HL Deb 26 April 1989 vol 506 cc1346-57

8.3 p.m.

Lord Stallard rose to ask Her Majesty's Government whether they will consider, as a matter of urgency, the index-linking of pensions of retired British citizens living in Canada.

The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. It is about retired British citizens now living in Canada whose plight, I submit, is urgent, unjust and unfair. I shall try to explain why in the few minutes at my disposal this evening.

Latest figures, when we can obtain them, suggest that there are about 50,000 people living in Canada receiving some kind of British pension. These pensions vary in amount because pensions paid to British pensioners now living there are frozen at the rates current when they left the United Kingdom or when they first became entitled to a pension if they emigrated before retirement. If they return to the United Kingdom for a visit on holiday or on business, their pension is unfrozen for the duration of the visit and refrozen from the day that they leave the United Kingdom.

These are not people who have turned their backs on Britain for tax reasons or who have chosen to emigrate to Canada to enjoy the climate. No; in the main they are people who have gone to Canada for family reasons, to spend the twilight of their lives with sons or daughters, possibly their last living relatives, and to enjoy watching grandchildren whom they might otherwise never see growing into adulthood.

Most of them paid full national insurance contributions and income taxes during their working lives in Britain and so qualified, in the same way as most of us in this Chamber have done, for an indexed retirement pension. Had they chosen to go to any one of 29 other countries—for example, such countries as Austria, Bermuda, Finland, Israel, Sweden, Switzerland, Turkey, Yugoslavia or the United States of America, to name but a few—they would be receiving a fully indexed pension because we have negotiated reciprocal social security agreements with those countries.

I applaud those agreements and the fact that our retired people in those 29 countries can and do receive regularly up-rated pensions. But in the absence of a similar reciprocal agreement with Canada, many of our people are reduced to living off relatives, or doing some part-time work if it is available and if they are able to do it, in order to supplement their frozen pensions. Some 20,000 of our people are receiving less than £10 per week. I know from letters that I receive from pensioners or their relatives and from contacts that I have with the British Pensioners Association in Canada that many of these very elderly people are suffering real hardship.

By way of illustration, I should like to quote a few extracts from one or two letters that are typical of scores that I and my fellow members of the all-party pensioners group receive on this issue. Writing from Alberta, an elderly lady says: My husband and I both did war service, he making aircraft, and I in the fire service, but still we have been deprived of the pension increase since we came here to be near our only son in 1980. My husband is 76, and I am 70 years of age and both of us working part-time to augment our meagre pension so we can afford subsidised housing, kindly provided for us. Our pension is under $300 for the two of us, and our rent is $362"—; that is per month— so you can see our plight". Another gentleman writes from Ontario: I spent all my working life in England. I fought through the war in the Royal Air Force and was awarded the DFC and Bar. These awards seem rather hollow now and I would be prepared to swap them for an indexed pension". Another gentleman from Ontario says: My wife (age 77) and I (age 79) are permanent residents in Canada, having on 20 June 1985 emigrated from England (our birthplace) to be nearer to our son and daughter at their request. Our being here, you will appreciate, is a great comfort and help to us as we grow older. As you well know, my state pension from the United Kingdom and that of my dependent wife…do not have the benefit of the supplements paid in Britain. Having paid the correct contributions over the years like others in the UK I would have thought it reasonable and fair to apply the increases to us automatically…we moved to Canada on grounds of humanity to be nearer to, and within the comfort of, our own families as we grow older. I understand the increases are paid to UK pensioners living in the USA". I have mentioned that—and in other countries.

There are many scores of such letters from people who are suffering real hardships and cannot understand why there is still no reciprocal agreement that would help; and nor can I. Canadian pensioners living here already receive a supplement from their government and have done so for a number of years. Why then have we no reciprocal agreement with Canada, a Commonwealth country, with a record of friendship and loyalty to Britain second to none?

