in the three months before they claimed the benefit.
Taking this into account and the additional five week wait to get the benefit this meant that many had to apply for advance payments to tide them over or go to food banks simply to get food to live which then had to be paid back by deducting it from the meagre universal credit they have to live on.
A particularly revealing table in the report puts together this bleak picture. It shows that an astonishing 80 per cent of all low income people starting to claim the benefit were in serious debt. Some 77 per cent had to rely on advance repayable payments. Another 34 per cent owed money to other government departments – often historic debts. And six per cent had third party debts,like unpaid council tax, child maintenance, rent and water arrears.
Nearly as badly off were claimants with a disabled child, disabled people and carers. Some 65 and 70 per cent had serious debts.
Now as the report shows this is against a dramatic improvement of paying the benefit on time from 55% in January 2017 to 90% in February 2020.
However, as the number of people claiming Universal Credit has grown, the number of people paid late has also increased from 113,000 in 2017 to 312,000 in 2019. In 2019 those new claimants who were paid late faced average delays of three weeks in addition to the five-week wait. Some 6% of households (105,000 new claims) waited around 11 weeks or more for full payment.
Universal Credit expansion delayed
The government has also limited the expansion of universal credit – delaying the final date of switching from other benefits from March 2023 to September 2024 at an extra cost of £1.4 billion to £4.6 billion.
Yet despite spending £39m to try and explain the new benefit to wary claimants the National Audit Office concludes the ministry has a communications problem.
Meg Hillier, chair of the Commons public accounts committee, said: ” too often the most vulnerable claimants still aren’t receiving the money they are entitled to when they need it most.”
Stephen Timms, chair of the Commons work and pensions committee said:
“This hard-hitting report on Universal Credit from the National Audit Office confirms the Select Committee’s concern that that the five week wait for the first payment causes ‘financial hardship and debt’.
” It provides further evidence that the initial planning assumptions for Universal Credit were naive. We now know UC will cost an extra £1.4bn to the public purse. It will take more than twice as long to roll out as originally planned. Far from reducing fraud and error, Universal Credit is driving historic record high levels – more than £1 in every £10 paid through UC is incorrect”
There is one man who has done rather well out of all this. He is “Mr Universal Credit” Neil Couling, who is in charge of the benefit at the DWP. According to the latest DWP accounts for 2019 he received a bonus of £15,000 on top of a salary of between £150,000 and £155,000 a year. He has got pension benefits worth a cool £80,000.
He will be appearing before the Commons work and pensions committee next Wednesday to explain how well he has handled the benefit for the 2.9 million claimants.
Yesterday while all eyes were on Boris Johnson’s ” Build,Build, Build ” speech the Department for Work and Pensions slipped out their annual accounts for the last financial year.
In what looks like a classic “cover up ” job to bury bad news, the ministry probably did not want the world to know that their accounts had been censured for material inaccuracy for the 32nd year in a row.
The reason is the failure of the ministry to be able to account for unacceptable levels of fraud and error in the huge number of benefit payments. Billions of pounds have been overpaid to claimants through fraud and mistakes by claimants and errors by officials. And billions of pounds have been underpaid by officials to claimants because they have made mistakes in calculating people’s benefits.
The latest figures are a record for every year since John Moore, was social security secretary under Lady Thatcher in 1988.
It shows that ” Excluding State Pension, the estimated rate of overpayments has increased again to 4.8% (£4.5 billion) of estimated benefit expenditure, from a restated rate of 4.4% (£3.8 billion).
“The estimated rate of underpayments, excluding State Pension, has decreased to 2.0% (£1.9 billion), from its estimated rate of 2.2% (£1.9 billion) in 2018-19. The rate of overpayments in 2019-20 is the highest estimate to date.”
The worst benefit is the new hated Universal Credit which has suffered from both overpayments and underpayments and claimants have to wait five weeks before they can get it. Since the payment depends on claimants’ monthly varying income the scope for inaccurate reporting of the money is large.
The report says: “For Universal Credit, the estimated rate of overpayments increased from 8.7% to 9.4%. This is the highest recorded overpayment rate for any benefit other than Tax Credits (administered by HMRC), which peaked at 9.7% in 2003-04.”
