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Sir Andrew Bowden (Brighton, Kemptown): We have just heard a moving speech from the right hon. Member for Manchester, Wythenshawe (Mr. Morris) and I should like to associate myself with his comments.
The House welcomes the changes in benefits to war widows announced by the Government, and endorsed and confirmed by my right hon. Friend the Secretary of State. The war widows have made enormous sacrifices. But for their menfolk and many others, the House would not be meeting here today in peace and freedom.
I say with great regret that I believe that all Governments since the end of the second world war should hang their heads in shame at the way in which we
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have treated our war widows. I say, again with great regret because he is a man I respect, that I disagree with my right hon. Friend the Secretary of State when he says that we treat our war widows well. We have not done so and we do not do so today. I hope that in this 50th anniversary year the Government will look again and give more help to war widows.I emphasise just one of the points made by the right hon. Member for Wythenshawe in relation to older war widows. The fact that they have to exist on just a one third rate is disgraceful; it should be a minimum of 50 per cent. I think that it should be 60 per cent. It would be a declining commitment from the budget and, even at present, it would be a figure of only £27 million to £30 million per year--what a tiny price to pay for those who have sacrificed so much. I welcome the Bill; I think that it is overdue. I should like to pay my compliments to the Ministers, who, with their Department officials, have clearly carried out an enormous amount of hard work. But I am deeply concerned about parts of the Bill. I must, inevitably, concentrate my comments on those parts, but I do not want not to pay tribute to the work that has been done and to many of the proposals contained in the Bill.
I believe that the Bill should include provisions dealing with British pensioners living abroad. I shall touch on that subject only briefly because my hon. Friend the Member for Davyhulme (Mr. Churchill) will be going into the subject in greater detail. I accept that it is not possible to carry out an immediate uprating for all those pensioners, but they include one group, some of whom suffer hardship because their pensions will be only £4 or £5 a week. I hope that the Government will look at the possibility of implementing a discretionary scheme to look at each case to see whether some of those people can be helped. I understand that immediate full uprating would not be possible as it would be extremely expensive, but perhaps the Government will think hard about making a commitment to future years' uprating, thus going some way towards reducing the unfairness of the position of those living in many Commonwealth countries. I refer now to some specific proposals in the Bill, particularly the balance between the number of employee and employer representatives on trustee boards. I have no doubt that the balance of one third to two thirds is not fair. The employers'
representatives must clearly be in the majority, but that could be achieved by having a 50:50 representation with a chairman appointed by the employers.
Millions of pensioners are very concerned about their representation on trustee boards. There is deep unrest about the matter and I ask the Government not to underestimate the strength of that feeling. I believe that at least one elected representative who is also a beneficiary should serve on a trustee board. There are a number of reasons for that, not least that that person would understand very clearly the position that he or she faced and would reflect that position during board meetings.
When there is a substantial majority of employer representatives on a trustee board, it is inevitable that they will often be high-ranking officials, such as the chief executive, managing director or chairman of a company. Those representatives will certainly have a great influence over the career and the future of the employee
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representatives who also sit on the board. Human nature being what it is--I am sure that all hon. Members would feel exactly the same--we could not really expect the employee representatives serving on those boards to stick out their necks too far on behalf of the employees. However, a completely independent, elected trustee who is also a beneficiary would have no personal axe to grind, other than representing the beneficiaries, would have no fears about his or her future prospects or job, and thus could speak very freely and bluntly. There is a very strong case for electing a beneficiary pensioner to sit on trustee boards.Some thought should be given to arriving at a clear definition of the purpose of pension funds. In essence, they are part of the contract of employment. People join companies that have established pension fund arrangements, often having already studied the terms and conditions of those pension funds. They may be aware of their obligations and those of their employers in financing the scheme. One could argue--I would not take it right to the line--that money paid into company pension schemes is deferred salary or wages. Therefore, one could also argue that only in the most exceptional
circumstances--I believe that there would be some cases--should that money be used for any purpose apart from safeguarding the pension scheme in the interests of current and future beneficiaries. We must think through that definition very carefully.
