#WASPI – did we fail in our duty of care?

WASPI

The WASPI debate that will happen tomorrow is of some significance. Not only will parliament be debating the particular circumstances of a particular group of women, they will be deciding whether the duty of care Government has, to keep its citizens properly informed of changes in welfare provision, was properly exercised. Further than this, it is a debate around whether a future Government is responsible for reversing actions taken (or not taken) by previous Governments, on a retrospective basis.

As most people reading this will not be experts in the legislation, here is the background to the debate.

The Pensions Act 1995 provided for the State Pension age (SPA) for women to increase from 60 to 65 over the period April 2010 to 2020.

The Coalition Government legislated in the Pensions Act 2011 to accelerate the latter part of this timetable, so that women’s SPA will now reach 65 in November 2018. The reason was increases in life expectancy since the timetable was last revised. It had initially intended that the equalised SPA would then rise to 66 by April 2020. However, because of concerns expressed about the impact on women born in March 1954 who would see their SPA increase by as much as two years as a result, it decided that this should happen over a longer period, with the SPA reaching 66 in October 2020.

Some women born in the 1950s argue they have been hit particularly hard, with significant changes to their SPA imposed with a lack of appropriate notification. However, the Government has said it will not revisit the 2011 Act timetable.

There was a Westminster Hall debate on the issue on 2 December 2015. In a backbench business debate on  7 January 2016, the House voted in support of a motion tabled by Mhairi Black calling for transitional arrangements for women negatively affected by SPA equalisation. However, such motions are not binding on the Government. 1 February 2016, there will be a debate in Westminster Hall on a petition by Women Against State Pension Inequality

If you want to be familiar with the wider context of the debate -overseas comparitors, the history of communication as well as the key statements made in last twelve months – here is the document you must read. (you need to click the box at the bottom of the page for the PDF)


 

If you read this Parliamentary Briefing Paper on the State Pension age increases for women born in the 1950s (published 29th Jan), you will see that the decision taken to adjust the timetable of reform in 2011 was a very messy business.

Here is the “mea culpa” made by Steve Webb late last year on

We made a choice, and the implications of what we were doing suddenly, about two or three months later, it became clear that they were very different from what we thought […] And so that’s a decision that we got wrong, and in the end I had to go to Number 10, sit around opposite the Chancellor and the Prime Minister trying to get billions of pounds back. So this was a measure to save 30 billion quid over how many years, and we wanted 10% of that back to soften the blow, and we got £1 billion back in the end, and a billion quid is a serious amount of money. 23

What Webb;s statement says is all that can be said, that Government is imperfect and that from time to time imperfect decisions get taken. The implementation of the new SPA for certain women was badly done and the fix was a bodged job  – and that is that


What is done is done- and should not and cannot be undone

You will also read that whatever the Government did to communicate the change was thought proportionate at the time.

The fact is that the £2bn which Webb feels should have been used to soften the blow is now allocated to something else, the money is spent. That something else is presumably sorting out another problem. Restitution -even a relatively small restitution such as the transitional arrangements some are calling for, comes at a price that must be paid by others.

I feel quite strongly that we have a system of Government that- though imperfect – in not institutionally unfair. We need to be Governed and we elect people to Govern us through a proper democratic process. We must abide by the consequences of that process- no matter how imperfect.


 

And what will be done in future may not be done any better.

 

You will also read that whatever the Government did to communicate the change was thought proportionate at the time. The distribution of leaflets, the writing of letters, the placing of articles were thought by the DWP to be the proper means of communication of the 1995 and 2011 changes.

There are many changes to come for the state pension- most especially about the state pension age. The Government won’t get all those decisions right either. That’s because the assumptions made on how long people live, what the cost of pension increases will be and what the impact of immigration and emigration will be- cannot be predicted.

Government is imperfect. And what is more communication is imperfect. We may be able to reach a proportion of those in their fifties and sixties by post , but many will not open the letters. We can put Workie like adverts on TV , but many will not watch them. No Government has a foolproof way of telling everyone what is going on.

In the end, we must accept that we- the citizens are responsible for finding out what is going on. This is fundamental to the process and the duty of care we have towards ourselves is greater than the duty of care from the Government.


 

Under-informed is not the same as being misinformed

No one is saying that what information the Government put out was wrong. Some are saying it was ineffective.

By comparison, much of the information put out by the private sector about personal pensions was clearly wrong, advisers and insurers did not properly explain what would happen on early termination and sometimes they lied.

I hope that this distinction will be made in tomorrow’s parliamentary debate.

No matter how we feel about the job done in 1995 and 2011, we should not consider there a plot to deliberately disadvantage certain people, nor should we conclude that anyone was mis-selling what was going on.

The adjustments may have been a bodged job and the communication under-cooked, these are legitimate observations that may and probably will arise from tomorrow’s debate.

But to assume, as a result of such admissions, that we can roll back the reforms is wrong. We must accept whatever decision is taken by the Government on this – whether we like it or not and move on.

What we can learn

What WASPI is doing is bringing to our attention, the lack of attention we pay to critical decisions being taken on our behalf by those we pay to take them.

The process of consultation about those decisions is part of Open Government and we all have the opportunity to participate and influence debate by arguing from our corner.

The big pension decisions about to be taken on tax, national insurance – on the governance of the private pensions we put our savings into and the way the workplace is used to collect this money- are all open to our influence.