It might be helpful to consider what has happened so far and to review the current situation. Between 1969 and 1972 discussions took place between the two governments about a reciprocal agreement on a proposal put forward by the British Government at the time. The proposal would have provided for future increases in rate, but not past increases, to be paid to UK pensioners in Canada. That is what we are now asking for. It also tried to persuade Canada to export basic old-age security pensions without conditions as part of an agreement.

This provision created legal and technical difficulties for the Canadian Government at the time. No immediate agreement could be reached. By 1977, however, Canada had been able to carry through amendments to its old-age security legislation and once again indicated its readiness to commence negotiations. Discussions took place in 1977 and in 1978, when Britain made it clear that there were now constraints on public expenditure which meant that the necessary resources were not available for the unfreezing of pensions in Canada. Further attempts were made by the Canadian Government to reach agreement, but the response was still the same until 1983, when United Kingdom officials implied that the Government might be prepared to allocate the necessary funds. Indeed later in that same year the need for an urgent agreement was discussed by our present Prime Minister and the then Prime Minister of Canada, Mr. Trudeau, at a meeting of Commonwealth Prime Ministers.

But in November of the same year the United Kingdom Government informed the Canadian Government that they could not proceed with a social security agreement, and there the matter still rests. But the campaign for partial unfreezing is gaining momentum. How much would it cost? There have been many attempts by all of us to get accurate estimates of what the cost would be. I believe that we are given more propaganda than accurate researched estimates. However, I shall quote from the most up-to-date reply that we have received, written to my co-chairman of the group, Sir John Farr, from the Joint Parliamentary Under-Secretary of State, Lord Skelmersdale. The reply was dated March 1988. He said: The Government's position on the matter has not changed since I wrote to you on 20 July and Nicholas Scott wrote on 29 October following your Parliamentary Question on the subject. The estimated cost of partial unfreezing of British pensioners in Canada is approximately £2 million based on April 1987 rates. This cost would, of course, increase each year until all British pensioners in Canada were receiving the same amount of pension as if they were resident in the United Kingdom. While I take your point about the Canadian Government's willingness to contribute towards the cost of an agreement, the fact remains that the money for paying future increases in British pensions would still have to be found from the money available for social security and the cost would be great". That was the most recent reply received.

The British Pensioners Association in correspondence over the years has suggested, among other things, that since pensioners living in Canada do not use the National Health Service, and nor do they use the United Kingdom social services, it ought to be possible to offset any savings against the costs of uprating United Kingdom pensions. In response to that suggestion the Under-Secretary of State for Health and Social Security in the other place replied, in 1986: The NHS and social services are part of the social structure that is available to residents here and they are financed on that basis. To draw an analogy, we do not give a cash benefit to those who opt for making private arrangements".—[Official Report, Commons, 23/4/1986; col. 401.] I suggest that that analogy is no longer relevant because we are not in the process of creating all sorts of precedents and offering cash incentives. For example, we are in the process of proposing that people who pay national health pension premiums or private health premiums for their retired relatives can claim income tax relief. Cash rebates are available on those items. Cash incentives are being paid to people to go private. We are conducting a very expensive and intensive campaign to encourage people to go private in all kinds of health and welfare fields and in pensions. I think the analogy has been answered by the Government themselves, who have now conceded the principle of giving cash benefits and offering all kinds of incentives for people to go private.

In reply to a recent parliamentary Question, the Government have said that work is in hand on an agreement but the finance is not available. That is the most up-to-date position that we have. I hope that the noble Lord who is to reply will not just repeat the same old tired negative and insensitive responses that we have heard over the years but will try to reply to the very reasonable question being asked by those of us who are striving to bring this matter to a positive conclusion.