I ask my hon. Friend the Minister for Social Security and Disabled People to examine clause 17(1)(a). It should be scrapped completely because it would enable employers to avoid their responsibilities under clause 16. That would have a real effect upon some of the Bill's excellent aims and intentions. I cannot understand the argument--perhaps my hon. Friend will address the matter in summing up the debate--for including that paragraph in clause 17. There is a strong argument for increasing the strength and the powers of the occupational pensions regulatory authority. It should not only deal with emergencies and problems but have some powers--although perhaps not as wide as some right hon. and hon. Members would wish--to try to prevent disasters. That could be achieved by ensuring that there was proper funding, and that could be assured only through payment from the state.
My right hon. Friend the Secretary of State asked why people who are not involved in the funds should contribute, through their taxes, to the cost of state funding. However, about 20 million people either are or will be beneficiaries. If we also take their families into account, that is a substantial proportion of the total population. There is a real case in favour of state funding and for giving the occupational pensions regulatory authority much sharper teeth. The Maxwell disaster occurred partly because there is no real control over the custody of pension scheme assets. Surely there is a case for ensuring that in most circumstances--I am not saying in all cases--there could be a custodian of a scheme's assets who is independent of the employer. I suspect that a large number of employers would welcome an independent custodian as it would remove a lot of worry and concern from their shoulders.
Clause 36 also concerns me. The Bill states that regulations may require the provision of documents to scheme members. It is absolutely vital that members
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receive such documents if they are to know what is going on in the scheme. My hon. Friend the Minister should eliminate the word "may" and insert instead the word "must". People who contribute to the scheme over many years have a right to know what is happening in the scheme. They should know how the money is being used and they should receive a proper statement of accounts.I am particularly concerned that the word "must" should replace the word "may" because other parts of the Bill clearly state that the employer's representatives can agree at trustee meetings that all decisions should be decided only on a majority vote. I am not saying that many employers would abuse that provision--I believe that only a minority would. However, under the present wording of clause 36, a minority could abuse it by not providing information to members, which should legitimately be made available. I hope that my hon. Friend will examine the situation carefully in Committee. As to the balance between employer and employee representatives and the importance of trustees, there is a case for arguing that all trustees should receive some compulsory training. After all, the duties of trustees are becoming increasingly complex and demanding and trustees should benefit from the help and support that some fundamental training would provide.
My last point, which was touched on by the right hon. Member for Wythenshawe, is about a matter of deep concern to me and my fellow officers on the all-party parliamentary group on pensioners. I refer to an elderly married couple, one of whom must enter permanent residential or nursing home care. We must establish without a shadow of doubt the right to keep 50 per cent. of a spouse's occupational pension when such a situation arises. If that is not done, in many cases the spouse left behind will be unable to support himself or herself in the property where the couple live. They may have alternatives. They may have a right to income support, but that is robbing Peter to pay Paul. They may have to sell their property and move to an entirely different area. Such problems should not confront elderly people in our country today.
Mr. Mark Wolfson (Sevenoaks): If a person was eligible for income support, that would be psychologically the wrong way to do it. Sometimes, we do not pay enough attention to the need of people to feel that they can support themselves, rather than have to call on statutory money.
Sir Andrew Bowden: I fully endorse my hon. Friend's point. I hope that I shall not stretch your tolerance too far, Mr. Deputy Speaker, in reminding the House that 750,000 pensioners who could claim income support do not, because they look on it as charity or are not prepared to ask for that money.
A 50 per cent. guarantee would ease the worries of a large number of people. I remind my hon. Friend the Minister that as more and more people each year retire with--thanks largely to this Government--a good pension, such a provision would assist a growing number of people.
Mr. Frank Field (Birkenhead): Did not the Secretary of State's remarks about dividing capital at the point of divorce add force to the hon. Gentleman's argument?
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Otherwise, elderly couples may have to divorce in the last years of their lives, so that the spouse remaining at home can keep part of the pension.Sir Andrew Bowden: The hon. Gentleman pinpoints a problem that has confronted Governments for some years--creating situations that damage the family. Because of the way in which some laws have operated over the past 20 or 30 years, in some circumstances people are better off divorced or living together unmarried than being married. The hon. Gentleman is absolutely right.
