Oral Answers to Questions

Peter Bottomley Excerpts

Monday 19th June 2023 Commons Chamber

[Mr Speaker]

I call the Father of the House.

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

While my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) and I have represented Worthing and district, we have survived the equivalent of eight coalmines closing in the town. Flexibility matters.

Let us remember, looking back at the youth opportunities programme and the employer assistance scheme, that it is enterprise that makes the biggest difference. Will my right hon. Friend emphasise that? In tribute to Lord Young of Graffham, let us make sure that we combine individual enterprise and public enterprise with private partnerships.

[Mel Stride]

My hon. Friend the Father of the House is absolutely right. It is really important that we operate with all those relationships across the private and public sectors. Jobcentres up and down the country are heavily engaged with employers at all levels, and not just the large ones but the small and medium-sized enterprises that are so important.

Social Security and Pensions

Peter Bottomley Excerpts

Monday 7th February 2022 Commons Chamber

[David Rutley]

I thank you, Madam Deputy Speaker. I will lean into the point that the hon. Member has made. To be clear, the devolved Administrations are receiving £715 million in funding through the Barnett formula as usual, so I think we are all clear, and I will proceed. I was just moving on to the state pension age.

For people who are in work and who are parents, or who are below the state pension age and are looking for work or unable to work, this order increases the personal standard allowances—jobseeker’s allowance, employment support allowance, income support and universal credit—by 3.1%. Certain elements linked to tax credits and child benefit will be increased in line with those payments. The order also increases statutory payments by 3.1%: these include statutory adoption pay, statutory maternity pay, statutory paternity pay, statutory shared parental pay and statutory sick pay. The monthly amounts of universal credit work allowances will increase in April to £344 and £573.

As we begin our recovery and the global economy rebounds, consumer demand is surging at the same time as global supply chains are being disrupted. We recognise and understand the pressures that those rising costs are putting on household finances. Our long-term ambition is to support economic recovery across the UK, including through our multi-billion-pound plan for jobs, which has been expanded by £500 million and will help people across the UK find work and boost their wages and prospects, particularly at a time of record vacancies, which now stand at around 1.25 million. To help that effort, we have introduced the Way to Work, which is a concerted drive across the UK to help half a million people who are currently out of work into jobs over the next five months by engaging with employers and with claimants. This will help reduce the time that claimants spend out of work, thus preventing them from moving further away from the labour market, a factor that makes it increasingly difficult to get a job. To help working people further, as well as raising the national living wage to £9.50 from April—a pay rise for the lowest earners—we have reduced the universal credit taper from 63% to 55% and increased work allowances, with the result that nearly 2 million households will, on average, keep around an extra £1,000 on an annual basis.

The Government recognise the vital role that unpaid carers play each day and the additional challenges they have faced during the pandemic. From April, carer’s allowance will increase to £69.70 a week. Unpaid carers also have access to support through universal credit, pension credit and housing benefit, all of which include additional amounts for carers. For a single person, the carer’s element in universal credit will increase to £168.81 a month from April, and the carer’s amount in pension credit and housing benefit will increase to £38.85 a week. These amounts recognise the additional contribution and responsibilities associated with caring for those on lower incomes. Benefits for those who have additional costs as a result of disability or health conditions will also increase by 3.1%. These include disability living allowance, attendance allowance, incapacity benefit, personal independent payment and other means-tested benefits, the employment support allowance support group component and the limited capability for work and work-related activity element of universal credit.

Since the start of the pandemic, this Government have introduced measures to support the most vulnerable when needed. For example, since last November we have provided a £500 million support fund to help eligible households with essentials. The household support fund provides £421 million to help people in England with the cost of food, utilities and wider essentials, and we will continue to keep policies under review this year, basing interventions on the latest economic picture.

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

Can the Minister say, either now or in a written statement, how many overseas pensions will be increased and how many will not, and whether his Department will talk to the Treasury about including the excluded?

[David Rutley]

My hon. Friend is a doughty champion on this front, but all we are doing on these particular pensions is following a well-worn line in Government policy over many years.

Oral Answers to Questions

Peter Bottomley Excerpts

Monday 13th May 2019 Commons Chamber

[Guy Opperman]

The right hon. Gentleman rightly raises his constituent’s case; I have already spoken to him on two occasions. Our thoughts are with Mrs Worrall’s family and friends. The Government apologise unreservedly for the clerical error—it was a clerical error—that led to Mrs Worrall’s pensions payment being stopped. We have urgently reviewed our processes and acted so that benefits are no longer linked on our systems, to try to ensure that this does not happen again. There is an internal process review; I undertake to write to the right hon. Gentleman in the short term with what we know and with more detail when the urgent process review has taken place. I am including Mr Worrall in that process.

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

It would be helpful if every member of DWP staff were able to get to a Minister if something absurd was happening, rather than getting stuck in bureaucracy.

May I take the Minister back to his £1,600 extra? Will he review House of Commons briefing paper 01457, on the history of frozen overseas pensions for half our overseas pensioners? It is absurd that an agreement with New Zealand in 1948 and a written parliamentary answer in July 1955 should determine that people who leave this country to retire abroad do not get pension increases in half the countries around the world but do so in the other half. It is time that we had a proper debate and a proper decision, and got past the legalistic approach taken by this Government and previous ones.

[Guy Opperman]

My hon. Friend raises several points, but unquestionably the situation in relation to overseas pensions has been consistently enforced by every Government of every persuasion since the second world war, and there is no anticipation of changing that.

