Pensions Uprating (UK Pensioners Living Overseas)
Debate between Shailesh Vara and Peter Bottomley(8 years, 1 month ago)
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Ian Blackford
I made it clear in my speech that I recognise that this has been happening since the 1940s. I absolutely acknowledge that. This has happened under all Governments. None the less, we have the opportunity today to respond to it in the correct manner.
Sir Peter Bottomley
The House and the Minister will recall that each year a statutory instrument, or equivalent legislation, is brought before the House to continue the policy, so none of us can say we are blameless. The fact that a small minority of us have so far been voting against what the Government propose to Parliament is our fault for not recruiting more people. The best people to recruit would be the Chancellor and the Prime Minister, and then the Ministers at the Department for Work and Pensions who have to face up for the Government and will be able to pass the responsibility on to those who carry the responsibility—the most senior Ministers in Government.
Mr Vara
I am grateful to both hon. Members for clarifying that point. I was simply pointing out an inconsistency on the Order Paper. For the sake of good order, I wanted to make clear that although yearly decisions have been taken by the Government, they are consistent with the policy undertaken by successive Governments from both sides of the House.
The UK state pension is exportable worldwide, regardless of recipients’ countries of residence or nationality. Successive Governments have taken the view that all those who have worked in the UK and built up an entitlement to state pension should be able to receive it. We have no plans to change this arrangement. However, the state pension is only increased, or uprated, each year where the recipient is resident in the European Economic Area or a country with which the UK has a reciprocal agreement that allows for uprating.
The policy on this issue has been consistent for 70 years, including under the Governments of Attlee, Wilson, Blair, Macmillan, Thatcher and Major. To uprate all state pension payments, regardless of a recipient’s country of residence, to the rate currently paid in the UK would cost in excess of an extra half a billion pounds a year. This amount would increase significantly over time. If arrears were to be included, the cost would be in the billions of pounds. Some have suggested partial uprating, but while this may cost tens of millions of pounds in the short term, the annual cost of the policy would converge to that of full uprating in the long term.
Sir Peter Bottomley
It might help if the Minister, either today or in the next Session, could tell us the last time the Government voluntarily negotiated a reciprocal agreement with another nation or territory. Secondly, since the last negotiation on a voluntary reciprocal agreement, how many other countries have been brought into the uprating for other reasons, such as accession to the EU?
Mr Vara
I can certainly partly address my hon. Friend’s question. No new commitments allowing for uprating have been made since the 1980s. As far as the other information he seeks, I am more than happy to write to him.
We have to recognise that resources are limited. The Government have to make judgments and take difficult decisions about how best to use limited resources. The majority of pensioners abroad live in countries such as Australia, Canada, New Zealand and South Africa. The rules in those countries vary. Some have largely means-tested pension systems, whereby a significant proportion of any increase in the amount of the UK state pension would go to the Treasuries of those countries, rather than the pensioner. I should add that many people who voluntarily move abroad do so before they have reached pensionable age. As such, many of them may well have been able to build up some pension provision in the countries they have emigrated to.
We should remember that the decision to move abroad is a voluntary one. It remains a personal choice dependent on the circumstances of the individual, which will differ from person to person. The implications for their state pension is just one factor in that decision. There is no evidence of a proven behavioural link between the uprating policy for the state pension and pensioner migration.
Mr Vara
With leave of the House I would like to make some brief comments. I am mindful that this is a Backbench Business Committee debate, and that it is not normal for Front Benchers to have a second go. I do not want to set a precedent, so I will just make one or two concluding comments about issues that have been raised.
Bilateral agreements were mentioned, and those are normally negotiated on the basis of compatibility of systems. That reciprocity is achieved between the two nations, and respective costs are broadly balanced. Canada has more than 150,000 recipients of the UK state pension, but any new bilateral agreement would not achieve reciprocity and would be disadvantageous to the UK taxpayer.
I pay tribute to my hon. Friend the Member for North Thanet (Sir Roger Gale) for all the work that he has done consistently over a number of years on this issue.
Sir Peter Bottomley
On a point of order, Madam Deputy Speaker. The logic, I think, is that if a reciprocal agreement may be done at no cost, there would be no reciprocal agreements anywhere.
Madam Deputy Speaker
The hon. Gentleman knows that I cannot answer that because it is not a point of order. It is a point of debate, and the Minister is being brief because he has the leave of the House to speak again.
Transitional State Pension Arrangements for Women
Debate between Shailesh Vara and Peter Bottomley(8 years, 4 months ago)
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Sir Peter Bottomley
My hon. Friend is saying some fair things about the Opposition and they do not like it. Will he turn his mind to a fair thing that I want to say about the women who are directly affected? The issue is that people who were born within 12 months of each other can have retirement ages nearly three years apart. That is where better transitional arrangements are needed. We all know that this Government have had to put right many things that previous Governments have got wrong, but this is something we need to get right for ourselves.