Pensions Uprating (UK Pensioners Living Overseas)

Alan Brown Excerpts

Wednesday 11th May 2016 Commons Chamber

[Ian Blackford]

I thank my hon. Friend for that news—I did not even know that I was up for election. He is absolutely right: we are talking today about frozen pensions, but women born in the 1950s also face injustices. Many of us on both sides of the Chamber have engaged in the debate about that, and the fight goes on. Given the importance of these issues, I have suggested to the Minister that we should take some of them out of the Chamber and have a pensions commission that can look holistically at them. We can then make sure that we get them right and accept the obligations we all have to look after our pensioners, whether that is the women born in the 1950s or the frozen pensioners who are suffering.

I acknowledge that there is a cost to the Government in unfreezing pensions, but the resulting increased migration would offer them savings to help pay for doing that. In 2010, an Oxford Economics study using Government statistics showed that a pensioner who permanently leaves the UK saves the UK £7,700 a year in NHS usage and other age-related benefits, while the lost income in relation to such a pensioner would amount to £3,900—a net saving to the Exchequer of £3,800 at 2010 prices or £4,300 at today’s prices.

Many people living in the UK today perhaps came from the Caribbean or the Indian subcontinent and worked here all their lives, but those who want to go back to their country of origin cannot do so, because they risk being penalised by a frozen pension. We must help those who want to do that, as well as UK pensioners who live overseas. This is, therefore, not just about the gross cost of increased pension spending; there is an element of potentially reduced commitments to pensioners who seek to leave the UK to be with loved ones abroad or to return to their country of origin.

Those subject to frozen pensions have waited long enough to see this matter debated in the House. We must not let them down. We need to speak up for those pensioners living in the UK who want to move abroad to be with loved ones who have emigrated and those who came to work here and who wish to return to their country of origin, but who are fearful of the impact. There is a host of reasons why a pensioner may choose to move abroad in later life; it is simply wrong to punish them for making such a choice.

Pensioners who have paid the required national insurance contributions during their working lives, in the expectation of a decent basic pension in retirement, will find themselves living on incomes that fall in real terms year on year. Paying national insurance contributions to qualify for a state pension is mandatory. All recipients of the British state pension have made these contributions, and it is clearly unfair to differentiate payment levels.

Pensioners will now face ending their days in poverty because they chose to live in the “wrong” country—in most cases with no knowledge of the implications of their choice for their pension. Some people are being forced back to the UK—away from the family they love—just to secure an income they can survive on.

Reform would bring the UK in line with international norms, as most other developed countries now pay their state pension equivalents in the way I propose. We are, I am sad to say, the only country in the OECD that does not pay pensions irrespective of domicile. That should shame us all. Why are we the only country that does not accept our moral responsibility to our pensioners? That must change.

We know the statistics—that 550,000 people are affected—but behind those numbers are 550,000 human stories. Let me take three examples of the human cost of freezing state pensions. Abhik Bonnerjee, now 73, moved from India to Glasgow in 1960. He worked in the UK for 38 years—in shipbuilding, steel manufacture and the food industry. He also owned a restaurant for six years.

Abhik returned to India in 1997 and reached the state pension age in 2008, when it was paid at £87.30 a week. He made all the required national insurance contributions, and if he was still in the UK today, he would be getting not £87 but the full UK state pension. The decline in his real-terms income has left Abhik concerned about losing his home. He now feels he may have to move back to the UK. Why are we putting such a gentleman in such a position?

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

My hon. Friend gives a very good personal example. Is there not also a paradox? Abhik faces the dilemma of returning to the UK, but if he does return, not only will his pension be uprated to the full amount, but he will be able to access health and social care, so, as well as the disruption to this person’s life, there would also be a further cost to the UK Government.

