Waspi Compensation Would Wipe Out 1p Income Tax Rise

The £10.5 billion cost of compensation for Waspi women – which Labour has said it is now considering paying out afresh – would wipe out the money raised by a 1p income tax rise, figures show. The Telegraph‘s Rob White has more.

Last year the Government ruled out payments for the 3.5 million women affected by the state pension age increase, but this week said the decision would be retaken in light of new evidence.

The news comes as the Chancellor is reportedly considering an income tax rise as part of the upcoming Budget.

Rachel Reeves is thought to be considering pushing up income tax by as much as 2p across all tax brackets, however she may also cut employee National Insurance by the same amount on earnings taxed at the basic rate.

A 1p increase in income tax would raise £8.6 billion next year, but this would be dwarfed by the estimated £10.5 billion cost of compensating women who say they were affected by changes to their state pension age.

The Women Against State Pension Inequality (Waspi) campaign has long argued that 3.5 million women born in the 1950s were not adequately informed that their state pension age would be equalised with men.

Many waited an extra six years to receive the benefit, which they say hampered their retirement planning and caused them financial harm.

In March last year, the Parliamentary and Health Service Ombudsman agreed and blamed the issue on “maladministration” by the Department for Work and Pensions (DWP), before recommending compensation payouts of between £1,000 and £2,950.

In December, Prime Minister Sir Keir Starmer said that 90% of women knew about the changes and that the country could not afford the suggested payment.

On Tuesday however, Pat McFadden, the Work and Pensions Secretary, confirmed the Government would “retake” the decision after new evidence – a 2007 document from the DWP – emerged as part of legal proceedings challenging the Government’s decision that had not been shown to his predecessor, Liz Kendall.

Worth reading in full.

In the Spectator, Ross Clark says the Government must not give in to the Waspi women’s “scurrilous and opportunistic” campaign.

We are being led to believe that here was a generation of women who had carefully organised every detail of their retirement plans – short of bothering to look up at what age they would become eligible for the state pension. This was a change which led the news bulletins on the day it was announced in 1995, many years before it was due to take effect. The very acronym ‘Waspi’ speaks of unreasonableness – it stands for ‘women against state pension inequality’. Raising the state pension age for women was of course aimed at doing just that – doing away with the perk which allowed women to retire five years earlier than men. …

If Starmer gives in to Waspi women, there really will be no bottom to the pool of claims from Labour’s client groups. They will see how the Government has caved in over the winter fuel payment, personal independence payments, and work out that they can get whatever they demand – and Rachel Reeves will try to pay for it by clobbering the rich (and not so rich, once she has bled the genuinely wealthy dry). The next concession to backbenchers, it seems, will be over the child benefit cap.

Maybe this is how we have to live in Starmer’s Britain: accept that we will be taxed punitively – but dream up ways in which we, too, might get our noses in the public trough.