Perhaps I may repeat some of the questions we are being asked, questions such as: why people who have qualified, as we have, for a full pension are not receiving it? That is a simple and straightforward question. Why, when we accepted the case for a reciprocal agreement in the early 1970s—in fact we proposed a reciprocal agreement for a justified case, otherwise we should not have done so—are the Government now digging their heels in, the more so when we are told that the economy is far stronger now than for decades past? We are told that it is far stronger and healthier than it was 10 years ago. It can justifiably be argued that the money is now available, as we have just heard from the noble Lord, Lord Strathclyde, in the previous debate. There is money; we are in surplus. The Government have money that they do not know how to spend. We are suggesting one reasonable and justifiable way of spending it.

Why have the United Kingdom been able in those circumstances to agree with 29 other countries, but not with Canada? What has been the progress in the discussions on a reciprocal agreement with the Soviet Union which was reported some months ago? Why, when the Canadian Government have offered such a generous contribution towards the cost of a reciprocal agreement—I understand that they offered 21.5 million dollars—towards the setting up of a reciprocal agreement, on top of the payments that they already make to Canadian pensioners in this country, have the Government not been able to make a more positive response?

The demand for a reciprocal agreement is supported by the National Federation of Old Age Pensioners in this country, by the trade union pensioners' organisations here, by the all-party Pensioners' Parliamentary Group, by Age Concern and by the British Pensioners Association in Canada, and last year 242 Members of Parliament signed an early day motion in support of such an agreement. That is a large number of MPs to sign such a motion. It was always understood that if 100 Members of Parliament signed an early day motion, it was almost automatically debated. But 242 signed a motion last year in favour of a reciprocal agreement. Currently a similar motion is attracting more and more signatures daily, and I believe it stands not far short of 100 now.

In the face of all this growing support, as well as the Canadian Government's overwhelming desire to enter a reciprocal agreement and their willingness to make a substantial financial contribution towards it, surely the time has now come for a more constructive response from our Government.

I end as I began. The plight of our retired people in Canada is urgent because of the hardship the present circumstances inflict on our people there. It is unjust, because these are people who have served their country in war time and have paid all their contributions and taxes in peacetime and have now gone, for perfectly understandable reasons, to live in a Commonwealth country. It is unfair and discriminatory because we have reciprocal agreements with every country where sizeable pockets of British people are living. The only exception is Canada. I submit that we owe it to our pensioners in Canada to initiate further negotiations forthwith with the Canadian Government with a view to signing a reciprocal social security agreement that will unfreeze pensions paid to United Kingdom pensioners in Canada.

8.20 p.m.

Earl Grey

My Lords, we on these Benches are extremely grateful to the noble Lord, Lord Stallard, for once again bringing to the attention of the Government the need to uprate the pensions of British people living in Canada. It is a serious problem which has dragged on for years. It has always received the same answer from the Government: that they cannot afford it. That is irrespective of the fact that it is high time that a satisfactory solution was found.

The Government recognise that in principle a case has been made. The all-party parliamentary group for pensioners support the objective of the British Pensioners Association of Canada to uprate retirement and widows' pensions in line with those of UK counterparts. I am at a loss. I cannot understand why someone living in Canada who receives a British pension should be treated differently to someone living here. For whatever reason, that person is being penalised for living in Canada.

In spite of the worry and the strength of feeling of pensioners in Canada and of the willingness of the Canadian Government to enter into agreements, the last time our Government had discussions with Canada about the subject was in 1983—; —;six years ago. The Government's stock reply is that it is too expensive to implement the uprating of pensions. They persist in saying that, and I assume they will continue to do so. They do not appear to be prepared to negotiate.

The noble Baroness, Lady Trumpington, has stated previously in this House that the Government accept the case for a comprehensive social security convention with Canada which will enable increases in pensions to be paid. I am sure that they would wish to do so but they persist in referring to the cost. What about the cost to the pensioners in Canada who feel let down?

I ask the Government to review the situation at last and to give a different answer to the one we are tired of hearing. I ask them to give some assurance or even a crumb to those who are asking to be treated fairly in line with their British counterparts living here and elsewhere.

8.22 p.m.

