The Waspi women were lied to

Their campaign became the tool of cynical politicians.

The “Waspi women” – a group of campaigners who have since 2015 argued for compensation for money they lost as a result of changes to the state pension age – were defeated this week. On Tuesday (17 December) the Work and Pensions Secretary, Liz Kendall, announced that the government would not be paying them any compensation, in spite of a recommendation from the parliamentary ombudsman that they should receive up to £2,950 each. For a government with almost no fiscal headroom and a desperate need to fix ailing public services, the £10.5bn cost of offering such compensation was simply unaffordable.

The decision has been met with furious denunciations of betrayal and broken promises. But the real villains here are the people who have used the Waspi women’s cause for their own political gain, such as the novelty Christmas singer, theme park attendee and occasional Liberal Democrat leader, Ed Davey. The complaint of the Waspis is that the change to the state pension age (from 60 to 65) that was first planned in 1993 was supposed to happen gradually between 2010 and 2020. Under the austerity plans of the 2010 coalition government, however, the change was abruptly brought forward to 2018, with the result that an estimated 3.7 million women born in the 1950s lost up to six years of state pension. Ed Davey was a government minister at the time this decision was made. He did not speak up against the 2011 Pensions Bill in any of the debates on it. When Labour MPs proposed an amendment that would have given women born in the 1950s more notice and shorter waits to receive their pension, Davey voted against it.

And yet on Times Radio this week, Davey compared the Waspis – at least 90 per cent of whom, the government believes, knew about the change in the pension age and were able to plan for it – to the 3,000 people who died of liver disease as a result of the contaminated blood scandal, the people illegally deported during the Windrush scandal, and subpostmasters who were imprisoned, bankrupted and driven to suicide by the Post Office. This has been the problem of the Waspi women: there were so many of them, and they were in such a tantalising demographic (older voters have the highest turnout) that they were irresistible to political opportunists. The most egregious lie they were told was probably Jeremy Corbyn’s 2019 offer to give all 3.7 million Waspis compensation averaging £15,000 each, at an estimated cost of £58bn. That’s more than the UK spent on the 2022-23 energy crisis.

Such airy promises were backed up by the great lie of National Insurance. This grand misunderstanding is best summed up by Vera from Wales, who told BBC News this week: “The government stole six years of our pension pot… we’ve paid already and now they are going back on what they said.” Vera and many others appear to believe that National Insurance is a government-run pension pot into which you pay during your working life in order to provide for retirement, as you do with a private pension. This is not what happens. As a worker you pay into the National Insurance Fund (NIF) and the money is handed directly to other people, who have already retired. Of the £145bn the fund receives this year, £131bn will go straight out to today’s pensioners.

The NIF does currently have a surplus (currently £88bn) which is invested in that it is loaned to the Treasury, but it is not invested on behalf of any specific group of taxpayers. This surplus could never be a “pension fund” because it will never hold enough to pay a single year of state pension payments. The current forecast is that the surplus will peak at £105bn in 2032-33 and then sharply decline until, by the mid-2040s, it runs out and the government has to top up the NIF from other taxes to pay the state pension.

The big lie about National Insurance is that it is anything other than income tax (loosely hypothecated, in that it’s only supposed to be spent on one thing) that some people (pensioners and landlords) don’t have to pay. Dressing this tax up as “contributions” to a “fund” has suited many politicians – including Rachel Reeves – because it is one of the easiest ways to raise income tax without having to admit that you’re raising income tax. But there was never a pot into which Vera paid, from which money could be “stolen”.

This was compounded by another bare-faced lie, which was the idea that citizens have a right to compensation for government policy that makes them worse off. This is obviously not true. You can’t claim damages for the Conservatives’ economic vandalism or Ed Davey’s failure to protect you from policy that he will opportunistically denounce a decade later. Lots of people knew this very well, but they continued to indulge the Waspi campaign. The real scandal here is one of a political class that has led millions of women into false hope, knowing full well that the outcome they sought was never going to happen.