Pensions Uprating (UK Pensioners Living Overseas)

Charles Walker Excerpts

Wednesday 11th May 2016 Commons Chamber

[Ian Blackford]

I thank the hon. Gentleman for that intervention. I agree that an anomaly exists. There is no logic whereby pensioners living in the US, for example, can benefit from their pension, but those in Canada cannot. It is a question of justice. That is why I am asking all Members across the House to unite on a matter that should concern us all. It is about doing the right thing, and I hope that today the Minister and the Government will respond correctly.

The pensions legislation provided for the additional state pension to be uprated at least in line with earnings. It also provided for the current policy on state pension uprating overseas to continue. Thus pensioners who would have been entitled to upratings if they retired in the UK are no longer entitled to that increased payment simply because they live in certain overseas countries. Pensions will be uprated only in a European Union country or one with which the UK has a reciprocal agreement. There are 16 such non-European Union countries, including the USA, Israel, Turkey and the republics of the former Yugoslavia. The agreements with Canada and New Zealand and the former agreement with Australia do not provide for uprating. Between them those three countries account for around 80% of overseas residents who do not get their full pension entitlement.

We are talking about individuals who have paid national insurance in anticipation of receiving a full UK state pension. We often talk about a postcode lottery; in this case it is a national lottery, with 550,000 pensioners paying the price—entitlement to a full pension based not on their national insurance contributions, but on the country they live in. How can that be fair? If they live in the US Virgin Islands, their pension rights are protected, but if they live in the British Virgin Islands, those rights are not protected. The debate today is about fairness. It should not be about where pensioners live.

Pensions, after all, are a contract. They are not a benefit. It is only fair and just that a British pensioner who chooses to enjoy their retirement overseas should receive the same amount as a British pensioner who chooses to remain in the United Kingdom. Either they have an entitlement or they do not.

[Mr Charles Walker (Broxbourne) (Con)]

If people pay in, the pension should pay out, regardless of their address.

[Ian Blackford]

I thank the hon. Gentleman for that very succinct comment. That is exactly the point. This should be about what are often called British values of fairness. If people have paid into a pension, they should get their entitlement with the annual uprating. There is no excuse for us not to do that. Why do we seem to have different classes of pensioners? It is morally unjust and truly unfair for the Government to strip pensioners of their right to equal state provision. Overseas pensioners are entitled to fairness. The state pension is a right, not a privilege.

I look forward to the Minister responding later in the debate, but I hope that we do not hear what we have heard before—that it is all about cost. It is about doing the right thing and recognising that all pensioners deserve to be treated fairly. We should focus today on the 550,000 pensioners who are losing out, but there is a topical dimension to this debate as well. What are the implications for the 400,000 UK pensioners living in EU countries if there is a Brexit vote in a few weeks’ time? In the other place, Baroness Altmann, responding on 3 March to a parliamentary question of 23 February, stated:

“Of course there is uncertainty about how a vote to leave the EU could impact on access to pensioner benefits for UK pensioners living in other parts of Europe.”

What are we to make of that? There is no clarity at all in that answer from the Government. Are the 550,000 pensioners with frozen pensions likely to be joined by others if there is a Brexit vote?

The Government could say today that irrespective of that vote, those living in EU countries will have their pensions protected. Will the Minister do that today? Will he assure our pensioners living in EU countries that their pension will not be affected by a Brexit vote? That is a simple request. It is easy for the Minister to respond appropriately and remove the uncertainty for UK pensioners living in Europe.

The Government want to lift the limit on the period that UK citizens living abroad can vote from 15 years to their entire lifetime. Why would the Government want to confer voting rights on UK pensioners, but deny them full pension rights? What drives the decision-making process of this Government? Is it cost savings, or will they accept our obligations to meet our commitment to paying pensions, regardless of country of residence? I appreciate that the Minister will no doubt have been told by the Treasury to offer nothing. The Minister is a loyal Government servant and I understand his position, but let me help him to strengthen his case with the Treasury.

The present Chancellor of the Exchequer, during a debate on the Pensions Bill in the 2003-04 Session, when shadow Chief Secretary to the Treasury, said:

“If the system worked in the way that most people think, it would not matter where a person lived”––[Official Report, Pensions Public Bill Committee, 18 March 2004; c. 256.]

I have not said this before, but on this occasion I agree with the Chancellor: it should not matter where a person lives.

I appeal to the Minister to reflect on those words from his colleague, the present Chancellor. He spoke those words while in opposition, but each and every one of us should be judged by our deeds in government. It is not good enough to say the right thing when in opposition, and then, when in government, claim that it is all about cost. Let us today do the right thing. Let us unite in the House, standing up for all our pensioners, regardless of domicile.