[Ian Blackford]

My hon. Friend is absolutely correct. This is not just about someone who comes back to the UK to live. Oddly enough, if such individuals came back to the UK for a holiday, they would collect their full UK state pension when they were here. The whole thing is just daft; we need to normalise it and accept our full responsibilities.

Let me give the example of Rita Young. She is 78 and lives in Peterborough, in the UK. She retired in 2002, aged 67, having enjoyed a long career in market research and as a community volunteer. Rita’s son moved to work in Australia some time ago and now has a family there. Since being widowed, Rita has wanted to join her son and grandchildren, but she has felt unable to do so because of the prospect of a frozen pension.

As Rita gets older, she finds daily life increasingly difficult, especially as she does not have a family around her to rely on. She is deeply saddened that she is not able to be with her family during the later stages of her life. She said:

“I have worked and contributed to my state pension all my life. It doesn’t seem fair that the government can just stop uprating it because I want to be with my family.”

That is the human cost of frozen pensions.

Lastly, there is former college lecturer Anne Puckridge, now 91. She lived and worked in the UK all her working life, paying mandatory national insurance contributions throughout. In 2002, aged 77, she finally retired and decided to move to Canada to be with her daughter and grandchildren, who had moved to Calgary. Fourteen years on, Anne, who served as an intelligence officer in the Women’s Royal Naval Service in the second world war, is struggling to live on a frozen pension of £75.50 a week.

--- Later in debate ---

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I thank my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) for securing this debate.

It is fair to say that, given my youthfulness, prior to last year I did not have a great understanding of pensions. But the more I look into the different issues, the more bizarre the world of pensions seems to get. I thank the hon. Member for North Thanet (Sir Roger Gale) for mentioning the fact that we are not at the WASPI meeting because we are in this Chamber debating this issue. He made an interesting point, which is in fact one reason why I find this debate incredibly bizarre. He said that the Government claim to have received legal advice that raises fears that people will be able to claim for back payments. But legal advice received by the International Consortium of British Pensioners from Blackstone Chambers contradicts that.

The Minister said that many pensioners overseas whose pensions are frozen are compensated through means-tested benefits in their country of residence and implied that unfreezing those pensions would make savings for foreign Governments at the expense of the UK taxpayer. But again, when we look at the facts, the ICBP’s recent review of the countries with the largest numbers of British pensioners with frozen pensions shows that that is simply not the case. The vast majority of pensioners would benefit greatly from an uprating in full.

That brings me to the person who my hon. Friend the Member for Ross, Skye and Lochaber mentioned, Anne Puckridge, the former college lecturer, who is now 91 years of age. She worked in the UK all her life, then moved to Canada to be with her daughter and grandchildren. Fourteen years on, Anne, who served as an intelligence officer in the Women’s Royal Naval Service during the second world war, is struggling to live on a frozen pension of £75.50, which is what she was entitled to when she moved. As my hon. Friend pointed out, she now fears that she will be forced to move back to Britain to be able to survive. He gave us some telling quotes. She has said:

“It’s the small things, and the injustice, that is really getting to me…I value my independence, but I can’t go on living on the breadline and I don’t want to inflict this on my family.”

That is telling. She is not asking for millions here—she does not want to raid the bank. She is asking for the extra 20 or 30 quid that she is entitled to after she paid into the system all her working life. Anne went on to say—this is perhaps the part that gives us most insight:

“As well as ever-increasingly poverty, I feel a sense of stress and shame, which is affecting my health.”

I looked through the various briefings on this issue and the previous debates there have been, for years now—as the Minister rightly pointed out, this debate has been going on since probably after world war two. In 1981, the line from the Government was not far off what the Minister said today. They said that they could not, unfortunately, unfreeze the pensions because that was incompatible with the Government’s policy of containing the long-term cost of the social security system to ensure that it remained affordable. This is an incredibly cynical point—I am getting used to those in here, so I thought I may as well join in—but it concerns the real lunacy of the argument about cost. Instead of giving people who have paid into the system all their life the £20 or £30 extra that people in the UK get and to which they are entitled, we are saying, “We’re not going to give you that money, but you can go and live abroad, make yourself ill through poverty, worry and the stress of having to come home. When you are forced to return to Britain, don’t worry, we’ll foot the bill for the NHS and everything else.” The argument about cost does not stand up—costs will increase when pensioners who have been made ill through stress or whatever, have to come back in order to survive.