Of course, we will ensure that individual members of DWP staff up and down the country are able to go to their line managers and then to Members of Parliament or individual members of the Government on an ongoing basis.

Oral Answers to Questions

Peter Bottomley Excerpts

Monday 18th March 2019 Commons Chamber

[Alok Sharma]

The hon. Gentleman will, I am sure, be aware that since 2010 employment has gone up in every region and country of the United Kingdom. As I have pointed out, 75% of the new jobs are in high-level occupations. He talked about zero-hours contracts. He will know that there has been a drop in the number of zero-hours contracts over the past year. Ultimately, he talked about failure. The only failure we recognise is that absolutely every Labour Government have left unemployment higher than when they entered office.

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

We are glad to hear that employment has gone up in every region of the country. Will the Minister at some stage, if not today, put out a written statement on why it is thought that unemployment always rises with a Labour Government and employment increases with a Conservative Government?

[Alok Sharma]

We can all have our theories, but my hon. Friend is absolutely right that that is precisely what happens. What the Labour party should be doing is congratulating the Government on the work we have done over the past nine years to get employment up.

Social Security

Peter Bottomley Excerpts

Monday 4th March 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)]

I beg to move,

That the draft Social Security Benefits Up-rating Order 2019, which was laid before this House on 30 January, be approved.

In my view, the provisions in the order are compatible with the European convention on human rights. The order reflects the Government’s continuing commitment to increase the basic and full rate of the new state pension by the triple lock, to increase the pension credit standard minimum guarantee in line with earnings, and to increase carer’s benefits, and benefits intended to meet additional disability needs, in line with prices.

The Government’s commitment to the triple lock means that the basic state pension will continue to be uprated by the highest of rises in earnings, rises in prices or 2.5%. The triple lock has been an invaluable tool in combating pensioner poverty, and keeping it in place gives pensioners the financial security and certainty that they deserve. This year the increase in earnings was the highest of the triple lock figures. As a result, the basic state pension will increase by 2.6% to £129.20 a week for a single person. Consequently, from April this year the basic state pension will be over £1,600 a year higher than it was in April 2010. We estimate that the basic state pension will be around 18.4% of average earnings, which is one of the highest levels relative to earnings for over two decades.

Three years ago, the Government introduced the new state pension, which provides a transparent and sustainable foundation for private saving and retirement planning for people reaching state pension age on or after 6 April 2016. We have also committed to increase the full rate of the state pension by the triple lock. As such, from April 2019 the full rate of the state pension will increase to £168.60 a week—about 24% of average earnings.

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

If the Minister will not say this, may I? That increase does not go to half our overseas pensioners, including those in South Africa, Canada and Australia and other places—50 countries around the world. Does he agree that it is about time we considered that?

[Justin Tomlinson]

I thank my hon. Friend, who has campaigned tirelessly on this issue. It has been the case for some 70 years that we do not uprate those pensions, and at this stage there are no plans to make any changes to that.

On the additional state pension, this year the state earnings-related pension scheme and the other state second pensions, as well as protected payments in the new state pension, will rise by 2.4% in line with prices. With pension credit, we are continuing to take steps to protect the poorest pensioners, including through the pension credit standard minimum guarantee—the means-tested threshold below which pensioner incomes should not fall. That will rise by 2.6% in line with average earnings. From April 2019, the single person threshold of this safety-net benefit will rise to £160.25—over £1,800 a year higher than it was in 2010.

State Pension: Women born in the 1950s

Peter Bottomley Excerpts

Thursday 22nd November 2018 Westminster Hall

[Mr Peter Bone (in the Chair)]

Before we begin this important debate, it might help Members to know that the Prime Minister will make a statement in the House at 3 o’clock. If Members wish to speak in this debate they must return for the wind-ups, which will start at approximately 4 o’clock. Nine Back Benchers have indicated that they wish to speak. I do not intend to impose a time limit.

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

On a point of order, Mr Bone. I am sorry to interrupt proceedings before they have really started. Thank you for your guidance, although I am not one of the Members who will speak; I am unable to because of other engagements. Could the debate be relayed to another room, so that the many people who cannot get into the Strangers Gallery can listen to it? They have come here for that, and are currently excluded. It would be kind to let them hear it.

[Mr Peter Bone (in the Chair)]

Thank you for that important point of order. I entirely understand the frustration. I do not schedule debates. The debate could have been scheduled in the House where there would have been enough room for everyone. However, rather than postponing or stopping it, I think we should continue. It may help people to know that when debates happen in Westminster Hall a similar one often happens in the House at a later date. We should crack on with today’s important debate.

--- Later in debate ---

[Patricia Gibson]

I agree with everything the hon. Gentleman says. One of the most frustrating things that WASPI women have found in their quest for justice is not that they are not getting what they are asking for—bad as that is—but the wall of silence with which they have been met. It is as though they do not exist. That is not acceptable.

[Sir Peter Bottomley]

There have been too many occasions on which Pensions Ministers have said how many years women will get a pension for—once they get it. Can we make it plain that the question is what happens in the years before they get the state pension?

[Patricia Gibson]

The Scottish National party commissioned independent research into how this could be resolved, but the Government rejected it. As far as I can see, they have rejected every other potential solution proposed from every quarter. I would like the Minister to tell us how he thinks the matter can be progressed, because doing nothing is not a sustainable option—certainly not for the WASPI women.

