UK Pensioners in Canada: Convention (Hansard, 13 May 1986)

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

§ Baroness Trumpington
My Lords, the Canadian Government would make available an amount of money which in 1983 they estimated at 21½ million dollars a year. At present only residence in Canada is counted for Canadian old-age security benefits. The Canadian Government would modify the residence test to the advantage of people in or from the United Kingdom.

§ Lord Stallard
My Lords, I thank the noble Baroness for that disappointing and tired old reply—the same reply we have had for many years now. Does she accept that the Canadian Government are prepared to put in the 21.5 million dollars as soon as an agreement can be reached with the United Kingdom Government to pay the initial index-linked uprating that is necessary? Can she explain, because I fail to understand it, why it is possible to come to arrangements with Austria, Israel, Turkey, the United States, Yugoslavia, Cyprus, the Bermudas and 21 other Commonwealth and non-Commonwealth countries and yet not come to an agreement with Canada, which is more than willing to reach such an agreement and has made such a genuine and generous offer in order to get this off the ground?

§ Baroness Trumpington
My Lords, your Lordships will have to forgive the length of my reply to that rather long question. In principle the Government accept the case for a comprehensive social security convention with Canada which would enable increases in pensions to be paid. The problem is one of cost. With regard to the money which the Canadian Government quoted as being available in 1983, I understand that the 21½ million dollars is made up of 13 million dollars for people in Canada and 8½ million dollars for people in the United Kingdom. The money would not come to the United Kingdom Exchequer and would not affect the amount which we should have to find out of social security funds in order to finance the uprating.
With regard to the deals which we made with other countries which were reached in the 1950s and 1960s, there is little doubt that had it been possible around that time to reach a similar agreement with Canada, we should have done so. We offered it in 1972, but the Canadian authorities were unable to negotiate with us at that time. Financial constraints in the United Kingdom then tightened.

§ Baroness Jeger
My Lords, is the noble Baroness saying to the House that only the question of cost is inhibiting some solution to this problem? If so, can she explain why arrangements were made with 26 other countries which made no contribution at all to help? There is a great feeling among elderly United Kingdom citizens who have gone to Canada. Many of them—widows and widowers—have gone to live with their married sons or daughters, have made a home there, and they save the DHSS a great deal of money by doing so.

§ Baroness Trumpington
My Lords, with regard to costs, the initial cost to the United Kingdom based on the number of pensions at December 1985–56,451—would be about £4.8 million a year. The ultimate cost would be more than £35 million a year. These estimates are based on the number of pensioners at the end of 1985 and November 1985 rates of benefit. We cannot at present commit resources on this scale. With regard to agreements with other countries, I have previously answered that point.

§ Baroness Fisher of Rednal
My Lords, the noble Baroness gave us a figure for 1972. Can she give us more up-to-date information on when she feels there will be a settlement of this injustice?

§ Baroness Trumpington
My Lords, I think the noble Baroness may have misunderstood me. The year 1972 was the year when we offered an agreement to the Canadian Government, who were then not able to come to an agreement with us because at that time they did not have the power to do so. Since then our financial situation has tightened.

§ Lord Carmichael of Kelvingrove
My Lords, is the noble Baroness aware that I have had correspondence from people in Canada who in addition to feeling let down by not being given increments from the United Kingdom are concerned about the great delay in even the existing pension being sent to them, in some areas a delay of four or five weeks? They have been in contact with Newcastle but they have not been able to get an improvement. Will the noble Baroness please look into this to see whether anything can be done so that pensions can be paid at the proper time?

§ Baroness Trumpington
Gladly, my Lords.

§ Lord Hatch of Lusby
My Lords, is the noble Baroness not aware that there are many old people, as has been described by my noble friend, who have moved to Canada during their pensionable years to live with relatives and who are being denied their rightful pensions? When the noble Baroness talks about a cost to the Government, is it not the case that those old people have been contributing to their pensions all their working lives and that it is their money that is due to them and not Government money?

§ Baroness Trumpington
My Lords, the noble Lord knows that there is not a pot of money sitting there, waiting to be paid to pensioners. He should know that the money paid by people in work goes to pay the pensioners now. The agreements that were made with other countries were made made at a time when this country could afford more money going out and when there were fewer pensioners. The situation has now changed.

§ Lord Stallard
My Lords, I return to the original Answer of the noble Baroness, when she mentioned 1983. That was the year when our Prime Minister agreed with Prime Minister Trudeau that the matter was urgent and the Government of the noble Baroness had accepted the principle of the reciprocal arrangement. What has happened since then?
1038 When the noble Baroness quotes a figure of £35 million, she is doing what has been done in every reply that we have had to this question; she is misleading the House. We are not asking for the total uprating and retrospective payment of all increases to all pensioners; that is the £35 million. We are asking simply for increases, as and when they become due, to be paid to those people in Canada who qualify for them. That is reflected in the figure of £4.5 million maximum that the noble Baroness mentioned later.

§ Baroness Trumpington
My Lords, I merely repeat what I said earlier: that the problem is one of cost. Officials of my department are in close touch with Canadian officials to bring the terms of a suitable convention as near completion as possible, as soon as possible.