“Underpayments rates have fallen for Universal Credit, Employment and Support Allowance and Pension Credit, and the estimated rate for Housing Benefit has increased. Personal Independence Payment has the highest rate of underpayments at 3.8% of expenditure in 2019-20. This rate has not changed from 2018-19.”
But the small print of the report also reveals how the Department calculates this. It takes samples of benefit payments to arrive at these figures but the National Audit Office reveals that 61 per cent of the benefits paid out to claimants are based on recalculated estimates for the previous year.
Some other omissions are staggering. The Department has never checked whether payments are accurate for claimants on Disability Living Allowance for 16 years – last done in 2004-05.
More extraordinary the Department has never checked whether money paid out to 12 million pensioners is accurate or not since 2005 – that is 15 years ago.
Instead the department maintains there is no serious fraud or underpayments in pensions – calculating it as just £300 million out of an annual payment of £98.6 billion.
Given this year we had a case this year of a 94 year old pensioner being owed a staggering £117,000 because of 34 years of underpayments, I find this complacency mind blowing.
I also think the National Audit Office, as their auditors, is remiss in not asking for an update.
Next year’s estimate of benefit fraud and error is likely to even more out of kilter thanks to Covid 19 as the ministry have got rid of staff monitoring fraud to be able to pay out the 2.6 million claims for universal credit.
And although the department is said to be investigating 143,000 suspicious claims under Covid 19, it can’t follow them up because it can’t visit them at home.
Gareth Davies, the head of the NAO, said :
“I am concerned that fraud and error in benefit payments have risen again. Fraud and error have a real cost, both for those who face deductions from their income due to overpayments and because it reduces the public funds available for other purposes.
“As the Department takes on a set of unprecedented challenges arising from COVID-19 it is more important than ever that my qualification is not seen as business as usual and the Department responds in a cost-effective way to minimise risks of fraud and error.”
Next year I am certain will be the 33rd year the ministry accounts are questioned and found wanting.
Successive governments extended a 1983 “men only national insurance subsidy” for 35 years and broke a promise to women born in the 1950s to offer them similar terms
More than 4.65 million men aged over 60 have had the last five years of their national insurance contributions paid by the state, the Department for Work and Pensions has disclosed.
The scale of the payments has been kept quiet by the Department for Work and Pensions for 37 years. It was only revealed last week when Myfanwy Opeldus, one of 3.8 million women facing now a six year delay to get her pension, got the admission from the ministry through a Freedom of Information request. She is a BackTo60 supporter and had been pursuing the government over this issue
The scheme was launched by the Thatcher government in 1983 when it was reeling from large scale unemployment even after its popularity had soared through victory in the Falklands War. Extraordinarily the scheme was only wound up in 2018 just two years agoand 35 years after it was launched.
The scheme- called auto credits – was announced in the 1983 Budget by the late Sir Geoffrey Howe , then Chancellor of the Exchequer, as one of four measures to get down the unemployment count which was over three million.
In his March Budget he announced:
“Some 90,000 men between the ages of 60 and 65 now have to register at an unemployment benefit office if they wish to secure contribution credits to protect their pension rights when they reach 65. From April, they will no longer have to do this.
Even if those concerned subsequently take up part-time or low-paid work on earnings which fall below the lower earnings limit for contributions, their pension entitlement will be fully safeguarded. ( my emphasis)”
Unemployment did fall and was half that level by 2018 when the scheme was dropped.
Yet neither successive chancellors Nigel Lawson, John Major , Norman Lamont,Kenneth Clarke , Gordon Brown or Alistair Darling did anything to repeal it.
In fact under Kenneth Clarke in 1993 the opposite happened. He decided as 50s born women were going to face waiting longer for their pensions, they should get some help. This was adopted by Labour in a leaflet issued in 2002 on pensions which announced it would be extended to 50s women from 2010 when the pension age for women started to rise.
But the Brown government then reneged on this in 2009 after the financial crisis.