[Alan Brown]

Yet again, my hon. Friend is making a powerful argument. Does not another nonsense argument about cost concern the reciprocal arrangement that is needed, given that Canadians in this country can get the full state pension from their country but British pensioners cannot get it in Canada? This is not about protecting social security in this country, because a reciprocal arrangement could easily be put in place. We are supposed to have the best social security system in the world, so the argument about cost is nonsense given that the Canadians can afford to pay for their citizens in this country.

[Mhairi Black]

I could not agree more with my hon. Friend, and I will touch on our relationship with Canada in a minute. My argument is supported by a 2010 study by Oxford Economics, which used Government statistics to show that a pensioner who permanently leaves the UK saves it £4,300 a year in NHS usage and other social security benefits. We are placing an increasing workload and cost on to the NHS and other public bodies—the very bodies that we are simultaneously using as part of the argument to continue with frozen pensions. It makes no sense.

The third reason often given by the Government for this measure is that there could be some sort of legal or political backlash, but that is not the case. This issue has been debated for years, and Annette Carson made a legal challenge against the Government on the basis of discrimination. She said that because she was in South Africa, which does not have a reciprocal deal with the UK, her pension was frozen, whereas if she had moved to an EU country—or a country with such a deal—she would have had an uprated pension. The judge ruled that she lost the case and that there was no discrimination, but he noted just how ludicrous the system is, and how much confusion there is about it. He ruled that it was a political, rather than judicial, decision, which shows how crazy these plans are—the hon. Member for Worthing West (Sir Peter Bottomley) used that word previously.

Any pensioner who moves within the EU or the European economic area gets an increase, and the UK has reciprocal agreements with 16 countries. As the hon. Member for Vauxhall (Kate Hoey) pointed out, our agreements with Canada, New Zealand and Australia do not allow for uprating, yet those three countries are home to 80% of overseas residents who do not receive upratings.

I agree with everything that the hon. Member for Broxbourne (Mr Walker) said about choice and how that has to work both ways with the Government. The Minister said that pensioners can choose whether to go to country A that has a deal, or country B that does not, but that does not add up. Surely true freedom would allow someone to choose freely where they want to go, knowing that they have paid in all their life and will now get that back. It is not for the Government to put a hindrance on where people can choose to spend the pension that they have built up over their lifetime.

Transitional State Pension Arrangements for Women

Alan Brown Excerpts

Wednesday 24th February 2016 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

This is the fourth WASPI campaign debate that I have spoken in, and it is hard to find something new to say. I note that the Minister had the same problem, because his earlier performance at the Dispatch Box was a disgrace. He said that he would talk about transitional arrangements, but he did not—he avoided the matter the whole time, took interventions and fudged the issue. Let me remind him of a suggestion that he made in a previous answer to an oral question, when he said that women could use the pension freedoms to help themselves bridge the gap and transition to state pension age. For me, that shows that he does not understand that women are less likely to have pensions, and that the pensions they do have are more likely to be low in value. To suggest that women should blow their savings as a remedial measure, instead of the Government helping out, is crazy and irresponsible.

