Labour’s £58bn Waspi pensions pledge ‘immediately breaks manifesto promise’ on borrowing, IFS warns The promise was made by John McDonnell but it is not included in Labour’s manifesto commitments

The Institute for Fiscal Studies (IFS) think tank has said that Labour‘s pledge of £58 billion for women affected by changes to the state pension age would “imminently break” its commitment to only borrow to invest and force it to further raise taxes.

IFS Director Paul Johnson gave his opinion on Labour’s pledge to compensate the so-called Waspi women who lost out after state pension ages for women were equalised with men.

The promise was made by shadow chancellor John McDonnell on Sunday but was not included in their manifesto commitments that were published on Thursday.

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‘The sheer scale of it’

Speaking on BBC Radio 4’s Today Programme, Paul Johnson said the policy’s estimated cost of £58 billion is “a very, very large sum of money indeed”.

He added: “I think there are two interesting things about that – one is the sheer scale of it, and of course it immediately breaks the promises they made in their manifesto just last week only to borrow to invest.

“So, they would need even more than their £80 billion tax rises if they wanted to cover that.

“The other, I suppose, is just a statement of priorities or decisive lack of priorities, because there’s so much money for so many things, but they’re not finding money, for example, to reverse the welfare cuts for genuinely poor people of working wage.

“Whilst some of these Waspi women really have suffered hardship as a result of not realising that this pension age increase is happening, although it was announced back in the early 1990s, many of them are actually quite well off.”

‘Historical debt of honour’

Labour promised to compensate an estimated 3.7 million women who say they were given insufficient time to prepare for the changes brought in by the former coalition government.

Shadow Chancellor John McDonnell said the payments were to settle a “historical debt of honour” to the women born in the 1950s.

The party said the payout could amount to £58 billion over five years – with individual payments averaging £15,380 running to a maximum of £31,300.

‘A historical wrong’

Boris Johnson was challenged by one of the women in the studio audience for Friday night’s BBC Question Time special.

The Prime Minister said that while he sympathised deeply, he could not promise to “magic up that money” for them.

Mr McDonnell said: “We’ve prepared a scheme to compensate these women for a historical wrong.

“It’s one that they were not been able to prepare for and for which they’ve had to suffer serious financial consequences for as a result.

“Some of them have been hit by a combination of poverty and stress, having lost out on what they had contributed towards.

“These changes were imposed upon them by a Tory-led government. So we have a historical debt of honour to them and when we go into government we are going to fulfil that debt.”

Additional reporting by Press Association.