The Earl of Longford

My Lords, the famous orator Sir Edmund Burke once delivered a great speech. When he had finished the next speaker rose only to mutter, "I say ditto to Mr. Burke", and then sat down. I can do little more than say "ditto" to my noble friend Lord Stallard who presented his case most strongly. In any event, I have already made a speech today and it is a good rule—although one that is not always observed in this House—that one should not speak twice in one day.

I find my noble friends Lord Stallard and Lady Jeger deeply imbued with the subject. I realised that they have fought for the right for almost 20 years. The least I can do is to rise to my feet and say a little more than "ditto".

The attitude of the Government is mean; we can agree about that. One often accuses the Government of being mean—rightly so in this case. They are also mysterious. Why will they do nothing in connection with Canada? There are agreements with 29 other countries. I press the Minister hard for an answer. I cannot write his speech for him but I shall interrupt repeatedly if he does not answer the question. Why can there not be an agreement with Canada when there is an agreement with 29 other countries? The matter has dragged on for years. Is there a sinister bureaucrat somewhere blocking the issue? Was he committed to opposing it many years ago and still cannot let go? What is the trouble? It is obviously mean, but it is also so mysterious.

Having stressed the mystery I shall leave the subject to my noble friend Lady Jeger. I implore the noble Lord who values the reputation of his Government to explain the difficulty in this case.

8.24 p.m.

Baroness Jeger

My Lords, we are all grateful to my noble friend Lord Stallard. He has worked for many years to try to put right this obvious injustice. I feel a little sorry for the Minister because he looks as lonely as a hermit. Not a single Back Bencher is present to support him. He does not have a Whip's shoulder to weep on and only just now has the noble Lord, Lord Strathclyde, rushed into the Chamber. No doubt he has done so to tell his noble friend that he should not say that the Government cannot afford the money, having himself told us in the preceding debate that there is "loads of money" and that the Government are doing marvellously; that is, except as regards British pensioners living in Canada. The indications are that none of his Back Benchers cares or that they are all to embarrassed to come here tonight to support a case which they know to be totally unjust and unfair. I know that privately many of them believe that to treat one country so differently is totally unacceptable.

When I first came to this House 10 years ago I found that the doors were shut as I was on the way out. When I asked the policeman why, he said, "Well, my Lady, it is seven o'clock". I know therefore that it is not regarded as being seemly for this House to sit for too long. However, there is a serious question to be asked, and I shall not be inhibited by the fact that it is now twenty-five past eight. Perhaps that is because I was brought up in the other place where twenty-five past eight is just about apéritif time.

Can the noble Lord say whether there is any consistency in the treatment of pensioners living in Canada? We heard from my noble friend Lord Stallard about the discrepancies which exist between one country and another—that I can go to Turkey to receive my uprating but that if I go to Canada I cannot. I am much more likely to have a boyfriend in Canada than in Turkey—or even a husband.

There is a further inconsistency. Can the Minister confirm my findings that if a person is in receipt of a public service pension or an armed forces pension, or if he is a retired Member of Parliament with an index-linked pension, he can take his index linking with him? Therefore, the index linking applies to public service pensioners such as firemen, policemen, retired soldiers, MPs and civil servants but not to ordinary working people who have paid their normal contributions as citizens of this country. In addition to the discrimination as regards the territory to which one retires there is also the totally unaccceptable discrimination between the status of the pensioners.

As my noble friend said, we have not taken into account the savings to the social services in this country. All the people I know who have gone to Canada have done so for family reasons. Many were war brides. They have their parents with them in order to care for them. A former constituent of mine who is now 99 years old became totally incapacitated and crippled with arthritis at the age of 70. Since then she has been cared for by her family in Canada —where the daughter went after the war to marry. Her son-in-law is now approaching the pension age in Canada. That old lady must have saved the Treasury—which has so much money to spare—thousands of pounds in health care, social service care and all the maintenance that would have been needed. I gather from my correspondence that there are many families in that position. We are not talking about high flyers who have rushed off to Canada because they will be paid better wages in the universities there than in England under this Government. They are mostly people who went there for family reasons, often connected with the war situation. Therefore, we have particular ties with them.