My right hon. Friend the Secretary of State touched on the discretionary powers of local authorities to help in cases where a spouse is taken into permanent care. I do not share his confidence that local authorities will be as fair and balanced as they should. There is already evidence of discretionary powers being used in widely different ways, varying from authority to authority. When local authorities had powers in relation to transport schemes, sometimes people living on one side of a road enjoyed totally free public transport whereas those living on the other side did not. People felt a great sense of unfairness. If we rely on local authorities in this instance, the same will happen.
The Bill has a remarkable number of things going for it, and Ministers deserve to be warmly congratulated. However, deep concern is widespread among the 20 million people who are or will be recipients of pension scheme benefits--and there will be more and more of them in future. I say to my right hon. and hon. Friends in all sincerity that they must not ignore those concerns but meet them. If they fail to do so, it will be at their peril.
5.54 pm
Mr. Archy Kirkwood (Roxburgh and Berwickshire): I commend the speech by the hon. Member for Brighton, Kemptown (Sir A. Bowden), who has for many years been a champion of pensioners as co-chairman of the all-party pensions group. I pay tribute to his work. He made a compassionate and powerful speech, with much of which I agreed. I hope that members of the Treasury Bench will study with care the hon. Gentleman's speech in Hansard tomorrow. The hon. Gentleman is also a distinguished colleague on the Committee of Selection, so I shall be twisting his arm to serve on the Committee as a result of his erudite contribution to the debate. He certainly staked a powerful claim.
I agree wholeheartedly with the hon. Gentleman's final, powerful point about the Government's argument that local authorities have discretion not to use all of a pension for the upkeep of a partner in residential care. All the evidence from Age Concern and the Alzheimer's Disease Society is that that is not happening. The hon. Member for Birkenhead (Mr. Field), in an intervention, mentioned that spouses would almost be obliged to consider divorce to protect 50 per cent. of their pension.
Age Concern estimates that only 10,000 men and 5,000 women are in that situation, so it would not cost a tremendous amount of money to remedy. We will return to that matter in Committee. I hope that the Government Front- Bench team will carefully study the information about the costs, justification and consequences of allowing such a situation to survive consideration of the Bill.
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The hon. Member for Stratford-on-Avon (Mr. Howarth) pointed out that huge macro-economic consequences must be kept in mind, in terms of the money under the control of pension funds and the effect of their use on the country's economic future and prosperity. Although the hon. Member for Glasgow, Garscadden (Mr. Dewar) did not have time to deal with that point in detail, I hope that such wider questions will be considered in Committee.The Bill's long title states that its purpose is
"to amend the law about pensions and for connected purposes." That offers extensive prospects of amendment and discussion. When the Standing Committee is set the task of examining the Bill in detail, I hope that it will take full advantage of that latitude to scrutinise and cross-examine the totality of Government pensions policy. Although I welcome the Bill as far as it goes, it does not add up to a coherent pensions policy.
I listened to the good speech made by the right hon. Member for Sutton Coldfield (Sir N. Fowler). I will argue for that right hon. Gentleman also to have a place on the Committee, because there was a strong sense of de ja vu of the debates that he and I endured at the hands of the hon. Member for Oldham, West (Mr. Meacher). I could not resist chuckling when the right hon. Gentleman compared Labour's current and much better Front-Bench team with its predecessors in the 1985 and 1986 debates.
The right hon. Member for Sutton Coldfield made a timeous escape in 1987, just before the personal pensions bribes scandal started to take hold--but he is a master of timing, and timing is important in politics. He made a powerful point, to the effect that we need to target help via the state retirement pension at those who need it most. My party is beginning to look responsibly into such a change. The lowest 10 per cent. in terms of income- -the 1 million or so people who rely exclusively on the state pension-- definitely receive inadequate help. Evidence for that is to be found in the fact that they usually require immediate means-tested support to meet their assessed needs, as defined under current DSS rules. Much more needs to be done, therefore, but I accept the principles behind the right hon. Gentleman's point.
This debate finds me in a bit of dilemma as regards the Labour party's reasoned amendment. The hon. Member for Garscadden made a good speech. Although I share his anxiety that the Bill does not go far enough, I would add that we desperately need to reach a consensus on pensions policy. This Bill may come into effect in 1997; but by some happenstance there may be another Government by then. Putting aside all our usual political divisions we should remember that the last thing that the industry, pensioners or trustees--those who try to look after pensioners--want is another upheaval in policy. Hence we must make the best of the Bill that we have. I am prepared to do that, but it will require some work and some concessions on the part of the Government to guarantee the sort of cross-party agreement that could be reached with good faith on all sides. It is certainly well worth trying to achieve it.
