State Pensions: UK Expatriates

Alex Cunningham Excerpts

Thursday 20th April 2017 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

I thank the Backbench Business Committee for granting the debate and congratulate the hon. Members for North Thanet (Sir Roger Gale) and for Ross, Skye and Lochaber (Ian Blackford) on securing it, and I thank all Members who have contributed.

I have spoken many times in this Chamber and in Committee about the injustice within our pensions system. On numerous occasions, I have highlighted how the Government have let down the WASPI women and vulnerable pensioners more widely in society. Today it is overseas pensioners. The upcoming general election gives us an opportunity further to highlight such issues and the need for greater transparency in the pensions industry. I hope that those issues, and the issue of pensions uprating for overseas pensioners, get plenty of attention over the next seven weeks.

Today, all pensioners, at home and abroad, want to know whether the Government will ditch the triple lock on 3 May, in line with the Secretary of State’s answer to me on 9 January, when I confirmed that Labour’s commitment was for the longer term. Will the Minister confirm that the Tory triple lock is at an end, or is the commitment to 2020, as declared by the Secretary of State in November on “Peston on Sunday”, and as was suggested to be the case by the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier)?

The pensions of those living overseas are a hot topic for hundreds of thousands of people, many of whom have seen their British state pension frozen—in some cases, for decades. Like the hon. Member for Leeds North West (Greg Mulholland), I will not be writing a manifesto, but while he cannot guarantee that partial uplifting will be in the Lib Dem manifesto, it will certainly be in the Labour party’s.

As the law stands, there are 551,000 UK pensioners living abroad, in countries such as Australia and Canada, who have had their pensions frozen at well below the level paid to pensioners still living in the UK, according to the International Consortium of British Pensioners. While UK pensioners receive up to £155.65 a week, a person who retired in 2000 and moved to either Canada, India, Australia or one of hundreds of other countries receives just £67.50.That does not grow with inflation; in fact, it does not grow at all, leading to a continuous reduction in real-terms income, a loss of independence and, eventually, poverty for hundreds of thousands of pensioners across the globe. As we have heard from their champion, the hon. Member for North Thanet, all these people contributed tax and national insurance to the UK throughout their working life, and they are now penalised because they choose to live in a different country, perhaps to spend their retirement closer to their families.

Without uprating, recipients reliant on their state pension income could find themselves increasingly impoverished, leaving them unable to afford a basic standard of living and increasingly dependent on relatives, and they may be forced to return to the UK—we have heard many examples of that during the debate. Surely it is time that this country established a fair system to support our pensioners regardless of where they choose to live. Those who have spent their life working to contribute to the national economy should be supported in the manner they deserve.

Over recent decades, it has become increasingly clear that we live in a globalised world—a world that sometimes requires people of all ages to move across borders to Europe, the US or Canada, or sometimes further afield. As we look to our new future out of the European Community, but working in a more comprehensive partnership with the wider world, I ask the Pensions Minister to do what other Ministers, Labour and Tory alike, have failed to do, and start increasing overseas pensions now.

Why, in this globalised world, should the country in which a person retires—by choice or for other reasons—affect the pension they have worked hard to earn for 45 years or more? Why should the country a person collects their pension in affect their standard of living? Why should it affect their ability to enjoy their retirement and buy the essentials in life? That does not sound like a fair system; it sounds like a system that leaves hundreds of thousands of pensioners uncertain about their future, their financial position and, ultimately, their wellbeing.

There are those who argue that overseas pensioners spend their cash in economies other than ours, that they no longer pay tax here—if they have the income to do it—and that they make no contribution to our society. However, some may remind us that our overseas pensioners do not access our national health service, and nor do they require support from social care and other services. As has been said, for the relatively small cost of £30 million this year, the UK could begin a system of partial uprating for pensioners living overseas. For 2018, that would cost £30.75 million, and the figure would continue to increase at roughly the level of inflation.

This is about not a costly backdating of pensions uprating, but a way to begin to rectify the injustice of the overseas pensions system. We should prove that we care about the wellbeing of UK pensioners abroad and care about the vulnerable in society. Our message to the Government should be that that should translate into a fair pensions system.