I do not know whether the noble Lord can explain—and I have great respect for his ability to explain the inexplicable—why there should be a distinction between two sisters, one of whom married a GI living in the United States and another about five miles away who married a Canadian soldier. I love them all, but I do not see why there should be a discrimination. The sister who is married on one side of the line can receive an increased pension, but the other sister cannot. I long to hear what the Minister says, because I believe that that is a challenge to his ingenuity, his generosity of thought and his sensibility about those matters. Whatever he says tonight, this problem will not go away. Thousands of people in Canada wish to know why the British Government are discriminating against them.

What is more, although I should not do this, I shall give the noble Lord a little political advice. Most of the letters I receive come from their families who are here and they have votes. They are the siblings. Many of them are not likely to vote Tory while their relatives in Canada are suffering from this discrimination. Therefore, if only for that selfish reason, I hope that the Minister will be able to say something more original than the earlier replies which we have received on this question.

8.33 p.m.

Lord Henley

My Lords, I am sorry that the noble Baroness thought that I looked like a hermit and did not have a shoulder to rest on. I shall endeavour to answer as many of the points raised as possible in my speech. However, I expect that I shall not be able to satisfy the noble Lord, Lord Stallard.

I believe that I should start by thanking the noble Lord for raising this matter again. As he knows, this has been an issue for quite some time, and the debate will give me an opportunity to bring the House up to date on recent developments. However, first, I should like to give the background for those like the noble Earl, Lord Longford, who may not be quite so familiar with the issues as the noble Lord, Lord Stallard.

Although British retirement and widows pensions are paid anywhere in the world, in the majority of cases, some 60 per cent. are paid without cost of living increases; that is, they are frozen. This means that retired people who go abroad will continue to receive their pensions at the rate payable when they leave this country. Those who emigrated when younger will get a pension payable at the rate in force when they reach retirement age. Neither group will get the benefit of subsequent annual upratings. This policy has been followed by successive governments since 1955. The logic is that our social security system has been designed to provide for people in this country and that annual upratings ensure that pensions are protected against price increases here. Indeed, until 1955, apart from countries with which we have reciprocal agreements, UK pensions were not payable abroad at all apart from short-term absences. A major change of policy occurred in July 1955 when the law was changed to allow pensions to be paid abroad. But there was still not provision for uprating; the expression commonly used is that pensions are frozen in these circumstances. It is fair to point out that people affected should have known, or found out, that this would be the position when they went abroad and should have arranged their affairs accordingly. After all, pensions have been frozen in this way for 34 years. I should like now to explain in more detail the situation of United Kingdom pensioners in Canada.

Lord Stallard

My Lords, before the noble Lord leaves that, will he tell us about the reciprocal arrangements? He told us why pensioners do not have their pensions uprated in some countries. What is the explanation of reciprocal arrangements where pensioners receive increases not related to the cost of living here?

Lord Henley

My Lords, I take the noble Lord's point, but I shall be coming to that. We have made reciprocal agreements with different countries at different times. Back in 1955, inflation was not seen to be the problem which it later became, and for historical reasons certain anomalies have grown up.

As I said, the noble Lord was worried about the numbers of pensioners in Canada and he believes that there are about 50,000. There are in fact over 83,000 retirement and widow pensioners in Canada who receive frozen pensions.

Lord Stallard

My Lords, I do not believe that there has been an increase of 30,000 in the past two years. That is impossible. In fact, I know that there has not been that amount of emigration to Canada. That is why we cannot be certain about figures. We have now heard four figures—;37,000, 41,000, 56,000 and 83,000. It is like a raffle.

Lord Henley

My Lords, I am terribly sorry, but the figure I have is 83,000.

Lord Stallard

My Lords, that is a propaganda figure.

Lord Henley

My Lords, the noble Lord may say that it is a propaganda figure, but I am afraid that I shall stick to it for the moment and he will have to accept that.