The Government really had no option but to introduce the Bill. It has its provenance in a combination of the Maxwell scandal and the Barber judgment in the European Court. I may be a lone voice when I say--this is not an argument that I intend to pursue, and in any case
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the time to pursue it has probably passed-- that I do not believe that trust law is the best framework for occupational and personal pensions policy. I was attracted by some of the arguments made by the Select Committee in 1991-92. The Committee decided that it would be better to start with a clean sheet and to put pensions policy immediately on a statutory footing.In a previous incarnation I was a humble Scots solicitor; speaking as one, I do not think that it will be easy to reconcile the terms of the regulations--we have not yet seen them--with differing English and Scots trust law. Trust law was never designed to deal with £600 billion worth of assets, and it may not be easy comfortably to interpret trust law north and south of the border under the statutory framework for which this Bill legislates. Beginning with a clean sheet and aiming at purely statutory provision might have taken longer, but it would have been worth attempting.
I regularly complain about the extensive use of enabling legislation in such key areas of law. The Government should have taken a little longer to draft their Bill. It is not particularly well drafted, judging by the amendments that the Government had to table in the House of Lords. This is largely a piece of enabling legislation, and the devil might easily arrive in the detail--as happened with the Child Support Agency legislation. I freely confess that I did not spot some of the mistakes in that, in my capacity as spokesman at the time. Subsequent problems exploded in an unanticipated way. It is therefore with some misgivings that we contemplate the arrival of another piece of enabling legislation. I agree with the hon. Member for Garscadden about the Government's retreat from the Goode report. Thanks have been proffered to its chairman and his committee team, but I add my congratulations to the Chairman of the Select Committee, whose reports have brought to this subject an illumination that I for one would not otherwise have found. I am sure that the same applies to other hon. Members. There is evidence to show that the Government have significantly diluted and distorted Goode's proposals--no doubt because the Government were subjected to extensive lobbying by interest groups. That is politics, I guess, but I regret it. The Standing Committee should carefully scrutinise this Bill and try to strike the right balance. Liberal Democrats are very good at striking balances.
I am especially concerned to find that the regulatory authority will be neither regulatory nor an authority, a view shared by Help the Aged. Sue Ward, a distinguished member of the Goode committee said, no doubt referring to Maxwell:
"Given the costs of a major investigation, and of court proceedings to put right what has gone wrong, this seems a very distorted set of priorities".
I agree. I am not sure that I share the Government's optimism about the protection afforded by the Bill.
I expect, as did the hon. Member for Garscadden--he is not one to miss a trick when it comes to the odd £4 billion here or there--that some of the changes being made to the schemes for contracting out of SERPS, in the course of this reform, will have to be very carefully looked at. Moreover, we shall have to take a close look at pensioners' possible future losses owing to the requirement to index-link pensions, under SERPS, by up to 5 per cent. If inflation increases--it has happened in the past--pensioners could lose out heavily.
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In 1985-86 I was a lone voice in arguing that personal pensions have a part to play, so I am not in the same position as the Labour party in that regard. I am, however, worried about some of these age-related rebates, which might cost up to £300 million a year. Certainly, we must try to improve the choice and availability of personal pension schemes, but we should not allow that to prejudice occupational schemes. To do so would be a grave mistake.Rightly, the Bill includes a proposal to deal with the state pension age. I have some real concerns about the effects on women, however. A recent report by the Equal Opportunities Commission stated that the equalisation of retirement ages will make it much more difficult for retired women to be financially secure, because women's lifetime earnings would be averaged over an additional five years. EOC researchers say that women will end up with lower state pensions in real terms unless they can secure well-paid work between the ages of 60 and 65. But only a fifth of women of that age are in paid work.
My party has looked into the homogenisation of retirement ages and we have come to the conclusion that a pivotal retirement age of 65 would make it possible for the state pension to be significantly more generous. But the qualification is that some of the savings are routed back, as the hon. Member for Garscadden said, in some way, so that the present entitlements can be improved.