Social media- which allows this blog to be read every day by thousands of people, is part of that process.

We can learn how our retirement can be funded, and how to do the best to make ourselves comfortable. We can learn how taxes can be fairly used to provide fairness across generations and we can learn what we are due and when,

Most importantly, we can learn from WASPI the importance of planning ahead and paying attention to the pension. Which is why I am very grateful to the WASPI women.

I think we have failed in our duty of care and are continuing to do so, but that duty of care is to ourselves, and that is what WASPI can change.

 

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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5 Responses to #WASPI – did we fail in our duty of care?

  1. John Moret says:

    Henry,
    You & I will never agree on this. I make just three points:
    1.The DWP communication in January 2012 to those affected by the 2011 changes simply stated the revised SPA – no reference to the previous SPA so unless you were in the know you had no idea of the extent of the change. It also had a prominent section “What do I do now?” which started “You do not need to do anything just yet.” Clearly unhelpful and arguably misleading.
    2. Our current Pensions Minister when she was Director General of Saga wrote a paper whilst the 2011 changes were being discussed in which she said: ” Ministers must listen to reason on this issue. The current plans are unfair and may, indeed, be illegal in public law terms, since they clearly do not give women adequate notice of the large changes in pension age that they face.”
    That comment was made before the small concession to limit deferral to 18 months was introduced but I think it’s disingenuous to suggest that the concession corrected the unfairness and other flaws in the communications and methodology.”
    3. The Saga paper suggested a fairer method which was to regraduate the increase in SPA to age 66 by deferring the equalisation from October 2020 to April 2022 -and at the same time bring forward the start date of SPA equalisation at 67. This is currently scheduled to kick off in April 2026 and move to 67 within two years. By bringing the start date forward to 2022 the increase would be far more gradual and the savings would go part way to offsetting the costs of delaying the SPA66 equalisation. That to my mind is a fairer solution to all the cohorts involved.
    Unfortunately I fear that the politicians have dug themselves into a big hole on this issue from which an escape will be difficult.
    John

  2. henry tapper says:

    I agree with your first sentence – but as my blog points out – there are fundamental issues about personal responsibiity that run deeper than the unfairness of the current transition mechanism,

  3. Henry,

    I would like to bring to your attention another big injustice about to happen with the introduction of the new state pension on the 6 April 2016 which will affect over 15 million people.

    As far as I am aware the DWP has not or is not going to write to anyone about benefits that are going to be lost . ie Loss off inherited and derived rights, minimum number of years Ni (10) require to receive any pension,and no GMP increases paid by DWP after a person reaches state pension age.

    When Ros was questioned at the Work and Pensions Committee she said that they were not going to write to anyone about the changes due to data protection act.

    The DWP and the Government have a short memory as they seem to have forgotten about the disaster they had with the introduction in inherited SERPs which was due to start in 2000 and had been announced 15 years earlier

    I think it was Age UK that contacted the Government in 1998 to tell them that the DWP were not mentioning in their booklets that inheritance of SERPS was being reduced from 100% to 50%.

    Because of this the Government had to put of the change off for two and a half years and introduce a sliding scale reduction over a further eight years which came to an end in October 2010.

    They were made to write to 20 million people to tell them if they were affected or not, if they were the people could write in and ask for a personal letter explaining how the change in inherited SERPS would affect them.

    The Government are repeating exactly the same mistake about not telling people about losing inherited SERPS, accept it is worse this time as they are have no intention of telling people about the loss of inherited rights and any of the other points I have mentioned.

    At the time Mr Darling promised that in any future changes to the state pension the Government would give plenty of advance warning which would be accurate and complete.which is definetly not happening with the introduction of the New State Pension on 6 April 2016.

    It seem is very strange to me that none of the pension professionals and pensioner organisations have picked up on this.

    Luckily I wrote to The Public Accounts Committee in January last year about people not being receiving increases on GMPs under the new state pension and received a reply from Margaret Hodge saying that she had the National Audit Office (NAO) look at my letter and they agreed that the GMP information was missing and that the DWP were not telling people about changes that will make them worse off.

    The NAO have been looking at it since then and are about to do a report about loss of GMP increases in the next few weeks, and will be doing another report about lack of information from the Government about changes that will make people worse off. two months later.

    When Frank Field was appointed chair of the Work and Pensions Committee I wrote to him sending him a copy of the letter I had received from Margaret Hodge.

    I think the Margaret Hodge letter triggered of the investigation about the new state pension by the Work and Pensions Committee as it would not look very good if another Government organisation was investigating the introduction of the new stater pension and they weren’t.

    As you can see a ordinary member of the public can instigate enquiries.

    What I can’t understand is how this all got ageed by the previous Work and Pensions Committee.as well as both Houses of Parliament . How could they think two years notice was long enough which is turning out tom be no notice.

    How is it that the unions and pensions industry have accepted it without a murmur?

    • henry tapper says:

      It’s great that you took the time to get this going Chris. I think “ordinary member of the public” is pushing it- if we all had your level of engagement, the problems we are currently experiencing would not have happened.

  4. Pat says:

    Thank goodness for stalwarts like Chris Thompson. Without people like him, we just wouldn’t know and be able to try to get this out right, because of Chris, I have the knowledge and confidence to tackle this with the DWP and take the matter all the way to the parliamentary ombudsman if necessary. Chris deserves a medal for his diligence, persistence and hard work!

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