--- Later in debate ---

[Alex Burghart]

Presenting the case in the way that the hon. Gentleman does is slightly misrepresentative, because the cost of not bailing out the banks would have been extraordinarily high and would have seen businesses all over the country go bankrupt and people go out of work. It would have damaged their lives and would have become a cost to the state. I simply cannot see things in the binary way that he sets them out.

In 1942, William Beveridge wrote about the purpose of his pensions proposals, saying that

“giving to each individual an incentive to continue at work so long as he can, in place of retiring, is a necessary attempt to lighten the burden that will otherwise fall on the British community, through the large and growing proportion of people at the higher ages”.

Under the last Labour Government, it was acknowledged that we must not reach a position where women would be expected to spend 40% of their adult lives in retirement—that proportion is due to increase continually. No Government could have sustained that without dramatically curtailing services for younger people. On top of those demographic concerns, the Pensions Act 2011 had to deal with the circumstances that were dictated by the great financial crisis of 2008.

[Sir Peter Bottomley]

My hon. Friend talks about the introduction in 1908 of the state pension age of 70, but he could have told us that it was reduced to 65 in 1925, and that the inequality of the earlier retirement age for women was introduced, I think, in 1940. I am not arguing with him; I am trying just to set the scene.

[Alex Burghart]

I am grateful for my hon. Friend’s scene setting. Forgive me if I skipped a sentence earlier— I should have said that the retirement age of 65 was introduced in the Contributory Pensions Act 1925, so I am grateful to have been put right.

The Pensions Act 2011 dealt with the circumstances of 2008 and was introduced in the context of the emergency Budget brought forward by the then Chancellor in 2010, which offered the triple lock. To remind Members, that guarantees, each and every year, a rise in the basic state pension in line with earnings, prices or a 2.5% increase, whichever is the greatest. That policy meant that between April 2010 and April 2016, the value of the state pension rose by more than 22%, compared with growth in earnings of about 7.5% and growth in prices of 12%. Pensioners saw their incomes rise at almost double the pace of the average worker in that period. In 2018-19, the state pension is more than £1,450 a year higher than it was in 2010.

We know that the triple lock will be in place for the duration of this Parliament. For people reaching state pension age after April 2016, a new pension has been introduced at a single flat rate of £159.55 a week, which also has been triple-locked. All the women affected by the 2011 state pension age changes will draw their state pension under the new system.

Personal Independence Payments

Peter Bottomley Excerpts

Monday 4th June 2018 Commons Chamber

[Ms McVey]

As I have said throughout, we look to get things right first time, but we have processes in place. If things are not right, there is a reconsideration process, and if that is not right, there is an appeal process. Cases are usually turned around because people bring in extra medical information, and more people are getting the higher rate than ever before. The hon. Lady is quite right, however, that we need to be able to give people the support that they need.

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

rose—

[Mr Speaker]

If the hon. Gentleman can assure me that he was here at the start of the exchanges, it would be a great pleasure to hear from him.

[Sir Peter Bottomley]

I was here 10 minutes before questions finished.

[Mr Speaker]

Excellent. I look forward to hearing from the hon. Gentleman.

[Sir Peter Bottomley]

It is good that my right hon. Friend can be answering for two individual claimants and that she has given the background about the increase in disability spending. May I also say, “Thank you,” for saying that we can refer to individual cases? I have a victim of the infected blood scandal who is being asked to attend an assessment, but I do not think that an ordinary PIP assessor will actually understand what that person has been through for the past 20 or 30 years. Some such things need to be dealt with far more sympathetically and appropriately.

[Ms McVey]

We must ensure that we understand the individual circumstances and the extra support that people need. That will come through this modern benefit, which really does acknowledge a wider cohort of disabilities than ever before. That is what we are trying to get right.

Housing and Social Security

Peter Bottomley Excerpts

Thursday 22nd June 2017 Commons Chamber

[Sajid Javid]

When it comes to fire safety, I think we should learn lessons from wherever we can—whether Wales or elsewhere. The hon. Gentleman will know that, since 2007, there has been a requirement for new buildings to have sprinklers.

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

I am intervening, at the suggestion earlier of the Leader of the House, having spent three and a half hours in the Chamber. This debate is largely about housing, but is it possible for my right hon. Friend the Secretary of State to hold a debate on leasehold? He could then look at whether the Government can intervene on the Mundy decision, which affects the extension of the leases of 2 million leaseholders, and carry on the work of his former deputy Gavin Barwell in reforming Lease, the Leasehold Advisory Service, so that leaseholders who, frankly, should be on commonhold can get a better service and avoid being abused, intentionally or unintentionally, by managing agents and freeholders.

[Sajid Javid]

I agree very much with my hon. Friend. It is important to continue the work on leasehold reform, and we will certainly take it forward. Let me take this opportunity to thank him for all the work he has done and the contribution he has made to the debate on that reform.

During the general election, we heard from the right hon. Member for Wentworth and Dearne and his colleagues about Labour’s housing policy, and no doubt we will hear more shortly. Let us be clear, however, that it was not just an attempt to wind back the ideological clock to the 1970s; it would have undone so much of the progress that we have made during the past seven years.

State Pensions: UK Expatriates

Peter Bottomley Excerpts

Thursday 20th April 2017 Commons Chamber

[Sir Roger Gale (North Thanet) (Con)]

I beg to move,

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.

As chairman of the all-party parliamentary group on frozen British pensions, and with cross-party support, I move this motion on behalf of some 550,000 UK citizens living in countries overseas whose pensions have been frozen at the point at which they left the United Kingdom, in some cases many years ago.

