This piece first appeared in The Daily Telegraph on 25 May 2002
The text here may not be identical to the published text

Farewell to Blighty, hello to poverty

Government fights to ensure pensioners abroad do not receive their due

A 61-year-old British woman living in South Africa could face bankruptcy and the loss of her home after the UK Government decided to make her pay the whole cost of a crucial test case in the High Court which it won this week. Annette Carson went to court to challenge the long-standing policy of the Department for Work and Pensions which does not pay the annual rise in the state pension to ex-patriates living in most other countries around the world. Annette’s UK pension is frozen at the level when it was first paid in September 2000. It will never rise and she is already £500 a year worse off than if she had stayed in Britain. That gap will grow as the UK pension is uprated annually and hers remains frozen.

Her lawyers claimed that the DWP was breaking two provisions of the Human Rights Act 1998 - depriving her of her property and doing so in a way that discriminated against her compared with people who lived in the UK and some other countries.

There are about 490,000 UK retirement pensioners in the same position as Annette, mostly living in Australia, Canada, New Zealand and South Africa. Their retirement pensions are never uprated with inflation; some older pensioners are still receiving as little as £10 a week first paid in the 1970s. However, another 440,000 ex-patriates who live in 40 other states and territories, including the European Union and the United States of America, do get their pensions increased each year in line with inflation. In November 2000 the then Pensions Minister, Jeff (now Lord) Rooker said "I am not prepared to defend the logic of the present situation. It is illogical." But his government, like its predecessors, has refused to uprate all pensions paid abroad, citing the cost of more than £300 million a year.

Last year, the South African Alliance of British Pensioners decided to challenge this policy in the courts and Annette Carson volunteered to be the test case. She had moved from London to South Africa in 1989 to take up a job and decided to stay.

"I continued with my UK pension contributions because wherever you live in the world you want to do that. The Department of Social Security, as it was then, told me how much to pay but not that my pension would be frozen. I only found that out when I read it in the Telegraph. I volunteered to be a test case. I feel I am doing it for hundreds of thousands of people not just for myself."

That challenge failed this week. In a 26 page judgement Mr Justice Stanley Burnton denied that Mrs Carson had been deprived of anything, refused to accept that there had been discrimination, and concluded that the matter was "political not judicial. The decision to pay…uprated pensions must be made by Parliament."

But as the judgement came to an end, the barrister for the Crown, James Eadie, stood up to demand that Mrs Carson pay his fees and all the other costs incurred by the DWP in defending the case. After some argument the judge agreed. "Mrs Carson must have been aware of the contingent costs and aware of the prospects of success. So although the public interest is affected in that large numbers would stand to benefit if Mrs Carson won, there is no reason to depart from the [normal] rule". In English law, the loser pays.

The DWP could not say what its costs would be but The Daily Telegraph understands it will be at least £100,000 and probably more. A spokesman for the DWP said "Anyone bringing a court case must consider the cost implications. The principle remains that the Government has a duty to the British taxpayer."

The penny-pinching attitude to Annette Carson is in sharp contrast to the estimated £300,000 the Government is planning to spend on sending Environment Secretary Margaret Beckett and 40 officials to Bali for next week’s ‘preparatory talks’ on the 2002 World Summit on Sustainable Development. Annette could not believe it.

"My heart sank. I am aghast, flabbergasted. We obviously had considered costs but the last thing we expected was that the DWP would take such a hard line, especially as it was defending its right to take money from me. I have nothing like that amount. My home is worth around £14,000 and I have an old car and a small amount in the bank. If they don’t uprate my pension I shall eventually have to go back to England anyway and be a burden on the state. So if they bankrupt me too then I shall be even more of a burden."

Georgina Squire, a partner with City solicitors Rosling King, says the Government could pursue Annette for the debt abroad.

"Potentially this debt could be enforced in South Africa. You would have to go to the South African courts and enforcement would depend on their reaction. If she returned to the UK she could not be imprisoned nor have her passport seized or anything like that. The debt has to be enforced through the courts where she lives or where her assets are."

Charles Poole is President of the South African Association of British Pensioners which has supported Mrs Carson’s case but told the court it only had £4000 left in the bank. He says the action will discourage other claims.

"What are they trying to do, slam the door in the face of people bringing Human Rights cases against the government? I can’t see what else it is. I am staggered by the findings of the judge and his comment that it is an issue for Parliament. It seems a very strange summing up in a Human Rights case. I am not sure whether there has been political pressure."

Mr Justice Burnton gave leave to appeal against both his ruling and the order on costs. Annette Carson has 28 days to decide if she can afford to do so.

Further information

South African Association of British Pensioners

Canadian Alliance of British Pensioners

Court judgement 

Case No: CO/2704/01 Neutral Citation No: [2002] EWHC 978 (Admin.)

25 May 2002

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