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Porter, David (Waveney)Portillo, Rt Hon Michael
Powell, William (Corby)
Rathbone, Tim
Redwood, Rt Hon John
Renton, Rt Hon Tim
Richards, Rod
Rifkind, Rt Hon Malcolm
Robathan, Andrew
Roberts, Rt Hon Sir Wyn
Robertson, Raymond (Ab'd'n S)
Robinson, Mark (Somerton)
Rowe, Andrew (Mid Kent)
Ryder, Rt Hon Richard
Sackville, Tom
Shaw, Sir Giles (Pudsey)
Shepherd, Colin (Hereford)
Spencer, Sir Derek
Spicer, Michael (S Worcs)
Spink, Dr Robert
Spring, Richard
Sproat, Iain
Squire, Robin (Hornchurch)
Stephen, Michael
Streeter, Gary
Sumberg, David
Sweeney, Walter
Sykes, John
Taylor, Ian (Esher)
Taylor, Sir Teddy (Southend, E)
Thomason, Roy
Thompson, Patrick (Norwich N)
Thurnham, Peter
Townsend, Cyril D (Bexl'yh'th)
Trend, Michael
Twinn, Dr Ian
Viggers, Peter
Waller, Gary
Wardle, Charles (Bexhill)
Waterson, Nigel
Watts, John
Wells, Bowen
Wheeler, Rt Hon Sir John
Whittingdale, John
Widdecombe, Ann
Wilkinson, John
Willetts, David
Wilshire, David
Winterton, Nicholas (Macc'f'ld)
Wolfson, Mark
Tellers for the Noes: Mr. Sydney Chapman and Mr. Timothy Wood.
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Question accordingly negatived.New clause 7
Consultation on pensions uprating
(residence outside Great Britain)
`(1) The Secretary of State shall consult with representatives of other countries where persons are resident who are entitled to retirement pensions under Part II or Part III of the Social Security Contributions and Benefits Act 1992 but whose pensions have not been uprated as they would have been had they been resident in Great Britain ("affected pensioners").
(2) Consultation under subsection (1) shall be for the purpose of ascertaining what problems are encountered by affected pensioners, and by what means such problems may be ameliorated.
(3) The Secretary of State shall lay before both Houses of Parliament a report on the outcome of his consultations within one year of the passing of this Act.'.-- [Mr. Alfred Morris.]
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Brought up, and read the First time.Mr. Alfred Morris: I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker (Mr. Michael Morris): With this, it will be convenient to discuss the following: New clause 9-- Entitlement to pension uprating (residence outside Great Britain) --
`--(1) The Social Security Contributions and Benefits Act 1992 shall be amended as follows.
(2) In section 119 (Persons outside Great Britain), at the beginning there shall be inserted "Subject to section 119A". (3) After section 119, there shall be inserted--
"Entitlement to pension uprating
(residence outside Great Britain)
119A. Notwithstanding the provisions of any other enactment, no person who is entitled to a retirement pension under Part II or III of this Act shall be disqualified by reason of residence outside Great Britain from any benefit under this Act, or any uprating of any such benefit, if he would have been entitled to such benefit or such uprating if he had instead been resident in Great Britain.".'. New clause 10-- Entitlement to pension uprating (residence outside Great Britain) (phased introduction) (No. 2) --
`.--(1) The Social Security Contributions and Benefits Act 1992 shall be amended as follows.
(2) In section 119 (Persons outside Great Britain), at the beginning there shall be inserted "Subject to section 119A". (3) After section 119, there shall be inserted--
"Entitlement to pension uprating (residence outside Great Britain) (phased introduction)
119A--(1) This section applies to any person who is entitled to a retirement pension under Part II or III of this Act and who is disqualified by reason of residence outside Great Britain from a retirement pension under this Act, or any uprating of any such pension (an `affected pensioner').
(2) There shall be paid to any affected pensioner any uprating of a retirement pension which is payable to any other pensioner under this Act at any date after the passing of the Pensions Act 1995. (3) The Secretary of State shall by regulations made by statutory instrument make provision for a scheme which shall ensure that, within the period of five years after the passing of the Pensions Act 1995, no affected pensioner shall receive a retirement pension of any lesser amount than he would have received if he had been resident in Great Britain throughout the period from which he first became eligible for a retirement pension.
(4) So far as practicable, a scheme under subsection (3) above shall ensure that an affected pensioner's retirement pension is increased by an equal amount in each year of the five year period referred to in that subsection.".'.
New clause 17-- Pension uprating (Australia and Canada) -- `--(1) So far as it applies to retirement pensions, Regulation 5 of the Social Security Benefits (Persons Abroad) Regulations 1975 (or any regulation replacing that regulation) shall cease to apply to persons resident in Canada or Australia.