Those people paid taxes and national insurance contributions in Britain throughout their working lives, and elected to move abroad in retirement to be close to family and friends, or simply through personal choice. On the basis that—as my hon. Friend the Minister said in November—entitlement to state pension is based on a person’s national insurance contribution record, they paid their way and are entitled to receive their state retirement pension uprated and in full.

Let me make it clear from the start that this is a matter not of cost but of moral responsibility. It is a duty that has been disgracefully shirked by successive Governments of differing political persuasions since the mid-1960s. It is past high time to recognise that an injustice has taken place and to take a modest step, which I shall detail shortly, to redress a wrong that has been a running sore for too long. The motion calls on the Government to withdraw the social security benefits uprating regulations that effectively exclude overseas pensioners from pension uprating in all countries but those with which the UK has an historic, arbitrary and illogical reciprocal agreement.

My hon. Friend the Minister knows of the illustrious precedent for the motion. In 1998, a similar prayer against the Social Security Benefits Up-rating Regulations 1998 was tabled. It was signed by the then Opposition Chief Whip, now Lord Arbuthnot; my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), a former leader of the Conservative party and distinguished Secretary of State for Work and Pensions; the then leader of the Conservative party, now Lord Hague; my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), another former Secretary of State; and the then shadow Leader of the House, now Baroness Shephard.

All those years ago, the party of which I am proud to be a member recognised the need to right a wrong inflicted on those who, in many cases, have served their country in the armed forces, the foreign service and many other walks of life, and who have, collectively and severally, paid their way. We are now—and I trust will remain—in government, so we have the opportunity finally to address and put to rest a debt of honour that must be paid.

I quote a UK pensioner living in Rayong, Thailand:

“I am resident in Thailand, where I retired nearly 8 years ago, and my State Retirement Pension remains at the same level as when I left, because Thailand, unlike the Philippines, for example, is not a country where pension increases are paid…there are some points which I feel should be brought to the fore.

Successive governments have always argued that pension increases can only be paid in countries with which the UK has ‘reciprocal agreements’, and that to extend increases outside these arrangements would negate their ability to conclude other such agreements in the future. However, that argument is utterly threadbare, given that the government announced more than 20 years ago its intention not to make any further reciprocal agreements.

There is a common misconception that expats pay no UK income tax. In the case of pensioners this is totally untrue, because all pensions paid from the UK are subject to tax, and I pay as much as I would if I were still living in—”

his former home in the United Kingdom; I will not identify him at this stage. He continues:

“While pensioners such as myself are paying into the UK economy, we take nothing out, so we make no demands on the NHS or social care. Now, even if we fall ill on a visit to the UK we have to pay for hospital in-patient NHS treatment. If over the years a significant number of us decide that because of reduced circumstances we have to return to the UK, the extra costs in health and social care would outweigh a good proportion of the ‘saving’ of not paying us the increases.

There is uncertainty at the moment on the status after Brexit of expat pensioners living in the EU, and their future right to pension increases…I can’t speak for anyone else, but personally I would not ask for any back payment of the increases I have ‘lost’ in the last 7+ years. I would just be happy to feel that in the future I will have that little extra security of a few extra pounds to sustain me in the last years of my life.”

I will return to his points that refer to Brexit and a possible solution in a moment, but first let us take a look at some hard facts. There are 13 million recipients of the United Kingdom state retirement pension. A fraction over 1 million of them live overseas. Of that number, some 650,000 have their pensions uprated as they would in the United Kingdom because of the reciprocal arrangements already referred to. Baroness Altman said in 2016 that

“UK state pensions are payable worldwide and uprated…only where we have a legal requirement to do so.”—[Official Report, House of Lords, 24 February 2016; Vol. 769, c. 251.]

That means that many people are denied that uprating. In fact, some 551,000 are excluded from uprating and find their pensions frozen from the point at which they moved abroad, in spite of paying their taxes and national insurance contributions in the United Kingdom throughout their working lives. As my hon. Friend the Minister made plain in November 2016, pensions are based on national insurance contributions.

Those 551,000 people have made those contributions. However, we still have the ludicrous situation that a British pensioner living on one side of Niagara Falls, in Canada, receives a frozen pension while another living just a mile across the falls, in the United States, has their pension uprated every year. Additionally, some Caribbean islands enjoy uprated pensions, while other small countries and overseas territories do not, with unintended and perverse consequences.

The UK representative of the Government of Montserrat, Janice Panton, wrote to me to say:

“A number of Montserratians now living in the UK wish to return to take up residence on the island but are hindered from doing so due to the fact that should they emigrate to Montserrat—”

go back home, effectively—

“their pensions would be frozen. Many of these individuals have lived, worked tirelessly and paid their national insurance contributions over the course of many years. It now seems they are being victimised simply because they desire to return to Montserrat or another Overseas Territory.”

The representative of the Falkland Islands in the United Kingdom, Sukey Cameron, also wrote to me, saying:

“The Overseas Territories have a different constitutional relationship with the UK and are not independent Commonwealth countries; therefore they should not be treated as such. To quote from the 2012 White Paper on the Overseas Territories ‘…the underlying constitutional structure between the UK and the Territories, which form an undivided realm, is common to all.’”

Of course, it is common to all, except in the case of pension uprating, where it is not.