Promises to 50s women reneged
An explanatory memorandum to changes in pension legislation said :
“When the Government published its plans for state pension age equalisation in 1993, the intention then was that as women’s pension age increased gradually to 65, autocredits would become available to them on the same basis as for men. This was in part to compensate for the increase in the number of years women would otherwise have to pay National Insurance contributions for in order to qualify for a full basic pension.
” This approach has since been reviewed, for two reasons. Firstly, the qualifying age for Pension Credit (the income-related benefit currently payable to men and women at 60 without jobseeking conditions attached) is set to increase to 65 by 2020 in line with female state pension age. Without the proposed change, autocredits would increasingly apply mainly to people who could afford not to work or claim benefit….
“Secondly, the reduction in the number of qualifying years needed for a full basic pension to 30 and the improvements in the crediting arrangements for carers under the measures introduced by the Pensions Act 2007 will mean that the need for autocredits to protect state pension entitlement will be significantly reduced….
” This instrument amends the Credits Regulations to provide that autocredits will be available to men only for the tax years in which they have reached what would be pension age for a woman of the same age, up to and including the last tax year before the one in which they reach age 65. Men born on 6 October 1954 or later,…, will not qualify for the credits.”
This meant it was phased out in 2018.
Meanwhile the new Tory and Liberal coalition elected in 2010 decided to raise the pension age further to 66 and also planned a new pension raising the qualification period to 35 years. The main architect was the pensions minister , Steve Webb, who moved a top job at Royal London Insurance. In an article in the Telegraph in September 2017 he backed men who could have overpaid NI contributions to claim the money back. He is now a financial consultant with Lane Clark and Peacock.
Yet another scandal
Now this entire scandal is yet another example of unfair treatment to 50s women.
The woman who raised this with the DWP is one of a number who has not got enough national insurance contributions to get a full pension. She falls short by three years and will have to pay them £3000 to make up the years to get another £400 a year.
A man – one of the 4.65 million who was covered by auto credits- would have to pay nothing. That is hardly fair. And he could take a low paid job and still not pay NI contributions as they would be covered by the state.
More seriously it does knock a hole in the DWP case that the raising of the pension age was an equality measure to create a level playing field with men.
It is hardly a level playing field if men on this huge scale are getting their national insurance contributions for free. What started as a measure for 90,000 ended up helping 4.6 million. No wonder the DWP were not happy to have to disclose this.
Roll on the appeal to the judicial review brought by BackTo60. Michael Mansfield could have a field day with these new facts.
One of the most disturbing things coming back to the UK after nearly three months is how the country is now gripped in an inevitable lock down without any sign of an exit – as this nasty virus – Covid-19 – takes a grip on the nation.
For women and men in their 60s the situation is particularly dire. They should be protected but are not. Instead they have the problems of either being pushed out of work and put at the mercy of the hopeless and half finished Universal Credit system or the government’s long delayed payments for the self employed for any money.
They know they are a high risk group recognised by the World Health Organisation ( WHO) but they are caught between surviving on savings or going out to work – including for the NHS and in care homes – knowing they stand a greater chance of getting the virus. The two scenarios I illustrated in my article for Byline Times.
But probably the most pleasing thing that happened while I was away was the decision of the Court of Appeal to grant an appeal from the two 50swomen on behalf of BackTo60 on all grounds after the disappointing judicial review decision. which rejected their case.
The women I know have a long wait until July for the hearing but if they hadn’t taken this step they would be nowhere under this present Tory government.
The applicants at the time would not have known how damaging the coronavirus would be but fortunately they got their right to appeal before the courts closed down to hear most new cases. The latest situation at the Court of Appeal can be seen in their latest briefing( April 17).
The fact that BackTo60 has got an appeal on all grounds is significant given the judicial review rejected their case on all grounds and the judge who decided this also wanted to stop an appeal.
Lawyers for the claimants were confident that they could win permission to appeal – and they were right.
At the time detractors – many of whom should have known better – were making wild claims about the crowd funding appeal – which was set at a specific figure on the advice of the lawyers- and trying to stir up animosity against BackTo60. They did not succeed and the result is the issue remains very much alive.
The other key result is that for the government the issue will have to be faced again – ministers have not succeeded in squashing the campaign in the courts. The government knows it will have to argue its case again and 3.8 million women will have a voice at the Royal Courts of Justice to say why they were mistreated and swindled out of their pensions.
