Pensions Uprating (UK Pensioners Living Overseas)

Marion Fellows Excerpts

Wednesday 11th May 2016 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I pay tribute to everyone who has brought this debate to the Chamber. I declare an interest: I am in receipt of a UK state pension, which has been uprated since I first received it. I further declare that it is possible that, at some time in the very distant future, I may decide to live abroad.

As you well know, Madam Deputy Speaker,

“facts are chiels that winna ding

And canna be disputed”.

I have written that down for Hansard. I will repeat many things that have already been said in the debate, because they are important. A pension is not a benefit. It is not a privilege. It is not a handout. Pensions are earned by individuals who contribute to the state—generally those who have worked hard all their lives to provide for themselves and their families and to support our economy.

UK state pensions are uprated according to the laws and regulations in this country, and that right must be extended to all British pensioners abroad, over half a million of whom do not benefit from uprating. Currently, as has been said, no reciprocal agreement exists with the Commonwealth countries of Canada, New Zealand and Australia. UK pensioners living in these countries account for 80% of those who have had their pensions frozen. We have a close relationship with those Commonwealth states, but apparently not close enough to form reciprocal agreements to support pensioners. The countries with which we have reciprocal agreements include the republics of the former Yugoslavia, the USA, Turkey and—a personal favourite of the Government —the tax havens of Barbados and Bermuda. The fact that the Government protect tax havens for the benefit of global elites but fail to right the injustice to their own pensioners perfectly exemplifies the Government’s priorities.

The reasons given by the Government for rejecting universal uprating lack coherence. The Government claim that the price of universal uprating is too high. In fact, Oxford University’s figures estimate that £4,300 is saved each year with every pensioner who moves abroad, because of the decreased pressure on public services. I am sure if they really looked, the Government could find the money to provide for those pensioners, just as they found the money for bombing Syria and just as they will find £167 billion to replace Trident. The Government are more concerned with bombing abroad than they are with supporting our pensioners abroad. The Government have said that they would like to focus on providing for pensioners who are based in the UK, but I reiterate that pensions are a right, and uprating for pensioners abroad should not mean a trade-off with pension rates for people here.

The Government have said that uprating is based on levels of earnings growth and price inflation in the UK, and that it has no relevance to pensioners abroad. However, no reciprocal agreements have been made with the three main foreign countries in which British pensioners live in order to try to overcome that deficit. The Government have said that opposition to universal uprating has been Government policy for 70 years across all Governments. As someone who supports the end of a 300-year political Union, I am not one for blind traditionalism.

This Government, like several before them, have refused even to consider universal uprating; they have refused to negotiate a reciprocal agreement with certain states, including Great Britain’s former dominions; and they have even refused to consider a review. That has all resulted in an asymmetrical system whereby pensioners in the EU and the USA benefit, but those in Australia and Canada, for example, do not.

The Government are taking “an out of sight, out of mind” approach, which leaves our pensioners who live overseas in some countries worse off each year, in real terms, through an incoherent system that sets us apart from every other member of the OECD. Partial uprating is a pragmatic and practical solution, and I urge the Government to take that route. It is about time the Government secured the rights to pension uprating for those who helped to build this country, rather than focusing on decreasing public spending and rolling back the state. When we work, we pay national insurance and taxes, and our pensions are accrued on that basis. Those pensions are a right, and no one should ever be refused what is theirs by right, whether they live here or elsewhere.