By Professor John Robertson

I came up with this idea several months ago and sent it to the new FM John Swinney but have had no response. It has been warmly welcomed by most SNP members I’ve spoken to and by leading local WASPI leaders. One or two, understandably, have rejected it on the grounds that the UK Government should pay the bill. I understand that but doing at least something before more WASPI women die and, of course, defeating Labour seemed and still seems a bit of a priority for us.

Proposal:

That the Scottish Government introduce a scheme, based on no means-testing, to compensate all of Scotland’s WASPI women by £1 000 per annum for 10 years.

Background:

The 1995 Conservative Government’s State Pension Act included plans to increase the women’s state pension retirement age from 60 to 65. Because of the way the increases were brought in, women born in the 1950s (on or after 6th April 1950-5th April 1960) 3.8 million women were affected. Significant changes to the age they received their state pension were imposed without appropriate notification.[i]

Many WASPI woman are now looking after elderly relatives and grandchildren, in a way far less common among men of comparable age, as well as experiencing worsening health.

Research from Age UK, found 26% of single older women live in poverty compared to 21% of single older men.[ii] The Mental Health Foundation reported that depression affects around 22% of men and 28% of women aged 65 and over, with 85% reporting no help from the NHS.[iii]

Around 270,000 WASPI women, across the UK, have already died before reaching State Pension Age.[iv] Many more will do the same judging by Labour’s reluctance to commit to any compensation once in government. [v]

On the 30^th of April, then First Minister, Humza Yousaf, tabled a motion calling for WASPI women to be fully compensated. [vi]

All 63 SNP MSPs voted for but all of the Labour and Conservative MSPs, sat on their hands, abstained, and shamefully would not support the motion.[vii] Sir Keir Starmer had told his MSPs to commit to nothing.[viii]

The WASPI women may accept £10 000.[ix]

There were estimated to be 335 910 WASPI women in Scotland in 2021.[x] With partners, children, grandchildren and in some cases even great grandchildren, more than a million potential voters could be affected or aware and empathetic toward the WASPI women.

Plan:

While Scotland would struggle to give the estimated roughly 336 000 WASPI women, in Scotland the £10 000 they want in one go (£3.36 billion), perhaps we could make them an offer they might accept.

For £304 million out of the budget each year, we could promise all, no means testing, compensation (in the form of a non-taxable gift?) of £1 000 every year for the next 10 years. Means testing would be both expensive to administer and immoral given the universal nature of the state pension.

Quite a challenging but not a crippling cost, at just over half of 1% (0.56%) out of the current budget of nearly £60 billion per year.

Rationale:

The SNP in Government, these 17 years has often been told, by UK Government ministers and by Holyrood opposition leaders, by trade unions and charities that it already has the power to do something about many serious matters such as, to name only few, tackling poverty, homelessness, staffing levels in hospitals, schools and police stations. It has been told that it can find or raise via income tax, the funds to pay cost-of-living increases to workers across public services.

Despite cuts to funding from the Treasury, limited fiscal powers, no ability to borrow and justifiable anger at having to mitigate Westminster’s economically illiterate austerity policies, waste and corruption, it has done so in all of these areas and more.

The Scottish Government has stepped in to make sure we have far more health workers, teachers and police officers per head than other parts of the UK. It has stepped in to international acclaim to make major inroads into child poverty, homelessness and treatment for alcohol and drug problems.

Recently, but to little media coverage, it has resolved all health sector pay deals to avert all threatened strikes, save a million appointments and uncounted lives.

The shameful treatment of the WASPI women is a comparable priority and deserves comparable treatment.

However, recognising the justifiable anger many will feel at this proposal seeming to let the UK Government ‘off the hook’, the SNP must make clear their intention to recover fully our National Insurance contributions as part of the ‘divorce settlement’ on gaining independence.

Finally, this proposal is not simply an added cost for the Scottish Government but, rather, will stimulate spending and economic growth in Scotland. The research evidence is clear:

“Such payments should be considered for their capacity to affect not just their specific household incomes and living standards but also the economy as a whole. In this context, the economic notion of the ‘multiplier’, which in turn depends on different groups’ propensities to spend their incomes at the margin and to spend on imported goods and services, is significant. The greater the extent that a particular pound of income is recirculated around the economy by the purchase of UK products, the higher the positive impact on national income and economic activity. For instance, the poor and mothers of young children have a higher propensity to spend every ounce of income on essentials, and the impacts in the marketplace will be greater than an equivalent cut in income tax for the richest in society.” [xi]

Paying for this:

While it is not necessary that proposals to make payments always require the proposers to identify income sources to pay for them, and the Scottish Government is best place to balance the books overall, I suggest the following might be explored and, at the same time, agreeable to the membership and the wider electorate.

First, we should tax private education. In 2023, Labour proposed removing tax exemptions, but Sir Keir may have u-turned on that since. The Institute for Fiscal Studies (no lefties themselves), estimated £1.6bn tax revenue per year, so around £160 million in Scotland. They were most enthusiastic making this key point:

“If demand for private schooling reduces as a result of increases in post-tax fees, the additional tax revenue raised would likely be unaffected. This is because any reduced revenue from VAT on private school fees will likely be made up for by higher VAT revenues on other goods and services, holding overall consumer spending constant. If parents decided to stop paying for private school fees as a result of the extra VAT, this would release spending on fees that would likely be spent on other goods and services, thereby generating extra VAT revenues.” [xii]

We might also, increase the Land and Buildings Transaction Tax on high-end properties.

Best of all, we might embrace the recent STUC proposals to raise £3.7 billion from a wealth tax and private jet levy. [xiii]

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[i] https://www.waspi.co.uk/background-information/

[ii] https://acrobat.adobe.com/id/urn:aaid:sc:EU:a1d67482-348a-48af-86fb-a92334950473

[iii] https://www.mentalhealth.org.uk/explore-mental-health/statistics/older-people-statistics#:~:text=Depression%20affects%20around%2022%25%20of,at%20all%20from%20the%20NHS

[iv] https://moneyweek.com/personal-finance/pensions/waspi-women-compensation

[v] https://twitter.com/SaulStaniforth/status/1771838709215707446?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1771838709215707446%7Ctwgr%5Ec3549c678d5ddd048318498b06f2afd0f374c661%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fgraemedey.info%2Flabour-ditches-commitment-to-waspi-women%2F

[vi] https://www.scottishparliament.tv/meeting/scottish-government-debate-waspi-women-against-state-pension-inequality-may-1-2024

[vii] https://www.parliament.scot/chamber-and-committees/votes-and-motions/S6M-13041

[viii] https://www.thenational.scot/news/24295937.scottish-labour-msps-believe-uk-bosses-ordered-waspi-vote-abstention/

[ix] https://www.ftadviser.com/pensions/2024/02/19/potential-10k-compensation-a-lifeline-for-waspi-women-says-broker/

[x][x] https://commonslibrary.parliament.uk/research-briefings/cbp-7405/

[xi] https://reidfoundation.scot/portfolio-2/the-case-for-universalism-an-assessment-of-the-evidence-on-the-effectiveness-and-efficiency-of-the-universal-welfare-state/

[xii] https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending

[xiii] https://www.thenational.scot/news/23964995.wealth-tax-private-jet-levy-raise-millions-public-sector/