I have given a radio interview which is also on BackTo60 and you can listen to it at the top of this blog.
The All Party Parliamentary Group on Women’s State Pension Inequalities is to be revived and will try and persuade the Tory government to make a offer to the 50swomen.
Tim Loughton, Conservative MP for Worthing East and Shoreham, used his response to the Queen’s Speech, to say both he and Carolyn Harris, Labour MP for Swansea, East will approach ministers again to try and get some money. Mr Loughton was returned with an increased majority while Carolyn Harris saw her majority severely reduced.
If the deal is anything like the last one it is likely to cost some £2 billion and probably only cover a small portion of the women who may get £73 a week. Before the election Mr Loughton said as a condition BackTo60 would have to drop its legal action against the Department of Work and Pensions, according to the Daily Express.
He used his latest speech to attack Labour for offering to spend £58 billion over five years to remedy the situation describing it as having ” disgracefully raised false hopes in vulnerable women. “
This is the full extract of his speech on the issue:
“It is an issue that featured rather disgracefully during the election campaign, and it is that of the so-called WASPI women.
Many on this side and, of course, on the other side have championed the case of the 1950s pension women who were hit disproportionately by those changes in the pension age under previous Governments. Many of us have been lobbying the Government to acknowledge that disproportionate disadvantage and to do something about it.
I will call on the Government again and, working with my co-chair of the all-party group on state pension inequality for women, we will continue to put pressure on the Government to acknowledge that and do something about it.
The Labour Opposition’s uncosted promise of £58 billion, which did not appear in their manifesto, disgracefully raised false hopes in vulnerable women.
That amount was almost half the NHS budget, and it was never going to happen. I do hope that we can come up with a realistic, deliverable, doable offer for those women who have suffered and are suffering disproportionately, because that is the right thing to do. “
His speech cut no ice with BackTo60. They are to continue pressing ahead with their application for an appeal in the New Year to get full restitution for the women with the support of the trade unions.
Unison, the largest public service union, are donating £700 to the cause on top of the £80,000 already raised.
Meanwhile I expect some more lobbying from Connect Public Affairs and Waspi to press for a reduced deal. Below is an example sent to me of an earlier lobbying campaign captured in Portcullis House in the House of Commons.
For those who are following the fight by all groups to get compensation for 3.8 million women who have waited up to six years for their pensions, here is a detailed video with John McDonnell, the Shadow Chancellor on how he intends to implement the £58 billion package
There are a number of new points revealed in this video.
Labour is looking at offering both a weekly payment and a yearly lump sum depending on whether the women would like it.
The implementation of the plan would begin as soon as Labour enters government.
Labour has already talked to Whitehall civil servants so they can work up the scheme immediately Labour gets into office.
Every woman will get a letter to prevent the previous debacle under successive governments where women did not hear of the offer
He discloses he has talked to Michael Mansfield, the QC, who is drawing up the appeal for BackTo60 who are seeking full restitution to make sure it cannot be legally challenged.
Labour ruled out means testing the offer because they found it would be complicated and expensive to do this and would delay payments. Bad luck economist Frances Coppola your idea wouldn’t work
Yes it would mean Theresa May and Harriet Harman would get payments – but because it is taxable they will have to pay a big chunk back.
Means testing would also break the principle that it is a national insurance based payment – based on entitlement not a benefit.
He reveals the BBC had great difficulty understanding what the deal was about and why he had decided to pay it.
Finally for tech lovers the end of the video he talks about introducing a national free broadband system – citing a small tech company in a rural area which devises new games – but can’t expand because of the poor quality broadband in its area. He points out this will be a boost for business.
This article unlike my earlier one on the offer of compensation to 3.8 million 50swomen looks at the political moves that led Labour to make this offer which is not full restitution. It asks whether it is going to be a game changer in the 2019 General election? Read it in full on Byline Timeshere.
Labour today broke through the political barrier of just offering tea and sympathy for 3.8 million women who had to wait up to six years for their pensions.
And coming only 24 hours after Boris Johnson announced that the Conservative Party would not give a penny in compensation to any of the women affected by this appalling scandal it is a major advance.
