The argument seems to be that the cost of fixing is too high or that admitting that something is unfair or arcane could open the floodgates to further claims.
It is true that the cost of correcting institutional mistakes can be high and because there is no magic money tree, all citizens end up paying. That is life and I argue that it is better for all of us to bear a little pain to avoid a huge burden on the few who don’t have big shoulders. And when you see firsthand the real-life consequences of injustice on ordinary people, unless you have a heart of stone, you want to make things better quickly.
As I write, we have just seen the Parliamentary Ombudsman’s ruling on the WASPI situation. While I don’t buy the arguments of WASPI, the Ombudsman has clearly found that DWP handled the change in state pensions age for women rather badly. No one argues against the retirement age increasing, but it is unfair to not make it very clear to affected women what the accelerated changes would mean for them. It is very easy to say that the affected women should just work for longer. That’s ok if, like for me, that option is available, but even though I work in the pensions industry, I somehow missed that my state pension would be later again with the second increase. I sucked it it up because I can, but changing the goalposts mid game is never a good look. Apart from the trust issue, the changes have also made a lot of middle aged and younger people fear that they will never get a state pension (I suspect they could be right) but the WASPI determination seems to have reignited the generational unfairness arguments.
While WASPI is in the news today, injustice remains out of reach for many others in the pensions and investment space. I have been campaigning for a fair solution for the taxation of victims of pensions and investment scams for seven years now. Occasionally I get a little boost when I think my message is getting through to government only for it to be dashed later when it gets kicked into the long grass.
We are all horrified by the experienced of the Sub Postmasters, who have been fighting for years for redress for the serious harm done to them. It took a TV production to raise enough awareness and public sympathy to shame parliament into taking some action. Overnight changes to the law were mooted, but of course, the machinery grinds on without an answer. While the pension scams issue is not the same as the post office scandal, it is a symptom of the same institutional mindset.
One of the problems faced by pension and investment fraud victims is that there is a collective sense that they deserve to be punished because they did something they shouldn’t have. They broke (rather complicated) tax rules and the law exacts a price. Unfortunately, that price is having to pay tax on money they no longer have some 14 years later. The key factor which is constantly ignored is that the victims also lost their life savings because of proven dishonesty by a third party.
Many people and HMRC say, “well they got some money out of the deal, so they’ve had a benefit”. I don’t disagree with this, but firstly, the tax man could not decide how much tax was due, so simply made a protective claim to give them time to work out the proper charge. It has taken more than a decade for them to do this. Over those long years interest has been added to those claims at a penal rate, meaning that in some cases, the tax bill has now doubled. Secondly, these are victims of crime and not tax avoiders. The perpetrators have gotten away free while the victims are treated very badly. This is the injustice.
Solutions have been proposed to HMRC and government for many years and the failure to listen is frustrating. I despair at the amount of taxpayers’ money that HMRC is spending to pursue a few £ million in total in tax-take that will cause extreme hardship to victims, yet will happily write off £ billions in fraud and tax in other well-publicised cases. I would seriously criticise a company’s judgment for taking such a stance. Victims have no help other than the pro bono work done by me and a small handful of others.
Even though I have waited a lot longer than expected, without complaint, to get my state pension, I hope I can finally reach retirement with a tick in the box for righting a pension wrong and helping the little man (and woman) get justice.
Margaret Snowdon, Chair of PSIG