Mr. Dafydd Wigley (Caernarfon): I have been following what the hon. Gentleman has said with considerable interest; he referred to the retirement age. Does he accept that there is one group for whom there is considerable difficulty: the agricultural fraternity, the members of which very often do not have any personal plans of their own or an occupational pension? Often, because of their circumstances in earlier life, they do not have the full benefits of a state pension, either. As a result, they work beyond normal retirement age, which leads to an industry with an age structure that is detrimental to its future. Given the broad long title of the Bill, might there be a possibility in Committee to examine that to see what can be done to help them?
Mr. Kirkwood: The hon. Gentleman is another volunteer for the Standing Committee. I am picking them up rather well. The Committee of Selection will be a lot easier than it usually is. The hon. Gentleman raises an important point. Coming from an agricultural constituency myself, I am sure that that matter is something to which the Committee will want to give its consideration.
As a party, the Liberal Democrats have looked at the possibility of redeploying some of the savings that would be made by using 65 as a pivotal age, to enhance the pension that would come into play at 75 and 80, so that as people become older and lose the ability to go into part-time work or deal with their own personal circumstances they could pick up some extra support. The hon. Member for Garscadden made the point well and I am sure that it has been taken by hon. Members on both sides of the House.
On pension splitting, will the Minister look carefully at the differences in the law on pension rights north and south of the border because, in the matrimonial context,
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Scots courts are entitled to regard pensions as part of the matrimonial property to be split? There are difficulties about that. Mr. Lilley indicated dissent .Mr. Kirkwood: The Secretary of State shakes his head. I am quoting the Lord of Ardbrecknish--
Mr. Kirkwood: He was chairman of the Liberal committee so long ago that I had forgotten his name.
Mr. Lilley: I was shaking my head at the use of the word "split". In Scottish law, there is not the power to split the assets. There is an explicit duty to take into account the value of pensions north of the border, and a long-standing implicit duty south of the border. We made it explicit south of the border in the Bill and gave the enabling right, but splitting is a different matter.
Mr. Kirkwood: I withdraw. The Secretary of State is quite right. The use of the word "split" is wrong. There are still significant differences, which I urge the Minister to look at carefully. We shall return to it in the Standing Committee, but there are lessons to be learnt--as there always are--from the Scots legal system, when looking at amending laws in the rest of the United Kingdom.
My final point is about British pensioners living abroad. We as a party have looked at that carefully. We have listened to all the arguments. I think that the time has come. I know that £200 million is involved, and I do not think that that is a mere bagatelle. It is a lot of money, but I think that it is a duty that we should shape up to. If we are not to go straight for indexation, we should look at reciprocal arrangements with the countries to which such arrangements do not apply. The Liberal Democrats have decided to make that a commitment that we would seek to introduce if we have the opportunity. The Government would be well advised to look carefully again at the arguments.
The Bill, I am sure, can be improved in Committee, but it will be improved in Committee only if the Government act in good faith. It is my concluding plea that if the Government really are attached to the idea of establishing consensus in the framework of pensions policy that will survive a change of Government, it is incumbent on them to listen carefully to the suggestions that will be made--responsibly, as far as I am concerned--for effective changes that can and would improve the content of the Bill.
6.13 pm
Mr. Winston Churchill (Davyhulme): It is a pleasure to follow the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). I am grateful to him for the support that he expresses for the campaign that I and others have waged in the House to secure justice for expatriate pensioners.
There is much that is good in the Bill, both in the way in which it strengthens the regulatory framework for occupational pensions, in the wake of the Maxwell scandal--clearly, that was something that was long overdue-- and in the way in which it takes steps to equalise the retirement ages of men and women. I warmly welcome the Government's acceptance of Lord Freyberg's amendment in another place, which will be of
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great assistance to the nation's war widows. As sponsor of early-day motion 279, which calls for an end to discrimination against British state pensioners living abroad, I should like to devote my remarks to their plight.My early-day motion, which, in the past Session, secured the support of no fewer than 288 colleagues on both sides of the House, has been signed thus far by some 248 in the current Session. It expresses the House's
"grave concern at the discrimination . . . against British State pensioners"
depending on the hazard of where they choose to make their place of retirement.
