Pensions Uprating (UK Pensioners Living Overseas)

Debate between Charles Walker and Ian Blackford

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 ---

[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?