The human consequences of this injustice can be devastating and are illustrated by scores of communications that the International Consortium of British Pensioners and the all-party parliamentary group on frozen British pensions have received from expatriate UK citizens. A spokesman for the Parity or Poverty Group, which has members in Canada, Thailand, Turkey and South Africa, says:

“We are trying desperately hard to undo the predicament that’s driving us into poverty. I can see it on the horizon for myself as once affordable items are now out of reach. I dread the future for myself and my wife.”

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

No one could have prepared better for this debate than my hon. Friend, and by the end of it I hope we will have set forces in train that lead to a curing of this injustice.

[Sir Roger Gale]

We shall await the Minister’s response with great interest. I am grateful to my hon. Friend.

A former constituent of mine, and a friend, now living in South Africa, wrote to me to say, “I have been looking after my wife since her stroke and increased dementia, plus incontinence now, for over a year. Reviewing the situation with our daughter, my wife is slowly going downhill. I am heading that way, too. I am worn out. To help with catering and finance, we are now on to Meals-on-Wheels for four days a week and are shortly to arrange five day or even five and a half day care support. Right now, our medical aid—insurance—takes half our combined basic OAP pension and the new care plan will certainly take the other half. Our daughter looks after our finances and generously helps and tops up when needed.” That is what my former constituent, a friend, is now reduced to. Sadly, I learned only this morning that his wife died last week, leaving him not only in penury but, apart from the care and affection of his daughter, alone.

Bernard Jackson, 91 years old, has returned to the United Kingdom from Canada and says:

“I was brought up to believe that Britain was a fair country. It’s a disgrace, it has to end, it’s terrible to meet pensioners over here who say they have to come back to Britain because they can’t manage.”

Joe Lewis, 90 years old, who lives in Canada and has recently lost his wife, will be moving back to the United Kingdom as he can no longer cope with his frozen pension. After suffering a severe fall, Joe is increasingly struggling to afford living and medical costs. The only way he can make ends meet is to use up all his savings. Joe Lewis, a nonagenarian, says:

“All I want is my full state pension which I have paid into my entire life”.

Here is another anomaly: any returnee, including those visiting the UK for a couple of weeks to see family on holiday, is entitled to claim their full uprated pension for that period.

Of course, cometh Brexit, cometh another issue that will have to be addressed. The 492,000 British pensioners living in the 27 European Union member states and EFTA countries are protected by the social security provisions of the EU single market, but what will happen to their pensions when we leave the EU? A resident in France wrote to me to say:

“I have been a ‘victim’ of a frozen pension for the past 15 years having lived in Zimbabwe for 45 years and being forced to move to a EU country in order to get my pension... During my working life, I continued to pay Class 3 NI contributions to safeguard my UK pension and it was only when I reached age 65 that I found out that my pension would no longer be indexed, and this has cost me many thousands of lost pounds over a period of 15 years. Now the same issue is rearing its head because of Brexit.”

Will there be 27 different reciprocal agreements or one blanket agreement? Will former EU pensioners find their pensions frozen like those in Canada, Australia, New Zealand, the Indian subcontinent, Montserrat and other countries? Surely now, in the light of Brexit, is the time at least to start to put all expat UK pensioners who have paid their dues on an equal footing.

I return to the resident in Thailand who said that he

“would not ask for any back payment… I would just be happy to feel that in the future I will have that little extra security of a few extra pounds to sustain me in the last years of my life.”

Successive Governments, plucking figures out of the sky, have suggested that uprating overseas pensions would cost billions. In fact, the proposal that the all-party group supports, which goes nowhere near as far as the proposal that some would like and that justice probably dictates, is to uprate payments at the 2.5% from which UK-based recipients will benefit this year. That will cost not billions, but just £33 million. After five years, the budgetary impact will be £158 million. To set that in context, the triple lock costs the Government an extra £2 billion each year.

In the great scheme of Government expenditure, £158 million is small change—small change to settle a debt of honour, with no threat of legal challenge in respect of potential retrospective claims. That, surely, is a bill that, in the interests of a society that is fair for all, the Government cannot afford not to pay.

--- Later in debate ---

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

The House should thank my hon. Friend the Member for North Thanet (Sir Roger Gale) and the hon. Member for Leeds North West (Greg Mulholland) for the way in which they have spoken, and we look forward to the contribution from the Scottish National party. If my friend the Minister does not mind, I will talk through him, because he will not be authorised to make the kind of commitment that this House is asking for. The questions we have to address are: is what is going on fair? Is it logical? Is it right? The answer to each of those is no, and I thank John Markham and the International Consortium of British Pensioners for the briefing they sent, which points out that the situation is grossly unfair, completely illogical and morally wrong.

To illustrate the point, were I to have retired overseas in the “wrong” place, in the seven years since I could have taken the state pension, I would have lost £5,000. I plan to be re-elected; in five years’ time—we may have an election then—the loss would be £13,000. Clearly, I can afford it, as when I retire I shall have a second pension. It will come from the state, but any increases in it will not be determined by whether I live in one part of the West Indies or another. Just to make sure that the Minister is paying attention, perhaps he would like to tell us in which of the areas represented by the West Indies cricket team people would get increases. If I were to retire to the United States part of the West Indies, would I get an increase? Yes. If I were to retire to the Dutch part of the West Indies, would I get an increase in my state pension? Yes. If we went through some of the independent countries, we would hear the Minister tell us about the difference between Guyana and Barbados.