I and my colleagues, from both sides of the House, who support this measure are not seeking handouts for people who have not paid their proper contributions, although one sees day by day the Department of Social Security standing ever ready to give a vast number of people who have never contributed a penny to the national insurance scheme lavish handouts, including foreign citizens who enter our country illegally, because there are no effective measures in place to establish the true identity or nationality of those who claim benefits.
In a recent case, which was so notorious that it attracted the headlines, some 15 citizens of Nigeria arrived here and chartered a stretch limousine and two apartments in an up-market area of Knightsbridge, in order systematically to defraud the social security system by taking on the identities of more than 2,000 individuals. Thanks to the assiduity of my right hon. Friend the Secretary of State, they were eventually uncovered, but one wonders how many such scams are in operation. The sooner that we have effective steps in place to stop the monstrous fraud that is being perpetrated on the social security fund, the better.
I was particularly intrigued by a statement that was made by my right hon. Friend the Secretary of State for Employment, on 8 February 1993, when speaking in the public expenditure review. He stated:
"We must adhere to our important manifesto commitments to pensioners. People make provision years in advance for their retirement. I do not wish to be deprived of any contribution that I have made to my pension--so these are important issues."
I think that we would all endorse that sentiment. But the fact is that the very same Secretary of State is a member of a Government who are effectively depriving some 381,000 British overseas pensioners of the pension to which they have contributed throughout a lifetime's work. I and my colleagues are seeking justice and equal treatment for those who have paid those national insurance contributions throughout their working lives. Because of where they have chosen to spend their retirement, 3 per cent. of British pensioners are deprived of their full pension. Of 676,000 British retirement pensioners living abroad, more than half--about 381,000--have their pensions frozen.
The selection of countries where British pensioners have their pensions frozen is, to say the least, bizarre--indeed, insane would not be too strong a word. Those who choose to retire to one of the old dominions-- which played such a key role in the very victory which, a fortnight today, the Government will be rightly spending significant sums to celebrate--have their pensions frozen.
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However, those who retire to the land of our former enemies--Germany or Italy--naturally get their pension payments and all upratings paid in full.I invite Ministers to ponder that point as we approach the 50th anniversary of VE day. Where is the justice? Why is the full pension payable to someone who retires to Detroit, but not to someone who lives just across the water in Ontario, Canada? Why should those who retire to Jamaica or Barbados receive a full pension, but not those who retire to Trinidad or Tobago? Why should those who retire to Iceland receive the full pension, but not those who retire to India or Pakistan? Why are pensions frozen for the 14 remaining British pensioners in the Falkland Islands, when billions of pounds of taxpayers' money were spent reclaiming those islands from Argentina? Where is the justice; where is the logic? I should be grateful if my hon. Friend the Minister, when replying to the debate, would, for once, deal with the question of justice. Where is the justice in these arrangements? I am bound to say that successive Ministers have ducked that question because they have never dared defend such discriminatory, unfair arrangements on the ground of justice. It is about time that they did so and I look forward to hearing what my hon. Friend the Minister has to say.
I recently received representations from the Canadian high commissioner in London. He pointed out that the average pension of the 118,000 British pensioners in Canada is currently £20.36 per week--barely one third of its full value. As he poignantly said--and I have passed his remarks on to my right hon. Friend the Prime Minister:
"The unfairness of the issue is very striking in Canada where for instance a British pensioner in Windsor, Ontario does not receive an indexed pension, but just across the river in Detroit a fellow British pensioner does."
I want to quote one or two excerpts from some of the many thousands of letters I have received, in particular from pensioners living in the old dominions. One letter from Fort Saskatchewan, Alberta, Canada states:
"Living in Canada, as I do, and having left the UK in 1968, my pension is frozen at the princely sum of £4.50 per week. If I had moved to the country of one of our former enemies, such as Germany, I would receive the full current pension . . . twelve and a half times as much . . . I urge your Prime Minister, the Right Hon. John Major to press for this reform and not to let Britons abroad suffer any longer."
