§ 3.14 p.m.
§ Lord Stallard asked Her Majesty's Government:
§ Whether, following the recent conclusion of a reciprocal social security agreement with Finland, the retirement pensions of retired UK citizens living in Finland will be index linked.
§ Lord HenleyMy Lords, United Kingdom retirement pensions paid in Finland have been index linked since 1984.
§ Lord StallardMy Lords, although I am well aware of that point, I am grateful for the Minister's Answer because it confirms what I thought. When I read that an agreement had been concluded, I wondered how it differed from the 1983–84 agreement, which is in existence. However, if I may go on from that, can the Minister confirm that we have similar arrangements with 30 other countries including the United States of America, Israel and even Yugoslavia—we still have an agreement with Yugoslavia—Portugal, Switzerland and so on? Can the Minister also tell me the different principles that apply to negotiations with countries such as Finland and so on compared with those applying to our kith and kin in countries such as Canada and Australia?
§ Lord HenleyMy Lords, if the noble Lord was well aware of the Answer, I wonder why he put the Question down on the Order Paper. The noble Lord again knows perfectly well what my answer will be and what my answer must be, because the noble Lord has asked this Question on a number of occasions. We have made a certain number of arrangements with other countries. We made them a number of years ago. As I said, the arrangements with Finland were made in 1984 following a commitment made as early as 1977. In the current climate, I do not think that it will be possible to increase fully or to give annual upratings to those claiming pensions in Canada for the reasons that I have given on earlier occasions to the noble Lord. Quite simply, it is a matter of cost. My right honourable friend the Secretary of State has to make very difficult judgments about where to spend the resources that are available for social security. To increase all pensions worldwide would cost some £275 million. Quite honestly, my right honourable friend feels that there are others who have a higher priority.
§ Lord StallardMy Lords, will the noble Lord accept that I have heard that reply for 20 years now? It is always similar except that the figures vary, sometimes higher, sometimes lower. There has been no change in the basic reply. I am still asking what principles are different. What is the principle of negotiation which differs between Finland and Canada?
§ Lord HenleyMy Lords, there is a straightforward principle—one of cost. My right honourable friend has to make very difficult decisions. When the commitment was given to Finland in 1977, there were some 11 old age pensioners residing in Finland and the annual cost was going to be £3,000. There are at the moment—if we take just Canada as an example—some 110,000 pensioners and the annual cost of giving them the full uprating would be some £70 million. My right honourable friend, as I said, has to make very difficult decisions about priorities.