First the positives. It is a huge improvement on the offer available from the All Party Parliamentary Group on the issue co chaired by Tim Loughton, the Tory MP for Worthing East and Shoreham and Carolyn Harris, Labour MP for Swansea,East. The sums are obvious. Tim Loughton is on record of seeking £2 billion compensation, Labour is offering to spend £58 billion over five years.
From what I could gather – despite both MPs declining to answer any of my questions – it would have meant probably only £73 a week on benefit for women who have still not gained the pension in two years time and nothing for the rest, who form the vast majority of people involved.
It is also – and this is very important considering the age of people involved- to start pretty soon if Labour is elected. This compared with the previous APPG proposal with no firm date for implementation and the longer the delay, fewer people would have got anything.
As John McDonnell, shadow chancellor, said: ” “We will introduce it as rapidly as we probably can and we will try to ensure the payments are made promptly. …… we are hoping that people will appreciate the sense of injustice and anger that these women feel about the changes that were imposed upon them.”
And it is helpful for people who had relied on the now outdated married woman’s national insurance contribution to build up their pension entitlement since to get compensation Labour is treating all cases as though they paid the full national insurance stamp which would increase their entitlement.
It is also by far the best offer on the table for the December 12 election as it compares with nothing from the Conservatives and an offer from the LiberalDemocrats toobtain compensation through the Ombudsman.Again that would depend when the Ombudsman considered the caseand whether he decidedto award any compensation.
Now the pitfalls. First it is paid at the rate of £100 a week over five years for all those born before 6 April 1955 rather than a lump sum. It is also taxed. As one of the arguments by the numerous detractors from the private pension industry -is that it should be means tested, very wealthy people will have to return, under Labour, half the payment to the state. Those who are really poor will get it tax free – because there is no tax next year on the first £12,500 of income. And this limit will probably rise over the period.
Second the scheme is complicated and the amount of compensation will be different for each individual.
Broadly it looks as though compensation will rise from a month’s loss of pension (£400) to a maximum of £31,379 for those born up to April 5 1955. It would then gradually fall again until disappearing altogether for those born after April 5 1960. The figure paid out will fall from £100 a week to a lower sum depending on a person’s date of birth from 6 April 1955.
In general terms this means that those born up to April 5 1955 will fare better than those after- though those born in the rest of 1955 will still get high compensation.
What this mean for those born earlier and have or about to get their pension that they will be guaranteed an extra £100 a week for up to five years depending on their birth date.
What the deal is not full restitution given that some women have lost up to £50,000. However Back to 60, have raised enough money through their crowdfunder, to continue their legal action and are seeking permission at the Court of Appeal to appeal the ruling.
The fact that BackTo60 went to the courts prompted Labour to prepare a much more generous offer for the 50swomen – their briefing makes it clear that this was in their mind.
” It’s a one-off historical redress for a historical wrong, so the state will be expected to find the money, just as it would do if the Government lost a court case.”
This is the opposite to the view of Guy Opperman, the pensions minister, who takes the position ” we act within the law” and the defeat means no money need ever be paid.
The fact that both Unison and Unite unions supported full restitution was also hugely influential in Labour’s thinking.
Labour’s manifesto has promised talks with all groups before it is implemented which will give all 50swomen representatives the chance to comment and discuss the implementation of the scheme.
Last night Waspi Ltd – which has not wanted full restitution – and ” We paid in, you pay out ” were advising their supporters to back Labour at the general election.
BackTo60 which never intended to advise its voters which way to vote – will produce a comparative guide to all the offers from the main parties to 50swomen and leave it to their supporters to draw their own conclusions on how they wish to cast their votes.
John McDonnell, Shadow Chancellor of the Exchequer, said “We’ve prepared a scheme to compensate these women for a historical wrong. It’s one that they were not been able to prepare for and for which they’ve had to suffer serious financial consequences for as a result.
“Some of them have been hit by a combination of poverty and stress, having lost out on what they had contributed towards. These changes were imposed upon them by a Tory-led government. So we have a historical debt of honour to them and when go into government we are going to fulfil that debt.”