Pensions Bill

Written evidence from British Australian Pensioners Association (BAPA) (PB 04)

1. The author of this submission is President of the British Australian Pensioners Association (BAPA). The Association’s primary objective is to secure the indexation of the United Kingdom Department of Work and Pensions age pensions paid to residents of Australia and other "frozen countries".

2. The problem, and a possible solution, is well explained by a recent Early Day Motion, tabled by Peter Bottomley and Sponsored by Martin Caton, Paul Flynn, and Alan Meale.

3. Early day motion 259

Session: 2013-14

Date tabled: 17.06.2013

4. That this House believes that the past and present government policy of freezing the state pensions for people retiring to one of 123 countries abroad is immoral and discriminatory; notes that this policy is a product of history and not rationality; regrets that pensioners who have paid their national insurance contributions are denied an equal pension and that in some cases the pensioners are struggling on as little as six pounds a week; further notes that people retiring abroad to one of the countries in question deliver considerable savings to the UK economy in terms of unclaimed health and social care costs; is concerned about the effect of this policy on people of working age and the impact this could have on their retirement; and calls on the Government to remove Clause 20 from its Pensions Bill which makes provision to continue this bad policy.

5. BAPA has been involved in the campaign to end the frozen pension regime for about 25 years.

6. The question was investigated in 1996 by the Social Security Committee, precursor of the Work and Pensions Committee, which recommended a vote in prime time. But the then government declined..

7. Hopes were raised when the Carson case seemed to receive a sympathetic hearing in the High Court, but hopes were dashed when the Court ruled that disbursement of public funds was for the government to decide; it was a political matter, not a matter for the courts. This decision was endorsed by subsequent courts, stretching up to the European Court of Human Rights.

8. Several times over the years members have promised to do something about it, but always from opposition. The promises were never followed up when the member concerned became a member of the government or even the appropriate minister.

9. Even the current Pensions Minister is on record saying .."All state retirement pensions in payment to pensioners living outside the United Kingdom shall be subject to annual uprating by the same percentage rate as is applied to such pensions payable to pensioners living in the United Kingdom" And in 2007 he signed EDM 1203, which reads "That this House notes with concern that 520,000 British pensioners living abroad have their pensions frozen in value and thus not increased when the pensions in the United Kingdom receive annual increases; believes the practice of freezing these pensions is wholly unfair, discriminatory and irrational especially when some pensioners living overseas do have their pensions increased annually; believes that all pensioners living abroad, many of whom have made lifelong mandatory payments to their state pensions, are deserving of this annual increase; and urges the Government to bring forward proposals to end the evident unfairness in the current arrangements."

10. Various tenuous excuses are offered, but always it comes down to cost. Time and again ministers claim that the country cannot afford to index our pensions, seemingly unaware of the fact that the total of annual pensions payable from the National Insurance Fund is more than 100 times what it would take to index our pensions. In 2011 the cost of indexing was somewhere in the range 600 – 650 million pounds, while the total cost of pensions was 72,516 million pounds – not to mention the additional cost of social welfare benefits, such as Winter Fuel Allowance, free TV licences, free bus passes and the National Health Service, which is in part funded from National Insurance Contributions. Frozen pensioners do not receive any of these benefits.

11. The introduction of the new single-tier pension provides an excellent opportunity to remedy this ancient wrong.

June 2013.