Overseas Pensioners (Hansard, 7 July 1983)

§ Lord Mackie of Benshie
My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur)
My Lords, the general position is that British pensioners abroad receive their pensions at the rate in force when they left this country, or when they first qualified if they were then already abroad. Subsequent increases are payable only where provided for under EC regulations, or under a bilateral agreement on social security between the United Kingdom and another country. In view of the continuing need for restraint on public expenditure, we have no plans to change this situation.

§ Lord Mackie of Benshie
My Lords, I thank the Minister for that rather unhelpful reply. Can he perhaps tell me why these citizens, who have paid their contributions consistently throughout their working lives, are denied in this way? Is there any reason for it, other than simply saving money in regard to one section of the community as against another section?

§ Lord Glenarthur
My Lords, it is a fact that successive Governments have taken the view that our social security system is designed primarily for people living in this country. The cost of increasing pensions falls mainly on contributors and employers here, and it would by unreasonable to ask them to bear the cost of increases paid to people who have left the country.

§ Lord Leatherland
My Lords, can the Minister tell us whether these people pay British income tax while they are living abroad? It would be a useful thing to know.

§ Lord Glenarthur
My Lords, that depends on the rules which apply in the country in which they live.

§ Baroness Jeger
My Lords, can the Minister say whether these restrictions apply to Civil Service pensioners and to pensioners from the armed forces? Can he also explain the persistent anomaly, for which all Governments are to blame—and I am not making any party point—under which a pensioner can obtain increases if he retires to the United States, but not if he retires to Canada; if he retires to Austria, but not if he retires to Australia; if he retires to Bermuda, but not if he retires to Barbados; if he retires to Yugoslavia, but not if he retires to New Zealand? There seems to be no logic in it. Will the Minister not try to instigate further bilateral agreements to make the situation fairer for the people involved?

§ Lord Glenarthur
My Lords, the noble Baroness has asked me about the Civil Service and the armed forces. So far as I am aware—and if I am wrong I shall let her know—the same situation applies as that which I have already described. So far as concerns the countries to which the noble Baroness referred, pensions are payable at full United Kingdom rates in all EEC countries, including Gibraltar, as well as in Guernsey, Jersey, Sark, the Isle of Man, Austria, Cyprus, Israel, 646 Malta, Spain, Switzerland, Turkey and Yugoslavia. Pensions are paid at partially unfrozen rates—that is, beneficiaries receive increases awarded since the relevant agreement came into force—in Bermuda, Jamaica, Mauritius, Portugal and the United States.

§ Baroness Gardner of Parkes
My Lords, can the Minister say what is the position if people living abroad find their circumstances so changed that they have to return here? Do they then receive the full pension rate or a pension in any way related to that which they were receiving while abroad?

§ Lord Glenarthur
My Lords, that depends very much on the situation of the individual concerned. I do not think it would be possible to give a general answer.

§ Lord Cledwyn of Penrhos
My Lords, is it not extremely inequitable that the pension should be paid in certain countries in Europe that are not members of the European Community but not to those who have gone to Australia and New Zealand? Is this not a matter that the Government would wish to examine carefully? Will the noble Lord give the House an undertaking that he will talk seriously to his right honourable friend about it?

§ Lord Glenarthur
My Lords, I am sure that my right honourable friend will take note of what the noble Lord says. But not all countries meet the kind of conditions that would warrant making a reciprocal agreement. For example, the social security schemes in the United Kingdom and the other countries concerned have to be sufficiently similar for agreement to be practicable.

§ Lord Hatch of Lusby
My Lords, may I ask the noble Lord to reply to the second part of the supplementary question asked by the noble Lord, Lord Mackie of Benshie? Is it not iniquitous that a pensioner who has been contributing to the pension fund all his or her life should be penalised if they choose to go and live in, say, Canada? Is he aware that exactly two weeks ago, by coincidence, I was asked about the status of pensioners in Canada by the relatives of a pensioner who has gone to live in Canada to be with his children? Is it not an iniquitous system, when pensioners have been paying their contributions all their lives, that they should be penalised if they decide to go and live with their family in a Commonwealth country, such as Canada?

§ Lord Glenarthur
My Lords, no, I do not agree that it is iniquitous. What the noble Lord must bear in mind is that many people abroad also receive a pension awarded by the country in which they have chosen to live, so that their British pension is not their only source of income. So far as Canada is concerned, to which the noble Lord referred, the Government are aware of the concern felt by some British pensioners in Canada, and consideration is being given to whether there is any scope for improving the position within current financial constraints. But no forecast can be made at present about whether any change might result from this consideration.

§ Lord Avebury
My Lords, is it entirely a question of money? Can the noble Lord say whether any calculation has been made of the cost of uprating pensions to the full amount in countries such as Canada and Australia compared with the savings that would be made to the National Health Service by reason of it not having to treat these elderly people?

§ Lord Glenarthur
My Lords, the total cost of paying pension increases in countries where they are not at present payable would be £132 million a year at the rates due to come into effect next November.

§ Lord Lovat
My Lords, did I hear the Minister say that there are still old-age pensioners serving in Her Majesty's Forces overseas?

§ Lord Glenarthur
My Lords, I am afraid that the noble Lord must have misheard me.