There are over 83,000 retirement and widow pensioners in Canada who receive frozen pensions. Since 1959 the United Kingdom has had a social security agreement with Canada. It is limited in scope and does not cover the index linking of United Kingdom pensions payable there. The UK proposed a comprehensive agreement to include unfreezing in 1972, as the noble Lord, Lord Stallard, said but the Canadian authorities were not then able to negotiate. Since then we have been unable to make progress because of the need to keep a tight rein on public expenditure. To increase all pensions in Canada to full UK rates would cost—and these are the figures I have—over £59 million a year at 1989 rates. If we paid future upratings only rather than increased pensions to the full unfrozen rate immediately, the first year costs would be almost £7 million, and we should reach, for practical purposes the £59 million cost to which I have already referred after 15 to 20 years.

It is true that during discussions between officials on a possible change to the agreement in 1987 Canadian officials said that their Government were prepared to spend some 8.5 million Canadian dollars on their pensioners in the UK. Under the current agreement a pensioner can be treated as having paid UK national insurance contributions for a period of Canadian residence and so get enhanced entitlement to UK pension.

Having received some advice, perhaps I can go back to the noble Lord's question on the figure of £83,000. Those figures are a computer count from the department's Newcastle computer and they show a 10 per cent. increase over the past 12 months. I hope that he will accept that figure.

Lord Stallard

My Lords, I shall accept that figure if the noble Lord will accept the figure of £2 million for immediate uprating which the noble Lord, Lord Skelmersdale, gave us last year. The Minister gave us a figure of £7 million this evening.

Lord Henley

My Lords, I am afraid that I shall have to write to the noble Lord on that. I have not read the letter from my noble friend Lord Skelmersdale. The figure I have is £7 million, and I shall have to stick to that.

The cost of this enhancement could be considerably reduced, if not eliminated, depending on the precise terms of a renegotiated agreement. But the long-term emerging costs would certainly not be in the UK's favour. In 1955, when it first became policy to pay pensions abroad, inflation rates were very low and upratings were less frequent. Since then higher levels of inflation and an established pattern of upratings have brought considerable pressure for unfreezing—not just for pensioners in Canada. Two other Commonwealth countries which are affected in much the same way are Australia and New Zealand. We have reciprocal agreements with both of these countries but they also do not provide for the payment of pension increases.

I am sure noble Lords will accept that if we paid pension increases in Canada we should inevitably have to do so also in Australia and New Zealand, which would considerably increase the cost of such a change. To see the full picture we must therefore look at those two countries as well as Canada.

To unfreeze pensions completely in all three countries would cost about £209 million at 1989 rates, an increase of 42.5 per cent. on current expenditure on overseas pensions. To pay future cost of living increases only, ignoring past increases, would cost about £23 million in 1989–90, rising significantly each year until all pensioners in those countries were paid at full UK rates; so eventually reaching the 1989 cost of £209 million.

The only circumstances in which overseas pensions are not frozen are where we have a reciprocal agreement with a country to provide specifically for upratings to apply or where the pensioner is in the EC. I should add that we had such agreements with virtually all EC countries before our accession. Agreements were made primarily to protect the social security interests of people moving between the UK and any other country. The agreements we have with Canada, Australia and New Zealand do not provide for upratings, largely for historical reasons. The agreements were made long ago when inflation world-wide was low and upratings were comparatively infrequent so that at the time people saw no reason to incorporate provision for them in agreements. When the later agreements were negotiated costs were not the important factor that they later became.

Before moving on to more general issues, I refer to the question asked by the noble Lord, Lord Stallard, about progress on the social security agreement with the Soviet Union. No negotiations have ever taken place on such an agreement. I know nothing about such an agreement and I do not know where the noble Lord heard about it. The noble Lord, Lord Stallard, also said that the cost of pensions uprating should be offset by the saving to the National Health Service, which pensioners overseas do not make use of. Of course, it is possible to look at averages but one cannot speculate on what calls these people as individuals would have made on the NHS. Moreover many—indeed we know it is a majority, though we cannot produce figures—went abroad long before reaching pension age so that for many years they did not contribute to the health service's costs. What is more, the rate of pension a person gets is quite separate from any benefit he or she may or may not get from the NHS, which is paid for primarily from general taxation rather than from national insurance contributions.