I look forward to hearing voices from all sides of the Chamber. I look forward to hearing the hon. Member for Ashton-under-Lyne (Angela Rayner) speaking from the Labour Front Bench. She said at a meeting of the all-party parliamentary group on frozen pensions on 2 February this year, “The situation is unfair, illogical and doesn’t make sense.” I agree with those sentiments. If the House divides on the motion, I hope Members on both sides of the Chamber will stand shoulder to shoulder with all the pensioners who are seeking their full pension rights.

--- Later in debate ---

[Mr Charles Walker (Broxbourne) (Con)]

I am grateful for being called to speak in this debate. I operate on the principle that I have a contract with my Government and my Government have a contract with me: I work hard; I pay national insurance and I pay my tax, and in return I get a pension. That is a very simple expectation. It shames this Government and successive Governments that they have failed to meet their obligation to people who have chosen to move overseas. As I said in an intervention, where someone chooses to live should have no bearing on their pension entitlement, and it is shameful that Governments continue to argue otherwise.

The Minister said—it was a reasonable debating point—that uprating such pensions would cost £500 million a year, but people are owed that money and have a realistic expectation of receiving it. It is not as though a group of angry, silver-haired men and women were demanding some cash without having made any contribution. They deserve this cash precisely because they have made a contribution. Is my hon. Friend the Member for Worthing West (Sir Peter Bottomley) seeking to intervene? He has suddenly lurched forward in his seat.

[Sir Peter Bottomley]

I was just agreeing with my hon. Friend.

[Mr Walker]

Oh, that is excellent. It is always nice when someone agrees with me, particularly someone from my own side.

Now that the Minister has resumed his seat, I just want to say that he made great play in his speech of the issue of choice, in that pensioners have a choice about where they live. I am delighted that we have choices in this country—that is the wonderful thing about living in an open and free society—and that we can choose where we live and whom we associate with. However, choice cuts both ways, does it not? Choice also applies to Government. The Government absolutely have the choice to honour their promises to retired people who have made an enormous contribution to this country. Right now, the Government are choosing not to honour those commitments. I conclude this very short speech by saying that the Government should exercise their right to choose by actually choosing to do the right thing.

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[Sir Peter Bottomley (Worthing West) (Con)]

I agree with everything that has been said so far, except what has been said from the Front Bench. That is not to be taken personally by the Minister—we know that his role is to say what the Government have decided not to change.

The issue is that the Government have to change. We ought to start by changing the pension fund for Members of Parliament so that any Member of Parliament who goes to live in one of the countries on the frozen list does not get a pension at all or, if they do, it is not uprated in line with inflation. Why is it that the actuaries who do the calculations for the Government can take their second state pension—their work pension—abroad to any island in the Caribbean, and know that it will be uprated with inflation? Why is it that if they move to the Isle of Skye, the Isle of Wight, the Isle of Ely, or possibly even to Dubai—

[Mr Charles Walker]

The Isle of Thanet.

[Sir Peter Bottomley]

Indeed—I am grateful to my hon. Friend. I pay tribute to him, to the hon. Member for Vauxhall (Kate Hoey) and to others who, in advance of the welcome efforts from the Scottish National party, have followed the efforts of John Markham and his predecessors—he was not the first to fight this battle, although I hope he will be the last.

Why is it such an arbitrary collection of countries? I believe that a time will come when this Government find that a Commonwealth Heads of Government meeting is dominated, justifiably, by representatives of the main countries, where the more than half a million pensioners with frozen pensions live, asking the head of our Government why it is that a Minister can sit on the Front Bench and say—these are not precisely the Minister’s words—that we should not worry too much, because if the person really needs money they can get it from social security in the country they live in. That may be true in Australia, but it does not apply to the person who served in the civil service in Southern Rhodesia and stayed on in Zimbabwe, where we can now find billion dollar notes because of the previous inflation—heaven knows what will come from the present situation. That person has no option. That is not fair or right.

The politics mean that this change will come in time. It is a question of when and how. I suspect at some stage in the future—I hope still to be in the House when it happens; I do not intend to go on forever but I intend to go on for quite some time—the full uprating will be applied retrospectively. I understand from John Markham’s team that the first, and possibly only, step will be a partial unfreezing.

We need the Chancellor to understand that, as and when we have the proper plans for the 1.2 million British pensioners overseas to be able to vote—whether in individual constituencies or in some overseas constituency as for France—that will bring in a political power that is missing at the moment. The problem at present is that those who are already overseas tend not to be registered and do not vote—it is a scandal how very few of those who have moved even in the past 15 years are registered to vote and do so—and those who have not yet reached pension age or have not yet gone abroad do not think that this situation really matters to them.

We have 1.2 million British pensioners overseas now, which is 10% of British pensioners. We have to anticipate that there will perhaps be twice as many in the future. The time for the Government to resolve this issue is now. Otherwise, every extra 100,000 British pensioners abroad will mean about 50,000 in a country where their pension will be frozen, and the Government will then start to say that the cost is going up.

