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Uk Pensioners Overseas: Payments

Volume 621: debated on Monday 22 January 2001

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Whether they have taken advice on whether the freezing of the state retirement pension for pensioners resident overseas is compatible with the Human Rights Act 1998.

My Lords, the European Commission of Human Rights has said that freezing the state retirement pension for pensioners resident overseas does not breach the European Convention on Human Rights.

My Lords, I am grateful to the Minister for that Answer. However, does she not consider that matters have moved on a great deal since 1983? Does the noble Baroness accept that there is a good deal of case law of the European Commission which indicates that contributors to pension schemes may acquire rights in those schemes that are protected by Article 1 of the first protocol to the convention? Does the noble Baroness also accept that excluding some pensioners from uprating on the grounds of their country of residence seems plainly to be discrimination within Article 14 of the convention? Will she further accept that there are no grounds whatever for discriminating against those who are resident outside the United Kingdom?

My Lords, I do not agree with the noble Lord. We can only abide by the 1983 judgment as it currently stands. Of course matters have moved on, but the case law has not been tested on the issue since 1983. As regards the noble Lord's point about there being no grounds for us to freeze pensions of those pensioners living overseas, I must remind the noble Lord of our commitment to pensioners living in this country. They are our priority. The Government have taken a number of steps to improve the living conditions for pensioners in this country.

My Lords, in view of the fact that those with frozen pensions in, say, Australia or Canada feel that they are being unjustly treated when compared with those in the European Union, can the Minister say what the Government's policy is with regard to pensioners in countries applying for membership of the European Union; in other words, will they get full uprating when enlargement proceeds?

My Lords, the position with respect to the candidate countries applying to join the EU is that once they are members of the European Union they will become part of the process, which will enable their pensioners to receive uprated pensions.

My Lords, leaving aside whether or not this contradicts the convention and human rights Acts, and so on, it surely contradicts a sense of fairness. We are talking about people who have worked sufficiently in the United Kingdom to enable them to contribute to, and earn, a retirement pension. Now they have chosen to live, often with relatives, in places like Australia, Canada and New Zealand and, indeed, elsewhere in the European Union. However, some of them receive uprated pensions, while others do not. It may not be wholly the fault of, as it were, the British side, but I should have thought that we had an obligation to our fellow citizens who are approaching retirement or are already retired to open negotiations on the issue, especially with our friends in the Commonwealth where so many of these people are now residing. Should we not deal with this issue as a matter of honour?

My Lords, perhaps I may remind my noble friend that a number of those people claiming pensions overseas went abroad during their working lives and contributed for many years to the economies of those countries. I repeat: it is the Government's policy to provide real help for pensioners in the United Kingdom. We have done this through our increases in the basic pension and in the winter fuel payment, and by way of free television licences and the minimum income guarantee.

My Lords, is this not another example of the problem with the fiction that we have a funded national insurance scheme? Does the Minister agree that the state pension in this country is not paid from a funded scheme; it is paid from taxpayers' contributions? That being so, it follows logically—albeit rather sadly—that it requires people who are still paying taxes.

My Lords, I agree with the noble Lord. Our scheme is a pay-as-you-go scheme.

My Lords, can the Minister confirm that the situation in Australia has changed in that, in the past, that country used to top up pensions but no longer does so? Can the noble Baroness say whether that applies only to those who went overseas after retirement? Alternatively, do those who went overseas before retirement and, as has been said, worked abroad for many years still receive their pensions in full from the country that they chose to live in?

My Lords, we have an agreement with Australia that will expire at the end of February of this year. In order for UK pensioners in Australia to qualify for an Australian pension they have to be resident in that country for 10 years and pass a means test. If they have been resident for less than 10 years, then, under the agreement, the contributions they have made in the UK could be used and counted as a contribution towards the Australian pension. That situation will soon cease, but the position for pensioners currently receiving pensions under that agreement will remain the same. The situation will change from April this year.

My Lords, my noble friend referred to those people who during their working lives lived abroad and contributed to the economies of countries abroad. How does that sit alongside those ex-servicemen who decided to live in Canada following retirement after paying fully into the contributory scheme in this country? I refer to people who flew side by side with their Canadian comrades in the war. Will my noble friend please comment on those people who went to live with former comrades in Commonwealth countries?

My Lords, some people went to other countries during their working lives and some went as pensioners. However, we should remember that the total cost of uprating all frozen UK basic state pensions paid overseas would be £300 million a year. It is the Government's view that that is money we should use to assist pensioners in the UK to ensure that their lives are improved.

My Lords, following the previous question, does not the Minister agree that we owe some debt to British pensioners wherever they may be? The Government have recently done a great deal to help pensioners who do not have enough income to enable them to live decently in this country. The matter we are discussing is in a way a long-running sore. As the Minister said, the cost of doing something about it would run into millions rather than billions. It is a blot on our relations with many Commonwealth partners and one which somehow reflects on the treatment of British pensioners.

My Lords, I repeat that it has been the policy of successive governments to honour the reciprocal agreements we have with a variety of countries. It has been this Government's policy to focus in particular on the position of pensioners in the UK. I accept that concern is felt with regard to this matter in all parts of the House. It has been raised not only in Starred Questions but also in debates on a number of pieces of social security legislation. However, it remains this Government's policy and priority to concentrate on poor pensioners living in the UK.