Commonwealth Countries: Reciprocal Pension Agreements

(Limited Text - Ministerial Extracts only)

Monday 1st March 2021 Lords Chamber

[Baroness Altmann (Con)]

My Lords, I understand that the Government are in talks with Canada on possible reciprocal arrangements for state pensions uprating. Can my noble friend tell the House whether they are in discussion with any other countries on this issue, including those in the EEA, EFTA and the EU?

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

The Government are currently negotiating social security agreements with the EEA and the EFTA countries—Iceland, Norway, Liechtenstein and Switzerland—which aim to broadly mirror the new agreement with the EU. The UK state pension has been uprated in these countries as part of the long-standing provision which was in EU law before the UK left the EU, and the Government are seeking to continue state pension uprating for those in scope of the new arrangements. The Government are not in discussion with any other countries on reciprocal arrangements for pensions uprating.

[Lord Singh of Wimbledon (CB) [V]]

My Lords, the Commonwealth should be united by a common commitment to human rights and the well-being of all. Sadly, this has been marred by our silence over the brutal repression of the farmers’ dispute in India. Does the Minister agree that reciprocal pension arrangements can help restore the image by, for example, allowing retirement to Commonwealth countries, which will reduce healthcare needs in the UK?

[Baroness Stedman-Scott (Con)]

The UK has different social security arrangements with different Commonwealth countries. While some bilateral agreements provide for uprating, others do not. I am very happy to meet with the noble Lord to discuss this further if it helps him.

[Lord Foulkes of Cumnock (Lab Co-op) [V]]

My Lords, further to the question from the noble Baroness, Lady Altmann, last week some of us met virtually with Canadian MPs and the Minister of Seniors. He told us that a proposal had been put three months ago to the British Government that would provide some pension justice for the 125,000 British pensioners living in Canada but that they have had no reply. When will the Government respond and can the Minister assure us that it will be a positive response that will help both UK pensioners in Canada and Canadian pensioners here?

[Baroness Stedman-Scott (Con)]

The noble Lord is as impatient as ever, and so are we, to resolve this issue. The Government received a request from Canada in November 2020 to conclude a reciprocal agreement to include indexation of pensions. We will be responding shortly.

[Baroness Janke (LD) [V]]

My Lords, people with frozen pensions have often lived abroad for more than 15 years and have also lost their vote. Is it not time that the Government restore democratic rights to these citizens, many of whom still pay their taxes in the UK?

[Baroness Stedman-Scott (Con)]

The decision to move abroad is voluntary and a personal choice dependent on the circumstances of the individual. For many years now, advice has been provided on the GOV.UK website that the UK state pension is not uprated overseas, except where there is a legal requirement to do so.

[Baroness Sherlock (Lab) [V]]

My Lords, during the passage of the Immigration and Social Security Bill, we discussed the case of Monica Philip who emigrated to the UK in 1959. After 37 years working here as a civil servant, she returned to Antigua to care for her mother, at which point her pension was frozen. The Minister told me during that debate that she did not know how many of the Windrush generation are affected by this policy. Do the Government plan to look into this any further?

[Baroness Stedman-Scott (Con)]

I regret that I do not have figures for how many Windrush victims have been impacted. The UK state pension is payable worldwide and members of the Windrush generation who have chosen to leave the UK and have reached state pension age will receive annual index-linked increases if they reside in a country where there is a legal requirement to uprate, such as Barbados or Jamaica.

[Baroness Eaton (Con) [V]]

My Lords, many British pensioners living in the EU have been anxious about their pensions since we left the EU. What action have the Government taken to protect British pensioners living in the EU?

[Baroness Stedman-Scott (Con)]

The state pension has been uprated in the EU as part of long-standing provisions in EU law before the UK left the EU. The withdrawal agreement ensures that state pensioners who had already moved to the EU to retire while the UK was a member state will continue to have their state pensions uprated.

[Lord Dodds of Duncairn (DUP) [V]]

My Lords, more than half a million people are affected by having their pensions frozen while living overseas. The Government have said on a number of occasions that they do not intend to change the overall policy. How can it be right that something so iniquitous and unjust continues to persist, discriminating in respect of which countries people emigrate to?

[Baroness Stedman-Scott (Con)]

The UK Government have continued to honour their legal obligations in relation to uprating pensions overseas. While I realise this will be disappointing, we have no plans to change that policy at the moment.

[Lord Rooker (Lab) [V]]

My Lords, I could not defend this policy when I was the Pensions Minister 20 years ago and I did not, but the Treasury would not move on it and this is a real problem. How is asking people to work around the world but freezing their pensions in 150 countries if they retire consistent with global Britain? It is absolutely unfair and incompatible with being an international nation, as we claim to be. I ask the Minister to think about her answers, because it seems she has given contradictory answers on Canada to the noble Baroness, Lady Altmann, and the noble Lord, Lord Foulkes.

[Baroness Stedman-Scott (Con)]

I am sorry, I do not agree that I have given contradictory answers. I say again that the Government have no plans to change their policy on this. When people retire to different countries, information about the impact on their pensions is made very clear to them.

[Lord German (LD) [V]]

Can the Minister accept that dignity in retirement should exist for all UK pensioners regardless of where they live as a principle? As raised by the noble Lord, Lord Foulkes, and the noble Baroness, Lady Altmann, the Minister in Canada is waiting for a reply from the UK Government. If, as the Minister here says, it is about a reciprocal arrangement, surely this discussion should start urgently, as both the Government and Members of Parliament in Canada seek a resolution.

[Baroness Stedman-Scott (Con)]

As I have already said, the Government intend to respond to the Canadian Government shortly. We are committed to ensuring that older people can live with the dignity and respect they deserve. The state pension is the foundation of support for them.

[Baroness Gardner of Parkes (Con) [V]]

My Lords, what consideration are Her Majesty’s Government giving to unfreezing the state pensions of the 230,000 Britons who have moved to Australia to take into account rises they would have received in their state pensions if they were still living in the UK? Some now receive only £48.75 per week, despite having made national insurance contributions in the UK throughout their working lives.

[Baroness Stedman-Scott (Con)]

As I understand it, the previous agreement with Australia, which did not include uprating, was terminated by Australia in 2001 due to the UK’s refusal to change its policy on pensions uprating abroad.

[The Lord Speaker (Lord Fowler)]

My Lords, all supplementary questions have been asked. This brings Question Time to an end.