Labour’s decision to refuse compensation to the so-called WASPI Women was inevitable. The payments recommended by the parliamentary ombudsman added up to £10.5 billion, and the Government does not have £10.5 billion lying around.
That’s half a Fiscal Black Hole, and Sir Keir Starmer is trying to reassure people that he isn’t going to mount another tax raid in this Parliament. He certainly will – no government serious about lean years puts those years close to the next election – but even so, the money isn’t there.
It is also, for what it’s worth, the correct decision. Ministers have the right to reject advice from the parliamentary ombudsman for the same very good reason they can reject recommendations from pay review bodies: the Chancellor has to take an holistic view of government spending, and these bodies do not.
The question faced by the ombudsman in this case is what, in the abstract, would be fair compensation for the fact that the WASPI women were not adequately informed of the change in the state pension age? The question facing Rachel Reeves – and any future Conservative chancellor – is whether that compensation is a remotely justifiable use of £10.5 billion, given the opportunity cost.
What do all the Labour MPs queueing up to denounce the decision think should be done? Do they want the Chancellor to find another ten billion pounds’ worth of tax rises, weeks after the last damaging u-turn? Or do they want her to add another ten billion to the savings she is forcing departments to identify?
The same question faces any Conservative who feels like repeating Labour’s mistake and getting on their high horse over this now we’re safely in opposition. It felt similarly easy for Liz Kendall et al to pose for the cheesy prop photoshoot with the WASPI campaigners five years ago, and look how that played out.
Quoted in the Telegraph Helen Whately, the Shadow Work and Pensions Secretary, wisely confined herself to attacking Labour’s hypocrisy:
“It’s no surprise that Labour have broken the promises they made to Waspi women in opposition. Yet again, they said one thing to get elected and are now doing another.
“They shouldn’t expect to get away with this hypocrisy. Instead of trying to blame their decisions on everyone else, for once they should own the choice that they’ve made.”
Fine. But the obvious follow-up to this is asking whether the Tories would pay out. After a shattering defeat and with the next election comfortably distant, the temptation will be to say yes. It must be resisted – but that does limit how much hay the Opposition can make out of this.
But that’s fine, because they don’t need to. Napoleon famously advised to “never interrupt your enemy when he is making a mistake”, and whilst this isn’t a mistake in governmental terms, it is the culmination of self-inflicted political errors and will damage and destabilise the Government without the Conservatives’ input.
For starters, it means Starmer has broken one of those very rare things: an explicit promise in his manifesto. The embarrassing photos might be from years ago, but the election campaign has no such excuse. Labour knew they were heading for power, and had a commanding lead in the polls. Making this commitment, when they had no plan to fulfil it, was stupid.
Moreover, it makes it harder henceforth for the Government to hide behind things like the independent recommendations of pay review bodies, as they did when defending their generous settlements with the public sector unions.
Bureaucracy only protects you if you go along with it – that’s why it’s so alluring for politicians, and so effective at undermining democratic political government. Once you assert your prerogatives as final decision maker, you also lose your shield against the consequences.
Finally, this also just adds to the cross his backbenchers have to bear. The Prime Minister has lots of backbenchers – many more than can reasonably expect government positions. Many of them sit on relatively narrow majorities, as this is the most marginal parliament (in terms of seats) since 1945.
Since July, their party has retained the two-child welfare limit, means-tested the Winter Fuel Allowance, and now to refuse compensation to the WASPI women. This isn’t what they signed up for – spending public money on feelgood causes is part of what being a Labour MP is all about!
How long are they going to wear it? In a couple of years, all the extra spending Reeves’ has managed to find will be exhausted; either the Government will table a couple of very lean budgets in the run-up to the next election or, more likely, it will break its promises on tax in that same sensitive period. The millstones of pensions and the NHS grind exceedingly small.
At around the same time, we’ll have had a reshuffle or two and it will be much clearer to those still on the backbenches whether they’re on the whips’ naughty list – and thus, have scant reason to row in behind the Government on unpopular measures instead of mounting rebellions they can put on their literature.
The critical question for the Conservatives is whether they can manage to look like a credible alternative if and when that point of crisis comes. Careless promises might be an easy way to boost poll share in the short term, but you can’t put the hard questions to ministers if you don’t have an answer yourselves.