I also want to make the Minister aware of another ongoing issue that could compound matters and affect people’s choice, namely the exit payment gap in the Enterprise Bill. The cap in its current format will further limit the choices for people considering early retirement or voluntary redundancy. The £95,000 cap will affect not the so-called fat cats but long-serving, lower paid workers. The cap in its current format covers the strain on pension funds that an employer requires to pay for early and ill-health retirement. That means that people taking ill-health retirement might have the money due to them capped because of this Government. That compounds matters. The exit cap prevents councils, such as the local authority I was a councillor for, from operating schemes such as Teacher Refresh, which allows higher paid experienced teachers to opt for early retirement. That allows younger teachers to be employed, saving the taxpayer money overall and creating jobs for younger teachers. Combine the cap with the increased retirement age and we have a bad deal for individuals—mainly women—a bad deal for local authorities, and a bad deal for the taxpayer overall.

Another impact of the increase in the state pension age in the 2011 Act is that it can make women more dependent on male partners. That is bad for personal esteem, bad for relationships and potentially damaging in cases of domestic abuse where women feel trapped financially. Women are concerned and are feeling stress due to the bombshell that has been dropped on them. Instead of ignoring what is going on and ignoring the four debates, the Government should think about the consequences and do something about them.

The Government hide behind the £30 billion estimate to fully reverse the 2011 Act. People today are asking for transitional arrangements, but the £30 billion to do a full reversal could be found. The Government found an extra £16 billion in the defence review for Trident, to add to the £167 billion that had already been committed. They have allocated £12 billion for the right to buy social housing. They could introduce a bank levy and a mansion tax. They could reverse the inheritance tax and stop adding more people to the other place. Those are all choices to spend more money or subsidise other policies, while introducing austerity in other ways.

The Government have already lost court cases relating to the personal independence payment and the bedroom tax. There is a great chance they will lose another court case due to the unfairness of this measure and the lack of notice given to women. As has been said, this is a breach of contract. I ask the Minister to please take that into account and to put in place some transitional arrangements.

Transitional State Pension Arrangements for Women

Alan Brown Excerpts

Monday 1st February 2016 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

There seems to be widespread consensus that that acceleration of the equalisation of the state pension age directly discriminates against women born on or after 6 April 1951. We all agree that women have not been given fair notice to prepare and manage their plans and finances for an additional number of years before receiving their state pension. Many women in my constituency are genuinely alarmed and worried about their financial future due to the lack of preparation time that they have had. As has been said—it bears repeating—life expectancy across the UK is not uniform, and that creates complexities when discussing this issue.

It has been hinted at but not explicitly said today that it is a real shame and a real disappointment that that fantastic crusader for people of pension age, Baroness Altmann, has allowed herself to be effectively neutralised by her ennoblement. Many women face the real prospect of cancelling retirement plans after a lifetime of work. That goes against the grain of natural justice, and it demands to be addressed because it is a breach of contract.

A DWP research report in 2004 found that only 43% of the women affected were able to identify their own state pension age as 65 years or between 60 and 65 years. That low figure was identified as a cause for real concern, showing that information about the increase in the state pension age was

“not reaching the group of individuals who arguably have the greatest need to be informed.”

Levels of awareness were even lower among women who were economically inactive or in routine and manual occupations, standing at a mere 36%.

Women born in the 1950s have been affected by significant changes to their state pension age with a lack of appropriate notification, little notice and much faster than promised. That can have only one outcome: straitened financial circumstances for women as they frantically try to prepare and re-plan retirement. With retirement a further four, five or even six years further away than originally thought, it is not just financially challenging; it is cruel and heartless. All of this, as has been said, is in the context of a lifetime of low pay and inequality faced by far too many women and the old-age problems that are a cumulative effect of that.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

My hon. Friend talks about the lack of planning. In the Chamber earlier today, one of the fallback measures suggested by the Minister was that women could use pension freedoms. That shows a lack of understanding that women are less likely to have a private pension that they can cash in, but to suggest they cash it in to help them get by these few years is absolutely irresponsible.

[Patricia Gibson]

Absolutely. I concur with everything that my hon. Friend has said.