Of course, the most poignant cases come from South Africa, where there is no effective net of social security, unlike in the other old dominions. Edna Thompson wrote to me from Victoria embankment, Durban, saying:
"I am an 86 year old widow living alone along with many of my peers, I am almost destitute. Please try to get the British Government to do what is right by us regarding equality of pensions for us overseas oldies--we would come back to the UK to claim a living but haven't the fare. My pension is £24.30 every 28 days, that is . . . R100. I dread the winter as I cannot afford to use any heat. Please help us."
How is it possible that this Government, who in so many ways are caring and compassionate towards so many in our society, can turn their back on those who have served our country so well? They are the very hero generation whose victory we shall be celebrating in a fortnight's time, yet the Government are turning their back on them. Another letter from Noordhoek, South Africa, states:
"My wife and I have lived here since 1951. I am now 85 and she 77. We receive £6.75 for Self and £4.15 a week frozen."
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Intriguingly, in a recent Adjournment debate that I initiated, my hon. Friend the Under-Secretary said that"retirement pension upratings are not generally payable abroad. That has been the position since 1955 . . . It is fair to point out that, since 1955, people affected would have known, or could have found out, that that would be the position".--[ Official Report , 6 July 1994; Vol. 246, c. 431.]
However, I have received comments on that statement from Mr. James Rogers in Victoria, British Columbia. He writes that he received a communication from the Ministry of Pensions and National Insurance dated 6 December 1956- -a whole year after the year to which the Under-Secretary referred--stating clearly:
"Your title to British National Insurance benefits, providing, of course, that contributions are maintained, will not be affected in the event of your becoming a citizen of Canada, or the United States of America."
That has been proved to be a direct lie. I call on my right hon. Friend the Secretary of State and the Government to honour the promises that were made.
During the late 1940s, after the war, and the 1950s, many thousands of people consulted Government agencies about the effect on their pensions if they lived abroad, and time and again they were told, "Provided you maintain your contributions to the age of 65"--or 60 for women--"you will get your pension." There was no mention of a devalued or frozen pension.
Great play has rightly been made about how monstrous it is that occupational pensioners should have been defrauded in the Maxwell scandal. However, I regard it to be a monstrous fraud that many thousands of British ex-service personnel and others have gone abroad, having been misled by the then Ministry of Pensions and National Insurance into believing that by making extra payments they would receive their full pension entitlement. It cannot be right to treat those who have served this country so well in our hour of need in such a shabby and unfair way. I know that the standard reply, which I am sure will be trotted out this evening, is that the cost is exorbitant. Amazingly, the cost seems to have come down by almost a third as a result of a rejigging of the figures in the Secretary of State's Department. I am glad that they are coming down the right way. According to the latest reply that I have received, they have come down from more than £350 million to some £235 million. Madam Deputy Speaker, to you and I, £235 million might seem a large sum of money, but it is no more than one third of 1 per cent. of the social security budget. In this 50th anniversary year of VE day, I call on my right hon. Friend the Secretary of State and, above all, on my right hon. Friend the Prime Minister, to do the right thing by this hero generation, who should not be deprived and required to live in circumstances of great destitution and misery.
I look forward, therefore, to hearing that the Government will at least come to an arrangement. If they cannot pay the full amount, how about going for a scheme whereby people aged over 75 would at least have their pension restored to what it should be? According to the Minister for Social Security and Disabled People in his written reply to me on 12 July last year, the cost of that would be £138 million--little more than half the figure that I quoted. That would give enormous help to people who need it most. People who have been retired for 10, 15, 20 or even 25 years are suffering most. It is my earnest hope that my plea will not fall on deaf ears.
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6.31 pmMr. Frank Field (Birkenhead): I am pleased to follow the hon. Member for Davyhulme (Mr. Churchill). Earlier, we were reminded that the Bill has an omnibus long title, which offers hon. Members an enormous opportunity to table amendments on Report. About 240 hon. Members have already signed his early-day motion--
Mr. Churchill: It has been signed by 248 Members.
Mr. Field: With 248 Members signing the motion, if a suitable amendment is tabled and supported we hope that the Chair will select it. We will then find out whether hon. Members vote as they sign early-day motions; one hopes that they will.
In opening today's proceedings, the Secretary of State for Social Security rightly reminded us that the Bill results directly from Robert Maxwell's theft of what were euphemistically called, here and elsewhere, the Maxwell pension funds. Merely to call them that raises in an acute form the point made by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) in relation to whether trust law is a suitable framework to safeguard pensions. As he and I say, that, sadly, is water under the bridge; we must deal with the Bill as it is.
