Rachel Reeves said she understands the disappointment of women affected by changes to the state pension age, but insisted paying them compensation was not fair to taxpayers.
The Chancellor defended the decision not to pay an “expensive compensation package” for the women after she was confronted with her own past support for their campaign.
Ms Reeves is among numerous senior ministers who backed the Women Against State Pension Inequality (Waspi) campaign when Labour was in opposition.
She appeared in a photograph alongside a group of the women in 2020, holding a placard pledging to work with them towards a “fair solution”.
But speaking to broadcasters, the Chancellor insisted not paying compensation was the right decision.
Ms Reeves said: “I understand that women affected by the changes to the state pension age feel disappointed by this decision, but we looked in full at the ombudsman recommendations and they said that around 90% of women did know that these changes were coming.
“And as Chancellor, I have to account for every penny of taxpayers’ money spent.
“And given that the vast majority of people did know about these changes, I didn’t judge that it would be the best use of taxpayers’ money to pay an expensive compensation bill for something that most people knew was happening.”
In March, the Parliamentary and Health Service Ombudsman (PHSO) recommended the Government pay compensation to women born in the 1950s whose state pension age was raised so it would be equal with men.
The watchdog said the women should be paid up to £2,950 each, a package with a potential total cost of £10.5 billion to the public purse, as poor communication meant they had lost out on the change to plan their retirement finances.
The Government has however accepted a finding of maladministration by the PHSO and apologised for there being a 28-month delay in writing to 1950s-born women.
The watchdog has criticised the Government’s decision not to compensate the women.
Rebecca Hilsenrath, the ombudsman, told Times Radio: “It’s great that the Government are saying that our intervention will lead to service improvements and it’s fair to say also that people who come to us, overwhelmingly, are motivated by wanting things to improve for other people.
“But what we don’t expect is for an acknowledgement to be made by a public body that it’s got it wrong but then refuse to make it right for those affected.”
Speaking to Sky News, communities minister Rushanara Ali was repeatedly challenged about previous Labour promises to compensate the women.
She said: “I go back to the point about the lessons that need to be learned, and the fact that this Government has apologised for that delay.
“But we’ve got to focus on the issues at hand, in terms of improving the living standards of pensioners.”
When Labour was led by Jeremy Corbyn, it promised some form of compensation for the Waspi women in both its 2017 and 2019 manifestos.
But the party did not make this pledge during this year’s general election.
He told Sky News: “I think every Waspi woman and campaigner genuinely believed that this Government, the Labour Government, had they got elected, would do something.
“They’d all talked about it: Keir Starmer had talked about it, Angela Rayner talked about it, even Liz Kendall, who yesterday said they weren’t going to do a single thing about it, had talked about it.
“So it’s a big issue of betrayal.
“I’m not sitting here saying we would necessarily have done something about it. That’s fair.
“But the point is this Government has given everybody the impression that they would, and then they’ve come in, and now they’re saying they wouldn’t. That’s a big issue. I can understand people, particularly the Waspi women, feeling enormously let down by that.”
The all-party parliamentary group on state pension inequality for women, chaired by Independent MP Rebecca Long-Bailey and made up of MPs from across the different political parties, is meeting on Wednesday morning to discuss their next steps following the announcement.
Rachael Maskell, Labour MP for York Central and a member of the group, said MPs were “in shock” at the Government’s announcement.
“First of all to make such an announcement just prior to Christmas, and then for the announcement to be what it is,” she added.
