This piece first appeared in The Weekly Telegraph on 1 July 1999
The text here may not be identical to the published text


Fight against 'unfair' policy reaches Lords

New hope for 450,000 expates on frozen pensions

The House of Lords may soon be asked to consider the problems faced by 450,000 pensioners living overseas who lose thousands of pounds a year because their retirement pensions are frozen at the rate they were first paid. Some get as little as £8 a week instead of the full retirement pension of £66.75.

Now the Conservative Opposition in the House of Lords is considering supporting their cause. The Tory Frontbench spokesman on social security Lord Higgins has told The Daily Telegraph that he is considering adopting a series of amendments which would ensure the pensions paid to people throughout the world are increased each year in line with inflation.

At the moment people living in most countries of the world do not get the yearly increases enjoyed by those who stay in the UK. Pensioners are only paid the annual rise in their UK pensions in 39 countries outside the UK (see below). Around 550,000 UK pensioners live in these countries. But everywhere else in the world UK retirement pensioner get a pension which is frozen at the rate which was first paid to them abroad. Around 450,000 pensioners are in this position. Some of them, who first claimed their pension many years ago, still get as little as £8 a week despite paying National Insurance Contributions in the UK all their working lives.

The Government says it would cost £275 million a year to correct this anomaly and pay full inflation increases to everyone. But campaigners say that is a small fraction of the £1.2 billion a year the Government will save through the cuts in social security spending it is implementing in its controversial Welfare Reform and Pensions Bill which the Lords is considering this week. The Bill ran into difficulties in the House of Commons last month when more than 60 Labour MPs voted against the Government's plans to cut back on the benefits paid to disabled people. The Government tried to avoid the rebellion by delaying the Bill and imposing a strict timetable on the debate. It eventually won the vote. But as a result of the timetable, amendments tabled by Michael Colvin MP, which would have ensured overseas pensioners were paid their pensions with full cost-of-living increases, were not even discussed, still less voted on.

Now campaigners are hoping they will have more luck in the House of Lords. The Welfare Reform Bill was given its second reading by the Lords on June 10. And Tory peers warned the Government not to curtail the debate as it had in the Commons. Lord Higgins told the Government

"There is much in this Bill on which the House of Commons will need to think again, and we shall do everything we can to ensure that matters are scrutinised properly and that good sense prevails. A very difficult task lies ahead of us because of the complexity, scope and extension of the Bill into so many different areas. I believe it is right that we should give every attention to the legislation."

If the Conservatives do adopt the cause of the overseas pensioners it will complete the party political volte face on the campaign. For years the campaigners fought the Conservative government for a change of heart - often with support from senior figures in the Labour Party. But in power, the Labour Government has proved as determined as its predecessors to avoid spending the money needed to give the full pension uprating to the 450,000 pensioners overseas whose pensions are frozen. If the Tory opposition now adopts the opposite line too and supports the campaigners it spent 18 years ignoring, it will just prove the old anarchist slogan 'No matter who you vote for the Government always gets in'. One could add 'and the Opposition will always oppose.'

However, there is a little way to go yet. Lord Higgins told The Daily Telegraph it was still not certain that the campaign would get official backing from the Tory peers.

"It's a highly complex Bill. We're looking at a vast range of amendments. There were some amendments on this subject tabled in the House of Commons - we are looking at them in the context of the Bill as a whole. We are very sympathetic but we're covering the whole of the Bill. The committee stage starts on Thursday and we start with Stakeholder Pensions. It will be about 6 days in Committee so there's a little time yet."

Whatever the politics, Douglas Ross, President of the Canadian Alliance of British Pensioners says that this Government can certainly afford to change the law.

"The Labour Government received a windfall of almost £2 billion underspent on social security benefits during its first year in office. And by living abroad the 450,000 pensioners with frozen pensions save the National Health Service almost £750 million a year in health and community hospital care they do not use. And of course they are saving £275 million by not uprating their pensions. Britain is taking shameful financial advantage of almost half their elderly ex-patriate citizens."


UK retirement pensions are uprated in 39 countries

European Union (all) Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden
European Economic Area (all) Iceland, Norway, Liechtenstein
Commonwealth (5 out of 54) Barbados, Cyprus, Jamaica, Malta, Mauritius
British Overseas Territories (2 out of 13) Bermuda, Gibraltar (In the Falkland Islands the local government tops up frozen UK pensions to the level that would have been paid in the UK.)
Crown Dependencies (all) Alderney, Guernsey, Isle of Man, Jersey, Sark
Former Yugoslavia (all) Bosnia-Hercegovina, Croatia, Macedonia, Slovenia, Yugoslavia (Serbia, including Kosovo)
Others (5 out of around 100) Israel, Philippines, Switzerland, Turkey, United States of America

1 July 1999

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