The point has been made about the lack of a parallel between Canada and the United States. As my hon. Friend the Member for North Thanet asked, what is the reason for the difference in position in Thailand and the Philippines, except total chance? The point about this House is not to leave things to total chance. Old age pensions were introduced in 1906, or thereabouts, by a combination of Lloyd George and Winston Churchill to make sure that people were not left struggling in their old age.

Ministers may have been briefed to say that there is social security in some countries, but not in many others—Zimbabwe, which has been mentioned, perhaps being one of the worst examples. People who were asked by this country to stay on during Ian Smith’s illegal declaration of independence now find themselves in penury. That is made far worse by the freezing of their state pension.

The number of overseas pensioners who are registered to vote has doubled since the last election, and it could double again and again. If instead of there being 400 of these people for each constituency, there were 800 or 1,600, people might start paying more attention more widely, but the arguments for unfreezing to deal with this injustice should not be about numbers of votes; they should be about whether unfreezing is right or wrong. Let us suppose that at the moment four pensioners in every 100 are affected, and the issue affects a third of their state pension. We can clearly cope with the sum involved. We will in any case be coping with a growing number of pensioners—give or take, depending on the lifting of the state pension age. When we were considering decimalisation in the early 1970s, somebody said, “This will confuse the elderly. Let’s wait until they are all dead.” The fact is that the situation for overseas pensioners will get worse until we can establish a fair principle right across the board.

I do not want to repeat all the speeches I have made in the past, but briefly and clearly, we have to ask Ministers: when will the time come when a Minister of a Conservative, Labour or coalition Government of any kind can stand up and say that they will put before Parliament, or accept from Parliament, proposals that are fair, logical and right?

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[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

I hope we would all agree—I know you have been in the Chair for only some of the debate, Madam Deputy Speaker—that we have had an interesting debate. Before I attempt to address the points that have been raised, I would like to thank those who have spoken. In particular, I thank my hon. Friend the Member for North Thanet (Sir Roger Gale) and the hon. Member for—I have been practising this for quite a long time—Ross, Skye and Lochaber (Ian Blackford) for securing the debate, which has been wide and varied. It concerns an important subject, which I do not take lightly.

The hon. Gentleman was very kind in the comments he made about me, and I would like to say something about the way he has conducted himself while I have been Pensions Minister. I have disagreed with him and the Labour party spokesman, the hon. Member for Stockton North (Alex Cunningham), on a lot of things, but we have also agreed on a lot of things. However, when we have disagreed, we have discussed things properly in this Chamber, in Committee and personally, and I wish all Government and Opposition relationships were like that.

On this particular subject, however, I have to say that I disagree with a lot of things that the hon. Member for Ross, Skye and Lochaber and my hon. Friend the Member for Worthing West (Sir Peter Bottomley) have said.

[Sir Peter Bottomley]

I know that that remark may have been addressed to just some of the things we said, but one of the things we said was that what is happening at the moment is not fair, not logical and not right. Is the Minister trying to say that it is fair, logical and right?

[Richard Harrington]

Well, it is about the subjectivity of those words, if I may say so. I will try to address some of the points he made, but I cannot successfully answer his cricket team question. However, given that our civil servants will probably have less to do over the next few weeks than they have had to do over the last few weeks, I will formally write to him. As a child, with “Wisden” and everything else, I would probably have been able to answer his question myself, but I am afraid I cannot do that now.

As I was about to say before I was hit for six by that intervention, the United Kingdom state pension is payable worldwide, regardless of the recipient’s country of residence or their nationality. I say that formally on the record because were I a member of the public watching the broadcast of this debate or reading it in Hansard, I could quite easily get the impression, when we talk about scandals and things like that, that people were leaving the country and not getting their pension at all. The state pension is paid to people who are entitled to it when they leave the country, but increased—“uprated” is the expression in this context—abroad every year only when the recipient is in certain areas: in the European economic area, Switzerland, or a country with which the UK has a specific reciprocal agreement that allows for uprating. This is a long-standing policy that has remained consistent for about 70 years, and, as has been said, it has been the policy of consecutive Governments of all persuasions.

I recognise that this subject arouses strong opinions, and some of the language used is very concerning. Please do not think, Madam Deputy Speaker, that I think that the language used has been improper in any way, but it is very strong language about people suffering hardship and so on.

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[Richard Harrington]

I perfectly accept that in some cases people have no practical choice, but many who emigrate decide to do so for a number of reasons, including personal ones. When people move away, pensions are, by and large, part of their calculations, as is the cost of living.

The hon. Member for Ross, Skye and Lochaber was eloquent, as usual, in making his point about uprating the state pensions of people residing in the European economic area and Switzerland. It is a requirement of UK law that those payments be the same as those made in the UK. However, as everyone is aware, the article 50 process is under way, and in accordance with what happened in the referendum and everything that has been discussed in this House, the UK is leaving the European Union. The Prime Minister has made clear that securing reciprocal rights is one of the top priorities. The rights and entitlements that will apply following the UK’s exit, such as those relating to the UK state pension paid to individuals living in member states, are subject to the wider negotiation on our future relationship with the EU. The Government have made it clear that we plan to strike an early agreement on the rights of EU citizens living in the UK and, obviously, vice versa. As the Prime Minister has said, it is in no one’s interests for there to be a cliff edge when we leave the EU, so the current laws and rules will, wherever practicable, continue to apply, to give certainty to individuals and businesses.