The alternative, of course, is for the Government to say that they do not think that pensioners overseas should get an uprating to their state pension and that they will renegotiate the agreements they already have with the EU and other countries around the world so that none of the 1.2 million British overseas pensioners will get an increase. That would at least have some logic to it. Perhaps the Minister will say now—or else he could write to me later—whether the Government have asked any country with which we have a reciprocal agreement whether it would like to drop it. I doubt he will be able to confirm that, because I do not think it has happened. Over the past 35 years, since 1981, the Government have simply thought that they do not have to do much about the situation because people are not making a fuss about it. Well, the job of this House of Commons is to make a fuss about it.

I could go on for quite some time, but I will put it this way. I do not want my Government—this Government or any alternative Government—to go on giving to the Minister in the Department for Work and Pensions the sort of points in their brief that the Minister has been given today and so has given to us. The arguments—not the Minister—are weak and insubstantial. They do not take us any further forward or provide a resolution. They just say, “We’re going to be stick-in-the-muds, because in 1981 we got away with it and nobody noticed.” More than half a million people, in countries that have mostly associated with this country, in war and peace, prosperity and difficulty, are being denied the increases that everyone else takes for granted, not just in this country but around the world.

I pay tribute to the hon. Member for Ross, Skye and Lochaber (Ian Blackford) for bringing the issue forward for debate. I thank the Backbench Business Committee. I hope that the Minister will forgive me for the way in which I put some of my points, which are not personal in any way at all. I hope that he will report back that this House and this country do not believe in unfairness. Some of us think that we were elected to help the Government to start doing things that are right because they are right, and not just because popular pressure will grow to make them do those things, whether they think they are right or wrong. The reason to do this is that it is right. The time to do it is now. I hope that that message will go clearly through to the Government.

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[Ian Blackford]

We have had a great debate and there is unity on both sides of the Chamber that the situation shames us all. Members on both sides of the House want the Government to take action. As many have said, it is about fairness. I thank the Front Benchers who have spoken, my hon. Friends the Members for Motherwell and Wishaw (Marion Fellows) and for Paisley and Renfrewshire South (Mhairi Black), and the hon. Members for North Thanet (Sir Roger Gale), for Broxbourne (Mr Walker) and for Worthing West (Sir Peter Bottomley).

This is a matter of considerable importance. The hon. Member for North Thanet has led the all-party parliamentary group with support from many others, including the hon. Member for Worthing West. We will not let this go, because we have a duty to stand up for the John Markhams of this world and all the others who have been mentioned.

I purposely did not mention the partial uprating but other hon. Members did. The Government could make a start by acknowledging the partial uprating. I say this to the Minister: please go away and talk to the Chancellor of the Exchequer, who spoke in 2003 about the injustices taking place at that time. The Government should accept the moral responsibility that we have for pensioners everywhere. To take the logic of the hon. Member for Worthing West, if we as Members of Parliament decided to go and live in the British Virgin Islands, we would get our pension. If it is right for us, it is right for everybody else. Let’s do the right thing.

Question put and agreed to.

Resolved,

That this House notes with concern that the pensions of 550,000 UK pensioners residing in a number of overseas countries will no longer be uprated; is further concerned that this unfairness will lead to hardship for overseas pensioners and that this measure will discourage many UK citizens living in the UK from returning to their country of origin as many wish to do in their retirement; regrets that the Government has taken this action which will lead to loneliness and anger among UK pensioners living abroad; and calls on the Government to withdraw this measure and pay UK pensioners at home and abroad their due state pension with the same uprating adjustment in the interests of fairness and equity.

[Mr Charles Walker (Broxbourne) (Con)]

On a point of order, Madam Deputy Speaker. May I seek your urgent advice? I and others are very concerned about the plight of licensed black cab drivers in London, many of whom are my constituents—I believe many are your constituents. How can I bring my concerns best to the attention of the new Mayor of London?

[Madam Deputy Speaker (Mrs Eleanor Laing)]

I can honestly answer the hon. Gentleman by saying that that is sadly not a point of order for the Chair, but I wish it were a point of order for the Chair because I share his concerns. I no longer speak in this place on behalf of my constituents, but that does not mean that I do not work on their behalf. He and I share a very great concern about the point he has just made. I hope he will find a way, as other colleagues will, of asking questions or applying for debates in this place that will come to the attention of the new Mayor of London, whom we all hope will take the necessary action on this extremely important matter.

I have to announce to the House that I must correct the number announced in the Division earlier today on the motion to disagree to the Lords message on the Housing and Planning Bill. The number of Members voting no and representing English constituencies was erroneously reported as 177 instead of 166. The correct figures are as follows: the Ayes were 292 and the Noes were 197; and of those Members representing constituencies in England, the Ayes were 275 and the Noes were 166. The House will have noted that, although there was an error in the numbers, it makes no difference to the result of the Division.

Under the order of the House of earlier today, I shall not adjourn the House until any message from the Lords has been received. I will suspend the sitting to await a message from the Lords. When the House is ready to resume, the bells will be sounded and a warning notice will be put on the annunciator in the usual way.