As others have said, the issue of overseas pensions is of even more pressing concern due to the recent invoking of article 50, with a lack of clear Government policy around much of the Brexit process. Many expats who have retired within the EU face an uncertain future, and I have heard nothing about the protection of British people’s pensions in EU countries once we have left.

In addition to people being left uncertain about their immigration status, health benefits and many other issues, the Government’s inability to commit to policy in Brexit negotiations has left 472,000 retired UK nationals living in the EU uncertain of what the future holds for them. We do not know whether a deal will be made to ensure that UK pensioners living in the EU receive the full pension they are entitled to. The Government will not tell us whether that is even on the cards. Perhaps the Minister can update the House today. Will British pensioners living in EU countries have their pensions protected after we leave? The right decision—to uprate overseas pensions now—would send the right signal to pensioners in the EU that the Government have a plan and that they will be protected.

The ambitions of the nearly 700 overseas pensioners who have emailed me directly go well beyond the proposal to start uprating pensions now. I recognise that restoring pensions to the levels of today would be a huge stretch for any Government, never mind one that has such a recent record of slashing everything from bereavement income to in-work benefits and of denying mentally ill people, among others, the personal independence payments they need, but we need to start somewhere.

We have always prided ourselves on being a caring country. We are one of the largest net providers of foreign aid in the world, and rightly so. We must, however, ask why we do not feel the need adequately support our pensioners who have retired abroad. An increasing number of modern countries uprate pensions to those living overseas in line with inflation, regardless of where those pensioners reside. Today, we must consider why the UK is not doing the same.

As a modern, compassionate nation, we must look to provide all our pensioners with enough financial support to allow them to enjoy their retirement, as they deserve. Labour has laid out its pledges to pensioners in the last few weeks—maintain the triple lock, compensate the WASPI women and preserve the universal winter fuel allowance and free bus passes. Will the Minster join us in our other pledge—to protect the pensions of people living overseas? It is just the right thing to do.

--- Later in debate ---

[Alex Cunningham]

Spend the money!

[Richard Harrington]

The hon. Gentleman rarely makes me speechless, but his plea from a sedentary position to spend the money has done so. Perhaps he thinks that I am already Chancellor of the Exchequer; it is nice of him to imply that.

--- Later in debate ---

[Sir Roger Gale]

I am grateful to all hon. Members on both sides of the House who have contributed to this debate, which will have been watched by many people around the world. We are proud to live in a country that has a reputation for fairness and non-discrimination. There is an injustice, and my hon. Friend the Minister knows that. To say that the situation has been widely publicised and that it has been the same for many years does not make it right. It has been wrong for many years, under successive Administrations. It will go on being wrong, and people like me and my colleagues will carry on until we get a resolution.

I understand that the Minister is not in a position to make a concession this afternoon, and I did not expect him to do so. I will ask him just one thing. When this debate was called, none of us had any idea that there was going to be a general election. To some extent, inevitably that has coloured some of the remarks made this afternoon. I have deliberately not pulled my punches, because that is not what I do. I just say this, in friendship, to the Minister. Will he please have a serious discussion with the Secretary of State for Work and Pensions—one of my Kent colleagues—about how we can put the matter into the Conservative party manifesto as an election pledge, so that we can resolve this issue on the very modest terms that we have proposed, into which great thought has been put? That would enable us, when we come back in June—I hope that we, at least, will be coming back—to put this issue to bed and allow half a million people living in retirement around the world to sleep more soundly.

Question put and agreed to.

Resolved,

That this House notes the detrimental effect that the Social Security Benefits Up-rating Regulations 2017 will have on the lives of many expatriate UK citizens living overseas with frozen pensions; and insists that the Government take the necessary steps to withdraw those Regulations.

[Alex Cunningham (Stockton North) (Lab)]

On a point of order, Madam Deputy Speaker. It would be helpful if the Pensions Minister remained in the Chamber. I am grateful to him for his kind words about our working relationship, and I agree that it has been constructive, even when we have disagreed. I hope that you or he can assist with the news given to my office today that the Department for Work and Pensions MP hotline is closing down at midnight tomorrow; staff claim that that is because of purdah coming into effect. That would have a hugely detrimental effect on MPs’ ability to do their job effectively. I am sure that the wheels have moved since I raised the matter with a Government Whip earlier this afternoon, but can you or the Minister confirm the date for purdah and whether hotlines for MPs should close tomorrow evening?