State Pensions: UK Expatriates — House of Commons, 2017-04-20
Topic: Labor
Ian Blackford (Scottish National Party, Centre-left): It is a pleasure to follow the hon. Member for Worthing West (Sir Peter Bottomley), who made a gracious and fine speech about why this House, working cross-party, must deal with this issue. I commend all the other Members who have spoken in this debate, too. Let me say to the Minister that I suspect this is the last time in this Parliament that we will be discussing pensions matters. I have always enjoyed our spats across the Dispatch Box. I know he is an honourable and decent man, and I ask him to reflect carefully on all the speeches made this afternoon and to give us an indication that the Government are prepared, on the basis of affordability, to deal with this very real injustice that too many people are facing I am grateful to the Backbench Business Committee for granting this important debate on a motion standing in my name and that of the hon. Member for North Thanet (Sir Roger Gale). I am also grateful but saddened by the fact that we have to be here today debating this issue, which is fundamentally about fairness and which should, as has been said, have been resolved many decades ago The motion addresses the rights of just over 1 million UK pensioners who live overseas. We are talking about those who have paid national insurance on the basis that the payments made to the UK Exchequer entitle an individual to a UK state pension. When someone makes national insurance contributions, building up their entitlement, there is nothing that suggests that their right to a full pension will be determined by where they choose to live in future. Each individual has earned that entitlement, and it should be honoured. It is a simple matter of entitlement in what ought to be a contractual arrangement The Government repeatedly call the state pension a benefit, but that argument is undermined by the basic principle that entitlement is earned by making contributions. To achieve a full UK state pension, a person needs to have accrued 35 years of payments. In such a regime, why should someone’s place of domicile affect their rights? The UK is the only member state of the OECD that does not confer full pension rights, including the annual uprating of pensions, to those who have made contributions. It is simply not right that we discriminate against pensioners because of where they live; and let us make no mistake: that is what it is—discrimination. It is a failure of the United Kingdom to accept its responsibility to give full pension entitlement to those who have earned that right A person’s entitlement to the annual uprating of the state pension is determined by what country they live in. Some 679,000 UK pensioners who live in other countries do get the annual uprating, but there are 551,000 whose pensions are frozen at the level at which they first received their state pension when living abroad. Someone who is now aged 90 who had retired aged 65 in April 1991 would, had they qualified for pension uprating, now be receiving £119.31 per week; if their pension was frozen at the 1991 level, their weekly pension would be £52 per week. That is without justification. Such an individual would have lost out on £39,489 of pension income over a 25-year period as a consequence of their being in receipt of a frozen pension and denied their full rights. Think about what that means: by refusing to grant uprating, we are impoverishing our pensioners The average amount received by a pensioner with a frozen pension is just £2,258 per year, whereas the average for a pensioner living in the UK is £7,198 per year. We are denying pensioners income that rightfully ought to be theirs. Many will have to receive support from relatives, or perhaps they will have to return to the UK, where the cost of supporting such elderly residents is invariably higher when health and other social costs are taken into account. We also have to think about the fact that many people came to this country to work, often for many decades, and want to return to their country of origin in retirement. Such folk are put off by the reality of potentially being penalised through the receipt of a frozen pension. Where is the humanity in this? Where is the dignity in stopping people who have given long service to this country and paid their way retiring as they wish? They want to know that they will receive their full pension rights. This is a wrong that we must deal with. People who come to this country should not be penalised when they choose to go home Other countries see the current situation as a diplomatic grievance, and that will no doubt be a factor when the UK discusses trade deals. Other countries are going to turn around and say, "You want a decent relationship with us, but you are not prepared to treat your pensioners who live in our country fairly." The fact that we are unique in the OECD in not accepting our obligations does not go down well with other Governments. We need to show leadership, and that we will stand by those who have earned a pension entitlement. The International Consortium of British Pensioners has been mentioned by many speakers. I commend the consortium for the work it has been doing with the all-party group and the research it has conducted, which shows that because of the lower health and social care costs of somebody not living in this country, there is a saving of £1,575 for every pensioner who moves abroad. Such savings would partly offset the costs of annual uprating The House debated frozen pensions on 11 May last year. This debate follows other debates on this matter going back over the past few decades. The hon. Member for Worthing West mentioned Winston Churchill at the turn of the century; indeed, his grandson, also Winston Churchill, was involved in this matter, too. I have been sent a copy of a letter sent in 1993 by the younger Winston Churchill, the then Member for Davyhulme, to a retired pensioner living in Australia called Victor Humphries. Churchill stated in his letter that he hoped the "Government may be shamed into taking steps to honour its commitment to expatriate pensioners" He went on: "I have no doubt that if sufficient weight of Parliamentary support can be demonstrated for redressing this clear injustice, the Government will have no alternative but to back down." Winston Churchill was right in 1993, and all the Members who have spoken in this debate are right in 2017. It is shameful that, collectively, we have not yet dealt with this issue There is, of course, a topical aspect to the debate. Brexit hangs like a black cloud over this issue. Of the 679,000 UK pensioners who do receive an annual uprating, 492,000 are currently protected by the social security provisions of the EU single market. What is going to happen to the rights of those 492,000 UK pensioners post-Brexit? Will the Minister commit today to the continuation of the annual uprating for those living in EU member states? We often hear from the Government how they want to protect the rights of UK citizens living in Europe. Many of those citizens will be listening to or will hear about this debate. They will be concerned about their pension rights to the extent that, in the absence of any guarantees, many will consider whether they might not be able to afford to continue to live in an EU member state. The Minister can deal with that uncertainty today.