(2) This section shall come into force two years after the passing of this Act.'.
Mr. Morris: Whatever differences of view there may be about this group of new clauses, we must surely all agree that it does nothing for the reputation of this country that state pensions paid to our compatriots who today live in Australia, Canada and other Commonwealth countries are so low that they put those who receive them below the poverty line in the countries where they have gone to live.
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The problem of frozen British pensions is a long-standing issue that ought now urgently to be settled and it is in the interests of all the countries involved--including the United Kingdom--to reach a solution very soon.The preferred solution of those of us who have taken part in drafting and proposing the amendments to the Bill--not least the hon. Member for Davyhulme (Mr. Churchill)--is for the UK to bring all pensions that it currently pays up to the level that would have been reached if those pensions had been indexed year on year, in line with past annual increases granted to British pensioners in the UK. That solution--sometimes referred to as full unfreezing and which certainly has my support--would be the most equitable possible. It would ensure that British pensioners in Australia, Canada and elsewhere receive the level of benefits to which they or their spouses contributed during their working years in the United Kingdom. What could be fairer?
I realise that the cost of full unfreezing, estimated at £168 million in the first year for British pensioners in Australia and Canada alone, would be substantial. However, the Australian and Canadian Governments are wholly prepared to consider other options, the costs of which to the UK would be significantly less. With good will and co-operation, an option can be found that is acceptable to pensioners living abroad and patently affordable by the UK. One such option receiving serious consideration by the Australian and Canadian Governments is to forgo any cost of living increases granted prior to the entry into force of any unfreezing arrangement, but to pay all increases granted after such an arrangement comes into force. That approach, sometimes referred to as partial unfreezing, was the basis for the UK's unfreezing arrangement with the United States of America and other countries. Its first-year cost would be £26 million for British pensioners in Australia and Canada. There may be other options. The identification and analysis of viable options for unfreezing are complex tasks that will require co-operation between UK social security officials and their counterparts in the other Commonwealth countries. They could be sought within the framework of bilateral social security arrangements already in place.
The core of what the Australian and Canadian Governments are proposing to end the current impasse is that the UK should agree to hold meaningful bilateral talks, at the official level, with each of the countries in which frozen pensions are paid to identify and analyse options for unfreezing, with the overall goal of finding an option that is acceptable to all the countries concerned. I believe there should be an agreed time frame for these talks, long enough to allow officials to do the work required of them and to seek guidance from Ministers, but not so long as to delay a reasonably early conclusion.
I repeat, and with emphasis, that the preferred solution is full unfreezing, or one as near as possible to that aim. At the very least, we should agree in this debate to what new clause 7 proposes. That would demonstrate a commitment by the British Government, equal to that of other Governments, to finding a solution to the unfreezing problem. It would position any possible solution within the framework of the existing bilateral social security arrangements between the UK and other countries. It
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would provide an opportunity for Australian Ministers to show the British Government that, among other wrong assumptions, indexation would not be"swallowed up by the Treasuries"
because 92 per cent. of pensioners from Britain have been in Australia for over 10 years and deduction of UK pension from the rate of Australian pension ceases after 10 years. The new clause would also avert a total breakdown in intergovernmental talks while there is still time to find a mutually acceptable solution to a problem that stains this country's reputation and that will not go away if we fail to reach agreement tonight. Time is short if we are to resolve an issue that in the view of many of us is one that involves principle and honour. I implore the Minister not to miss the opportunity that the new clauses present to reach a just settlement. 11.45 pm
Mr. Winston Churchill (Davyhulme): The hour is late and I shall be brief.
As we stand between the 50th anniversaries of VE and VJ days, the nation's thoughts are inevitably with the heroic generation who saved the world from Hitler. There would be no more fitting moment to rectify a clear injustice that affects 375,000 British expatriate pensioners who, unlike those who retired to an EU country or the United States, find that they receive no uprating to the pension to which they have contributed. These frozen pensioners live overwhelmingly in the old dominions of Canada, Australia, South Africa and New Zealand. Many are facing severe hardship, especially those in South Africa where there is no social security net. Time permits me to cite but one example of a wartime Royal Navy commander, who two years ago wrote to me from Nordhoek in South Africa. I shall quote only a paragraph of his letter. It reads: "My wife and I have lived here since 1951. I am now 85 and she is 77. We receive £6.75 for self and £4.15 per week, frozen. In 1951, having received Admiralty permission to emigrate, I wrote to ask if I would get the pension. You will see the reply."
The reply from the Ministry of Pensions and National Insurance dated 12 July 1963 I quote in part:
"The Class Three contributions which you are paying maintain the title to retirement pension, death grant, widow's benefit and maternity benefit, all of which are payable abroad subject to territorial currency restrictions."
