Pensions: Expatriates

Debate between Roger Gale and Sarah Olney

Tuesday 20th May 2025 Westminster Hall

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to serve under your chairmanship, Mr Dowd. I thank the hon. Member for Farnham and Bordon (Gregory Stafford) for securing this debate.

Nearly 13 million UK citizens receive the state pension, and around 1.2 million of them live outside the UK. Most of those people are entitled to state pension increases because they live in the European economic area or in the 15 other countries with which the UK has signed an agreement. In return for uprating the state pension, those countries have promised to continue supporting their own citizens living in the UK.

It is right that UK citizens who have diligently paid into the UK national insurance system over many years are entitled to receive their UK state pension, whether or not they decide to move abroad. However, the issue at the forefront of today’s debate is whether pensioners who reside overseas receive annual increases to their pension.

As other hon. Members have set out, this depends on the specific country in which a person lives. My Liberal Democrat colleagues and I know it is unfair that some UK pensioners abroad receive state pension increases while others do not, simply because of the country in which they live, not because of the contributions they have made to the UK national insurance system. Addressing that is a matter of fairness and equality, especially for those who have paid into the UK system for their entire working lives.

There has been a long-standing campaign to rectify this discriminatory system. However, the last Conservative Government refused to take any positive steps to increase the number of reciprocal agreements, which would have had the effect of uprating pensions. In fact, it is disappointing—although unsurprising—that under the last Conservative Government, agreements lapsed and the best interests of both British nationals residing overseas and non-British pensioners residing in the UK were neither prioritised nor championed.

We saw catastrophic economic mismanagement under the last Administration, with spiralling inflation rates and a soaring cost of living. That hugely exacerbated the gap in the value of pensions paid to recipients in countries with reciprocal agreements and those paid to recipients in countries without, with a completely unacceptable impact on hundreds of thousands of pensioners.

The majority of pensioners who live overseas receive pension increases because they live in countries with reciprocal agreements. However, many fall through the gaps and are left struggling. Currently, half a million UK pensioners living overseas do not receive the annual state pension increases that those in the UK and in certain other countries are entitled to. This issue affects my constituents and the constituents of many hon. Members. Their pensions are effectively frozen at the rate when they first started claiming—sometimes decades ago. This frequently leaves long-term pensioners abroad significantly worse off over time.

The UK Government have stated that they uprate pensions only in those countries where there is a mutual agreement. Many of those agreements have not been updated or renegotiated for decades, and no new ones have been signed since 1981. Countries such as Australia and Canada have repeatedly requested new agreements, but the UK has declined. Frozen pensions are the norm in countries such as Australia, Canada, New Zealand, South Africa and parts of the Caribbean and Asia, despite significant British expatriate populations. It is critical that the Government tackle this injustice and take steps to ensure that all pensioners receive the support to which they are entitled. However, it is also critical that this comes alongside a fair deal for the UK taxpayer.

Rather than unilaterally increasing the state pension for UK citizens living abroad, I urge the Government to prioritise entering new arrangements with other countries that would manage costs and provide oversight. That would be more affordable and provide a better framework for monitoring payments. Colombia, Mongolia, Thailand, Uruguay, Brazil, Australia and Canada have all approached the Government in the past decade to ask for a reciprocal agreement, and each time the Government have refused.

We have seen the Government enter new bilateral and multilateral trade negotiations over the last few weeks. As they work to build new trade partnerships with countries across the globe, there is a real opportunity to speak out for thousands of British pensioners who currently face unfair financial hardship. I urge the Minister to ensure that existing agreements are not allowed to lapse. The Liberal Democrats also call for the inclusion of reciprocal pension agreements in future trade deals. More broadly, the Liberal Democrats believe that the Government should conduct an independent review of frozen pension policy, an issue that has been raised with me time and again by constituents.

The previous Conservative Government abandoned pensioners and totally failed to give them proper support. This Labour Government have also treated pensioners poorly by cruelly ripping away the winter fuel payment. The Liberal Democrats are proud to be the ones who introduced the triple lock, lifting thousands of vulnerable pensioners out of poverty.

[Sir Roger Gale]

It saddens me enormously that the hon. Lady is trying to make a partisan case, simply because—as I recall, and I think I do recall correctly—a member of her party was the Pensions Minister in the coalition, and one of many pensions Ministers who stood by the present policy of refusing to allow these pensions to be paid. The blame lies across the board, not with any one political party.

[Sarah Olney]

I am grateful to the right hon. Member for his intervention; his memory obviously goes back further than mine on this issue. However, we are dealing with the current situation, and the Minister here today is the person who currently has the power to do something about it. I am merely reflecting on the set of circumstances that led us here.

What I will say is that, in the Liberal Democrat manifesto for the last election, we committed to the triple lock. We remain committed to the triple lock, and I will take further opportunities to ask the current Minister, with the power currently to do something about this issue, to redouble his commitment to it. I will also make the point that, as I am sure the right hon. Member will agree, that this Government are not doing everything they can for pensioners.

The Liberal Democrats are looking to the future, and we want to build a country that is the best place in the world in which to save for and enjoy retirement. We want to give everyone the chance to enjoy a decent retirement, by developing measures to end the gender pension gap in private pensions and to ensure that working-age carers can save properly for retirement. We must also improve the state pension system by investing in helplines to ensure quicker responses to queries and resolution of underpayments, as well as ending the scandal of lost top-up payments by overhauling the processing system and providing proper receipts.

The Liberal Democrats are proud to be the party that champions the rights and protections of pensioners. We will continue to hold the Government to account to ensure that a fair outcome is reached for all pensioners—both those who reside in the UK and those who live abroad.

House of Lords (Hereditary Peers) Bill

Debate between Roger Gale and Sarah Olney

2nd reading
Tuesday 15th October 2024 Commons Chamber

[Sarah Olney]

Regrettably, the right hon. Gentleman has not been listening to what I have been saying. Liberal Democrat policy is to have an elected second Chamber. We welcome these measures as a step towards a democratically elected Chamber.

[Sir Roger Gale]

I have long advocated—with, I think, the support of my right hon. Friend the Member for Goole and Pocklington (Sir David Davis)—the abolition of the House of Commons, the abolition of the House of Lords, and instead four national Parliaments, each with a First Minister, and an upper House dealing solely with defence, foreign policy and macro-taxation, which was the original purpose of Parliament. Why is the hon. Lady prepared to go half hog rather than the whole hog?

[Sarah Olney]

I must say, I regret that the Conservatives did not win a mandate in July for the kind of wholesale reform that the right hon. Gentleman is proposing. As I say, the Liberal Democrat policy has always been for an elected second Chamber. That is not what the Bill delivers, but we are looking for the Government to go further—far further than the Conservatives did in the previous 14 years. [Interruption.] I find it so extraordinary that Conservative Members are suddenly all converts to the cause of Lords reform when they have done nothing about it for a decade and a half—it is insane. I say to both right hon. Gentlemen who have intervened on me that Liberal Democrat policy is for an elected upper Chamber, but getting rid of the hereditary peers is a welcome first step, and that is why we will support the legislation.

We must do all we can to restore public trust in politics after the chaos of the last Conservative Government. By removing this unelected and undemocratic aspect of our Parliament, we will move closer to that goal.