Clearly, and despite the lack of action, the Government know there is a problem. Steve Webb, the Pensions Minister in the coalition Government, has admitted that the period of notice being given to some women was “the key issue”. He further went on to indicate that he recognised that not everyone affected by the 1995 Act had been aware of it. The Government must take responsibility for that. Why did they not act in this matter earlier to ensure that the women affected were fully informed? Why were women left in the dark, blissfully unaware that their retirement plans would lie around them in financial ruins?

The excellent campaign run by Women Against State Pension Inequality calling on the Government to make fair transitional state pension arrangements for 1950s-born women is one that we in the SNP fully support in the interests of natural justice. Fairness is all that is being called for here today. I take exception to what the hon. Member for Gloucester said about the cost being £30 billion. I will challenge anyone who makes that case. Is it more worthwhile to fund weapons of mass destruction or to ensure that our people have dignity as they approach pension age? The Government have not listened to our calls so far. They have avoided and obfuscated.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 26th January 2016 Commons Chamber

[Andrew Selous]

I understand my hon. Friend’s proper interest in this subject. As the threat evolves, we evolve our response. I can tell her that we are strengthening the training for new prison officers to ensure that they are able to tackle criminal activity in whatever form it takes within prisons. As the Secretary of State said earlier, he has asked the Department to review its approach to dealing with Islamist extremism in prisons, and we await that report shortly.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

T5. It is worth repeating the damning indictment of this Government given by the Lord Chief Justice just two weeks ago:“Our system of justice has become unaffordable to most”.Will the Secretary of State take heed of those comments and also follow the Scottish National party lead by committing to the abolition of tribunal fees?

[Michael Gove]

I take very seriously everything that the Lord Chief Justice says, and that is why I am delighted to be able to work with him on a programme of courts reform, which should make access to justice swifter, more certain and cheaper. Of course it is important that we learn from different jurisdictions, but even as we look to Scotland from time to time to see what we can learn from the development of the law there, it is also important that from time to time those charged with what happens in Scottish courts should look at the tradition of English justice, which, as a Scotsman myself, I would have to acknowledge has certain superior elements.

State Pension Age (Women)

Alan Brown Excerpts

Thursday 7th January 2016 Commons Chamber

[Neil Gray]

rose—

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

rose—

[Richard Graham]

A lot of people want to speak, so let me carry on for the moment.

The hon. Member for Paisley and Renfrewshire South was right to quote the previous Pensions Minister, Steve Webb, as saying that not everyone knew about this. He has accepted that, as I think we all recognise. None the less, the argument that no transitional arrangements were made—arrangements that Opposition Members are calling for—is wrong. A significant transitional arrangement and concession was made in 2011 that affected 250,000 people and cost the Government—the taxpayer—£1.3 billion, which was a significant amount of money at the time. That arrangement was made because the then Pensions Minister and the then Government recognised advice from the Department saying that the waiting time for some women born in the 1950s had increased to as much as two years, and they wanted to reduce it to 18 months to benefit those 250,000 people.

What is interesting is that while the motion calls for further transitional arrangements, it does not spell out, nor has any Member who has spoken so far spelt out, exactly what transitional arrangements are being called for. Were the intention—

--- Later in debate ---

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I want to pay tribute to the WASPI campaigning group, a group of non-political women who have come together to demonstrate and raise awareness of the serious issues involved. They had to resort to freedom-of-information requests to hold Government Departments to account, and these demonstrated the lack of communication about the Pensions Act 1995. What that group said, what we have heard today and what we hear from our constituents is how the combination of the 1995 and 2011 Pensions Acts is shattering people’s lives.

Some women have spent their whole lives planning to retire at 60 and they now find that they might have to work an extra five or six years. Nobody here can imagine the impact and the stress that this could wreak on family life. Some women have already retired on the basis that they would have enough income to get by until they reached what they thought was going to be the state pension age of 60. These include women who have been out of the workplace for up to five years and now find themselves in the position of having to find employment again. This is difficult enough when they have been out of the workplace, but it is further compounded by the austerity measures in the public sector. Some of these women had financial advisers and took early retirement, but their advisers did not tell them about the impact of the 1995 Act.