What I have said so far is rather one-sided, in that I have explained what we do and do not do for our pensioners overseas. In view of the importance in this context of Canada, Australia and New Zealand, I ought to say a few words about what they do for their pensioners who leave their countries. Canada and Australia pay pensions to people in the UK and they uprate them but they have other restrictions which reduce their expenditure in this field. Canada pays pensions in its own country to people who have lived there 10 years but will pay overseas, and uprate, only if the pensioner had at least 20 years' residence. We pay any pension overseas.

Australia allows its people to continue to draw pensions when they come here but does not allow people to claim pension for the first time while abroad no matter how long they may have lived and worked in Australia. We, by contrast, allow people to claim while abroad and there are, in fact, more pensions paid to such people than to people who have emigrated as pensioners. New Zealand simply does not pay pensions to people in the UK.

These facts demonstrate that matters are not straightforward and that there are factors working both ways. If ever the resources became available to permit us to unfreeze overseas pensions we should want to renegotiate our agreements with those countries so that pensioners gain in both directions and so that the home governments, including our own, bear the appropriate costs.

Social security is a very big spender—some £47.6 billion in 1988–89, of which retirement pensions accounted for about £19.5 billion. Included in this figure is almost half a billion pounds a year that we pay to almost 495,000 pensioners living overseas in some 175 countries; and of these about 298,000, or 60 per cent., have frozen pensions. It would cost £248 million a year to unfreeze these pensions completely, including £59 million for pensioners in Canada.

A major principle of government policy is to restrict public expenditure in order to free resources for investment, which in its turn produces wealth. We are seeing the fruits of this policy in the shape of economic growth and falling unemployment, as my noble friend Lord Strathclyde said in the previous debate. We therefore cannot allow social security expenditure, already over 30 per cent., of all public expenditure, to expand indefinitely and, as a result, our policy has to be one of targeting the limited resources available to those most in need. In view of the inevitable consequences for those pensions payable in Australia and New Zealand I hope I have explained why we do not consider it appropriate to make available the considerable sum needed to unfreeze pensions payable in Canada.

Baroness Jeger

My Lords, before the noble Lord sits down perhaps he can answer two quick questions. He told us that to unfreeze pensions would cost £59 million. However, how much does it cost for British residents in the United States who already have their pensions unfrozen? Why can the Government afford one but not the other?

Secondly, the noble Lord has not answered my serious question about the rights of public service pensioners, including civil servants, MPs and members of the forces, to be entitled to uprating.

Lord Henley

My Lords, on the first question concerning the United States, I explained that it was an historical anomaly. The agreement with America—I cannot remember the date—was at a different time. We accept that it is an historical anomaly. It would be expensive to now make a change for Canada, Australia, New Zealand and the other countries. It would cost £250 million.

The second question put by the noble Baroness is rather complicated and I need to take advice. However, I promise to write to her.

Baroness Jeger

My Lords, perhaps I may be permitted to give the noble Lord some advice. I have in my hand a letter from his predecessor, the noble Lord, Lord Glenarthur, dated 26th July 1983, which states: Public service pensions generally, including those for civil servants and members of the forces, are regarded as occupational pensions and are payable with increases anywhere in the world".

Lord Henley

Yes, my Lords, but the noble Baroness was asking why that was the case. I said that I did not know why it was the case and that I would write to the noble Baroness. Is that not enough?

Baroness Jeger

No, my Lords.

Lord Henley

My Lords, I should add that this is an Unstarred Question and it is normally in order that when the Minister sits down the debate ends.

House adjourned at eleven minutes before nine o'clock.