Those were the only restrictions suggested.
That gallant gentleman has indisputably been misled by a Government Department. In consequence, he finds himself deprived of more than £50 a week of the pension to which he contributed throughout his working life. The Government have never sought to dispute the injustice that is caused to expatriate British pensioners, but plead that the cost of £235 million cannot be afforded.
We are talking of pensioners who contributed throughout their working lives to their national insurance pension. They find it hard to understand how a Government who have found it possible to increase social security expenditure in real terms since 1979 by a staggering £39,800 million, providing billions of pounds of benefit to unmarried teenage mothers and others who have never contributed a penny to the national insurance scheme, cannot afford £235 million, barely one quarter of 1 per cent. of the social security budget, to rectify a fundamental injustice.
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Both new clauses 9 and 10 would end the discrimination that I have outlined and remove any geographical limitation on the payment of the annual uprating to state retirement pensioners. New clause 9 would do so outright; new clause 10 would phase in the uprating over five years. I intend to press new clause 10, bearing in mind that it would reduce the first-year cost to £62 million. It would not increase the cost to the full £235 million until the next millennium.I am most grateful to my 250 colleagues from all parties who have signed my early-day motion 279 in support of the campaign. I look forward to them registering their support in the Lobby. I hope that my right hon. and hon. Friends will signify their acceptance of a reasonable proposal.
Mr. Kirkwood: I concur entirely with the sentiments expressed by hon. Members on this group of new clauses and I shall refrain from rehearsing the long-established arguments about the social justice and equity of the case. I want to put a proposition to the Government that is drawn from the speech of the right hon. Member for Manchester, Wythenshawe (Mr. Morris).
In recent conversations with representatives of the Canadian and Australian Governments, I was struck by the extent to which they are exasperated by the Government's refusal even to discuss the issues surrounding the problem. They believe that if officials were given a bona fide mandate to get round the table and discuss the principles involved, ways could be found, in the best diplomatic fashion, to accommodate the differences.
As the right hon. Member for Wythenshawe rightly said, those representatives are looking for a full unfreezing, but they are prepared to settle for less and to try to establish a bona fide compromise, which they believe is achievable. It is causing great concern to them and to me. It should also concern the House because those two countries are faithful allies and stout friends of the United Kingdom in all other international forums and discussions and if they perceive the issue as an outstanding irritant, we should give it careful attention.
If the Minister is looking for evidence, I am advised that, when the Canadian Prime Minister was in London to participate in the recent victory celebrations, he took the opportunity, in a short interview with the Prime Minister, to raise the issue. If the Prime Minister of Canada considers it important and if it is the only outstanding matter between Britain and Canada, the House of Commons is bound to pay attention to that fact alone, leaving aside the merits of the case.
I have put my name to a new clause on the amendment paper this evening. If the Minister is prepared to tell the House in good faith that discussions will be entered into and that officials will be instructed to talk through this subject with the Australian and Canadian Governments to deal with the principle, I will accept that. However, it will not be enough for the Government to produce the same old tired and inadequate justifications about money.
Full unfreezing would cost a significant amount. I am not arguing for that, but if the Government stick to the brief that we have heard on previous occasions and in previous debates, I fear that there will be a mood to divide the House and put the question to hon. Members in the
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Division Lobby. This evening, the Minister need say only that talks will commence. That is all that would be necessary to satisfy me that some progress had been made on a very important issue.Dr. Marek: I rise briefly to support the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) and my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), who moved new clause 7. New clause 7 does not involve the expenditure of any money whatsoever; it simply asks that the Government undertake investigations to identify the problems and find out whether anything can be done.
My name also appears on new clauses 9 and 10, and I too believe that something should be done. I realise that the Government do not want to spend any money because they want to cut taxes in the Chancellor's November Budget. But even if they do not want to spend money on frozen pensions at this stage, I hope that, as all hon. Members who have spoken have urged, we can at least persuade them to investigate the problems and then to lay a report before Parliament. I do not want to rehearse all the well-known arguments, but I must emphasise the fact that pensioners have contributed to their pensions. They may have contributed not for 40 years of their working life but for only 20 years, but that would still mean that they had contributed enough for half the pension. It will be robbery by the Government and theft by Parliament if pensions continue to be frozen, because they lose their value with inflation.
I know that the Minister is an honest person with integrity, and I appeal to him to read new clause 7. It does not commit the Government to spending a single penny, but simply tells them to investigate, to find out whether there is a problem and to come back with some answers, because the economy may be better in a year's time. I also hope that the official Opposition will support the new clause, because it does not entail the use of a single penny, and I look forward to receiving a bit of support from my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar).
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