State Pensions: UK Expatriates — House of Commons, 2017-04-20
Topic: Mixed Topics
Roger James Gale (Conservative, Centre-right): 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."