In reminding us of the Bill's genesis, the Secretary of State was in order formally to give his thanks for the work of Sir John Cuckney in securing funds to safeguard what are still called the Maxwell pension funds. I shall go further: I want to compliment him on his stand. The position was difficult for the Maxwell pensioners, given the uncertainty that they faced, but Sir John was 100 per cent. right to resist calls made not only in the Chamber but outside that taxpayers should cough up the money immediately. The result of the way in which he has played his hand is that companies have returned funds on which, presumably, they thought other people had claims. Taxpayers are not being asked to make a substantial contribution to pension funds and all pensions will be paid, but the mechanism by which that success was achieved was Sir John Cuckney. I hope that, at some suitable stage, the Government will not only thank him in the House but reward him suitably for the skills that he has deployed on behalf of pensioners.
The Secretary of State rightly reminded us that half a dozen measures will be put in place to protect funds in a way that the Maxwell pension funds were not protected. He did not say, although I am sure that it was in his script, that, no matter what we do, we cannot give a cast-iron guarantee on the safety of pension funds, or of any other funds, come to that. It is proper, therefore, for us to consider whether the six measures should be strengthened, and proceedings in Committee and on Report will give an opportunity to make suitable amendments.
The Secretary of State said that he would introduce the Goode committee report. The right hon. Gentleman and I spoke at a conference that was organised by Sir Roy Goode, who said that he was disappointed that the regulator was not more carefully defined on the face of the Bill rather than in regulations. He also envisaged that the regulator's role would be more proactive than the one proposed in the Bill.
The Secretary of State may reassure us that we are wrong on that, but it is wrong for him to put up straw figures and to say that somehow the Government propose to have a regulator who is really a glorified filing clerk
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receiving all pension fund accounts. We want a proactive agency whose staff are streetwise, who know where problems occur or are likely to occur and who will act to prevent fraudulent actions from taking place, rather than, as my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said, manning an ambulance afterwards. We shall return to that issue.An issue to which we will not return after the Bill has been passed is the equalisation of pension ages. When the measure hits the statute book, I shall be surprised if anyone campaigns in the election to change that commitment. Although it is right for groups to represent their concerns about the issue, it is of much greater import to consider the use of the funds that will be saved for the national insurance fund when the pension age is equalised at 65. I wish to emphasise my belief that 65 will not be the end of the story. In saying that, I wish to remind hon. Members of the beginnings of pension schemes. When the first pension scheme was introduced in 1908, the average of life expectancy was 45, and pensions were not drawn until 70. It seems extraordinary that we think in set terms of when pension ages should be set, and that it is not a moveable feast as the population becomes more healthy and lives longer.
The Old Age Pensions Act 1908 was enacted because of pressure from the friendly societies, which found that their pension requirements were a substitute for sick pay and that people had to withdraw from the labour market because they could no longer work. I hope therefore that, before the general election, we will have clear plans about the benefits structure before what is called retirement age, because the more we get that structure right, the less pressure will exist to seize on retirement pension as a form of income.
At the end of my speech I shall talk not about the flexibility that will result from our making all sorts of funny definitions about when we think people should retire but about the real flexibility that will come from people owning capital on the basis of which they can decide when to retire.
In debating the raising of the pension age to 65 in all cases, I hope that we shall give some thought to how the substantial sums of money that will be saved should be spent. I know that the Government have taken their decision in the context of trying to contain the social security budget. Indeed, for 15 years the Government have been saying that they will cut that budget but even the current Secretary of State finds it difficult to slow the pace of its increase, let alone cut it. The Secretary of State raised various important issues around this theme.
The hon. Member for Brighton, Kemptown (Sir A. Bowden) talked about people moving into residential care. He allowed me to intervene to say that, if we do not make some changes to allow people to keep part of their occupational pension schemes when their partner moves into residential care, we shall be creating the farcical situation in which people will be divorcing their elderly spouse so that they can keep part of their pension when the spouse moves into residential care.
Under the social security system, we must not have the forms of provision pitted against human nature. The Government rightly tell people about the importance of saving but woe betide anyone who becomes frail and ill
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