[Sir Peter Bottomley]

We understand the limitations on the Minister, and I hope that anything we think will not be taken personally by him or anyone else. I remind him of the Old Age Pensions Bill debate on 10 May 1907, when the Member moving the Bill’s Second Reading said that Chancellors always want to stop people getting “Money! money! money!” My hon. Friend has said that we are now likely to make decisions that will affect hundreds of millions of people, so surely now is the time make a small change for fewer than 500,000 people. I ask him to commit to revisiting the issue after the election and to looking at it properly.

[Richard Harrington]

I thank my hon. Friend for his intervention. Perhaps he was present during that debate in 1907; I was not, but I look forward to reading about it.

Those who are eligible for a UK state pension can have their pension paid wherever they choose to live. The rules governing the uprating of pensions are straightforward, widely publicised and have been the same for many years. The Government’s position remains consistent with that of every Government for the past 70 years. The annual costs of changing the long-standing policy will soon be an extra £500 million, which the Government believe cannot be justified.

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[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

I will have a go at responding to the hon. Gentleman’s question. I do not know the answer to it, but I will find out straight away and communicate it to him. I suspect that this is a matter that is decided by the civil service based on previous protocols about purdah and so on, but I do not feel experienced enough to give him the answer that he wants and deserves.

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

Further to that point of order, Madam Deputy Speaker. The Minister has been very clear and helpful. If the practice is for such helplines, which are for our constituents rather than for us, to be closed down before Parliament has stopped sitting—before we stop being Members of Parliament—may I suggest, through you, that those who are listening should change the practice and make sure that that happens when Parliament is dissolved, and not simply because an election has been called?

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

Further to that point of order, Madam Deputy Speaker. The Minister has made it clear that he will communicate with the shadow Minister, but can we ensure that there is communication with all Members of the House if this closure happens? We hope that it will not, because it will impact all our constituents in a very big way.

Digital Equipment Ltd: Pension Scheme

Peter Bottomley Excerpts

Tuesday 17th January 2017 Westminster Hall

[Corri Wilson]

The right hon. Lady makes a valid point that campaigners are not asking for indexation to be backdated, which would cause considerable difficulties for the companies involved. I will come to that point later.

I empathise with Hewlett Packard and other businesses that inherited defined-benefit schemes through expanding their operations during the boom years. They are all experiencing a global turnaround and an extremely challenging marketplace. Difficult decisions have to be made, and looking after the former employees of businesses that have long since been subsumed has to be balanced with current business concerns and the welfare of current workforces. Hewlett Packard is breaking no laws, and I understand that it fully appreciates the impact of its decision on its pensioner population and that is taken into account during annual reviews. However, I have greater sympathy for the concerns of the pensioners who have pensions with HP that will be frozen due to not being covered by legislation, and I would like the UK Government to take action to address the problems with defined-benefit schemes.

The Hewlett Packard Pension Association claims that withheld cost of living increases have so far cost pensioners an average of £24,000 compared with their colleagues whose contributions were made post-1997. That has led to severe financial hardship for many of those pensioners and has resulted in them being unable to afford an ordinary living pattern, being on the verge of poverty and requiring Government subsidies in the form of income support benefits.

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

I speak because one of my constituents has been in contact with me. I have explained that I cannot stay for the whole debate. Is the hon. Lady essentially saying that it is the older, poorer pensioners who do not get increases, and the younger ones, who earn more, who do?

[Corri Wilson]

I thank the hon. Gentleman for his intervention. The people who have paid in for the longest are getting the least benefit back from the scheme, although I recognise that pension schemes have changed.

I would like to hear from the Government what options, if any, are open to scheme members. The Pensions Minister has stated that defined-benefit schemes will be looked at early this year and he intends to consider what the Government can do to tweak the environment of those schemes. Is indexation increases for all defined-benefit pension schemes one of the tweaks that he will look at? The change that HPPA is seeking is for the discrimination between pre-1997 and post-1997 contributions to be removed from legislation, and the minimum permissible increases for all defined-benefit pensions in payment in future to be indexed in line with increases in the retail prices index. Will the Government look at that in their forthcoming Green Paper?

The Scottish National party is committed to ensuring dignity in retirement for all pensioners in Scotland, and although many recent debates have focused on reducing the statutory minimum requirements rather than increasing them, it is important that we examine closely what will bring about fairness and sustainability and deliver that dignity. Those are the issues I want to address in opening the debate. I know that other hon. Members wish to participate, so I will draw to a close by appealing to the Minister to take into account the situation that, as we heard earlier, people—not just Digital pensioners—find themselves in.

Pension plans are made over decades. They are long-term investments in our future to ensure that we can survive when we are no longer working and to ensure that we are not a burden on the state or our families. However, it appears that plans that seemed sound at the time have turned out to be considerably less appealing 20, 30 or 40 years later. Too often, people pay into pension pots—whether private company pensions or indeed state pensions—all their lives but find that, when they retire, the goalposts have been moved. To paraphrase our national bard, the best laid schemes have indeed gang a-gley. I look to the Government and the forthcoming Green Paper to start addressing some of those issues on behalf of my constituents, and so that future generations can plan for their retirement.