One of my constituents was made redundant from the civil service, which allowed her to care for her husband, who has now sadly passed away. Now she has discovered that she needs to get back in the workplace for a further five years. How is she going to do that at the age of 60, bearing in mind that only 34% of women in the 60 to 64 age range are economically active? Another constituent has been lucky enough to get back into work, but she feels that having to pay national insurance again while she is working these extra years rubs salt in the wounds. Another constituent, Jan Buchanan, simply says she has been robbed of over £30,000.

Another aspect of the excellent information gathered by the WASPI group is its submission and recommendations on how the Government should communicate with people in future about their pensions and how to make financial information and its impact clearer. I recommend that the Government take that on board.

We have heard that the previous Pensions Minister now admits that acceleration in 2011 was a mistake, but he has taken the easy option of blaming the civil service and the Tories. I do not think that is acceptable either. Two months ago, the Chancellor found £27 billion pounds and as we have already heard, money could be found for bombing Syria and £5 billion has already been wasted on the development of the future Trident programme.

This Government continue to tell us that they take pride in being able to take tough decisions. We will give them an open goal and an easy decision—they should change their minds on the transitional arrangements and help these people whose lives have potentially been ruined.

State Pension Age Equalisation

Alan Brown Excerpts

Wednesday 2nd December 2015 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Davies. Like others, I thank the hon. Member for Worsley and Eccles South (Barbara Keeley) for raising this important matter. The turnout in the Chamber reflects its importance.

This issue was first highlighted to me in my first surgery by a constituent who is very active with the campaign group WASPI. I pay tribute to WASPI for highlighting these concerns. Since then, I have been contacted by many other constituents. It is abundantly clear that many women were not properly informed about the Pensions Act 1995. This injustice was not caused just by the Pensions Act 2011; it was compounded by the Department for Work and Pensions’ earlier mistakes. Like others, I have constituents who face a delay in reaching the state pension age not of two years, but of what they feel is a six-year whammy, which clearly causes a lot of emotional distress.

I talk about the 1995 Act because it illustrates the seriousness of the predicament that many women face. They plan to retire at a certain age and work all their lives with that goal in mind, but at the last minute that is taken away from them and they are left with hard choices. Do they work longer, do they use their savings or do they use the pensions flexibilities to retire when they originally planned?

It is clear that this is another tax credit-type issue for the Government. The figures and numbers look good on paper, but behind the statistics are the personal stories of the people—in particular, women—who are affected by the legislation. Like tax credits, it is clear even in this Chamber that this is becoming a cross-party issue. The Government should take heed of it, and not continue to put their head in the sand.

The 2011 Act breached the Department’s guidelines, which state that increases should have a 10-year lead-in or warning. That lead-in period was halved in the 2011 Act for most of the people it affected. People of both sexes, but perhaps more women, were affected by the economic crisis and the 2008-09 recession. For many people at that time, early retirement seemed like the right thing to do, but they now have to wait longer to reach to state pension age. They thought they were doing the right thing. They planned and felt comfortable, but they face potential financial hardship and emotional distress. A crumb of comfort for those who live in Scotland is that the Scottish Government’s policy on bus passes and free prescriptions means that our constituents are slightly insulated. They are not affected by the state pension increase.

I am sure that the Minister will tell us that the Government are looking after pensioners with the triple-lock system and the new single-tier pensions. But believe me, that is of no comfort to the 5 million people affected by the 2011 Act, and in particular to women born in the critical period in the early 1950s.

The last-minute changes to the 2011 Act cost an estimated £1 billion. Considering the surplus that we hear the Chancellor has got, I suggest that another few billion pounds would not go amiss in rectifying this wrong. I strongly urge the Minister to look at concessional arrangements for the future.