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

I apologise in advance: I will not be here at the end because I will be in a meeting with Equitable Life, which was just mentioned by the hon. Member for Central Ayrshire (Dr Whitford). May I make one positive suggestion, almost as an intervention, open to those pension funds, trade union funds and insurance companies that hold our money and own Hewlett Packard shares? They should ask HP whether it thinks it is socially responsible to discriminate between the different groups of UK employees it has taken over by acquisition. It seems that it should be asked to say to its shareholders—whether or not at the annual general meeting—whether it thinks the savings it is making are justified and whether it would like to illustrate what the pension arrangements are for their top executives and what those are for those who were in businesses in Ayrshire and other parts of the United Kingdom when it made its decisions. Is it lawfully open to putting the pensioners in the situation suggested by the hon. Members for Ayr, Carrick and Cumnock (Corri Wilson) and for Central Ayrshire? If so, it should do that without delay.

[Steve McCabe (in the Chair)]

I will now call the Front Benchers. You will have noticed that we have more time than we might have expected, which means we can allow about 10 minutes—probably no more—for the SNP and Labour Front Benchers and about 20 minutes for the Minister. You are not obliged to take that time, and make sure you leave at least three or four minutes for the mover of the motion to wind up.

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[Alex Cunningham (Stockton North) (Lab)]

It is an extra special pleasure to serve under your chairmanship, Mr McCabe—I prepared a seven-minute speech, you suggested I might get five minutes and I now have 10. That is so unusual in this place.

I congratulate the hon. Member for Ayr, Carrick and Cumnock (Corri Wilson) on bringing this matter to the House for us to debate. I am pleased she has the time do so, as she is doubtless preparing for a series of suppers over the next couple of weeks to mark the special day set aside for Robert Burns. Had he been alive today, he would, I believe, have been a constituent of hers.

Other hon. Members have explained the background to this issue. The pension plan changed hands from Compaq, which acquired Digital Equipment Ltd, to Hewlett Packard when it acquired Compaq in 2002. Hon. Members have also highlighted the legislation that determines that payments prior to 1997 are not entitled to increases in line with inflation. I welcome all the contributions that have been made.

I confess that, until Wednesday of last week, I was not aware of this particular failure, which has resulted in what appears to be the unfair and inconsistent treatment of thousands of pensioners who have a defined-benefit pension with Hewlett Packard. Despite legislation being in place that states that pension providers are under no legal obligation to increase the value of a pension in line with inflation, we are facing a situation, not unlike that facing the Women Against State Pension Inequality campaign, in which people find themselves at a disadvantage simply because they were born in a particular timeframe or had worked prior to particular legislation being introduced.

Through my research, I found that the average pension paid to Digital pensioners in 2002 was £6,008, which would now be worth £9,070 if it had kept in line with inflation—that is 50% more, and would go a long way in anybody’s home. As we have heard, when the pension plan was held by Digital Equipment Ltd and then Compaq, both companies made discretionary increases. However, once the plan was acquired by Hewlett Packard, it received only two token 1% rises, with no increases in the past 14 years. That is not good enough. The value of the pensioners’ money has decreased, the cost of living has increased and we once again face the crisis of vulnerable people facing increased difficulty and being on the verge of poverty in many cases.

[Sir Peter Bottomley]

The thought going through my mind is that, when I go back to my office, I find Parliament-supplied equipment made by Hewlett Packard. I also bought my own printers from Hewlett Packard. I am beginning to wonder whether I knew enough to regard it as a reputable firm that I should go on patronising.

[Alex Cunningham]

I certainly wonder the same thing; I have something to say to the Minister specifically on that—not about my personal choices or the hon. Gentleman’s, but about the Government’s.

Hewlett Packard can hide behind the law, and has for years, but that does not mean that what it is doing is right. When we—a group of north-east England MPs—meet representatives from Hewlett Packard a week on Monday, I intend to challenge them specifically on the decision. Despite being a large company with a substantial UK turnover, it is clearly shirking its responsibility to ensure that people who worked for a company that it took over receive the same level of support as before. Another parallel between this case and the plight of the WASPI women is that there has been no real opportunity for the people affected to make up for the shortfall in the value of their pension.

How has Hewlett Packard dealt with other pensioners in its group? Much, much better. Pensioners in all of Hewlett Packard’s European subsidiaries, except in the UK, have received regular cost of living increases. This is a case not of a business being unable to increase pensions in line with the cost of living, but of a large international corporation using a loophole in UK legislation to give it a window to not fulfil what is a moral duty. I wonder what its problem is with treating its British pensioners the same as others.

As we have heard, Hewlett Packard is not a struggling business that cannot make ends meet. It is actually the Government's largest IT supplier, and makes sales of more than a £l billion a year to the Government alone. It is a company that, in 2015, had revenues of $139 billion—not million—and profits of $7 billion. The UK Government spent £1.2 billion with the company in 2014-15, which was 25% of Hewlett Packard’s British turnover. Its highest-paid UK director received £1.64 million in 2014 and £920,000 in 2015. It would cost that company about half the cash paid to that one UK director to pay a cost of living increase this year—half the cash that one person earned in wages last year.

The pensioners affected served their time working for HP and the companies it took over. They thought they were safe in the knowledge that they had a pension and were doing everything they were supposed to. I believe the Minister should put pressure on Hewlett Packard, as I will a week on Monday, to fulfil its moral responsibility, although not a legal one, to ensure that those workers are treated fairly in retirement.

Are the Government really content with doing more than £1 billion-worth of business a year with a company that has cocked a snook at this group of British pensioners? I hope the Minister will agree that even though companies are not legally required to pay annual cost of living increases in line with inflation for workers who made contributions prior to 1997, it is a scandal that there are thousands of pensioners in this country right now whose pensions’ value has dropped significantly, and who are probably now relying on social security benefits to get by.