That this House has considered pensions for people living overseas.
I thank the Backbench Business Committee for allowing this debate. It is a pleasure to serve under your chairmanship, Mr Dowd. For over 70 years, successive Governments have upheld the frozen pension policy. The result on those impacted has been not only a severe financial toll, but a heavy emotional burden. These individuals built their lives and careers in the United Kingdom, contributed their share through national insurance, and then, often later in life, moved abroad, in many cases to join family members. In doing so, they found themselves victims of an outdated policy. Most of them first became aware of the policy only after noticing that their state pension was not increasing in line with policies such as the triple lock, proudly founded by the Conservatives.
Let me be clear about what the frozen pension policy entails: British citizens who retire in certain countries—for example, Canada, Australia, New Zealand, and most of the Commonwealth, in fact—are denied the annual inflationary increases to their state pension. A person retiring to the USA sees their pension uprated yearly, but if they cross the border into Canada, those increases stop. That can result in elderly pensioners receiving as little as £60 a week on average, despite the current basic state pension being £176.45 a week. As many as four in 10 frozen pensioners report struggling to afford most necessities such as food or medicine.
It may be tempting to dismiss this as a problem “over there”, but British overseas pensioners are citizens who have lived, worked and grown up here. They remain citizens here; they are constituents, and, with the changes to overseas voting rules in 2024, many are now registered to vote in United Kingdom elections again. That means there are up to half a million voices who feel forgotten, neglected and increasingly betrayed by successive Governments.
Geography should not be an excuse for a lack of morality. British overseas pensioners are making their voices heard; over 75% want their representative to commit to ending frozen pensions. In 2016, at an all-party roundtable event, the now Deputy Prime Minister called for a change on frozen pensions and a commitment to finding a solution. I am glad she did so then; I am concerned that the Government are not doing so now. I would be grateful if the Minister could confirm whether that is still the position of the Deputy Prime Minister, and indeed, the Government.
Since I first raised the issue in the House of Commons last year, I have read and heard many compelling stories—for example, that of Anne Puckridge. Now 100 years old, Anne remains an inspiration to all of us, having served in the Royal Navy, the Army and the Royal Air Force during world war two—I repeat: the Royal Navy, the Army and the Royal Air Force—serving six months in each branch. It is fair to state that she has paid her dues to this country. After the war, she lived and worked for the vast majority of her life in the United Kingdom, until she moved to Canada in 2001. She is one of around 60,000 veterans affected by the policy.
The emotional impact of the policy cannot be overstated. Many of those affected say that they were never informed that their pension would be frozen when they moved. Anne was not told, and the campaign reports that 86% of pensioners affected had no idea the policy even existed before they were impacted. That is too little, too late.
I congratulate the hon. Member on this timely debate. He just referred to a 100-year-old. Does he agree that the frozen pension issue is not just about the fact that people are seeing a relatively small pension compared with the one they would have had if they were still a UK resident? Because of the policy, in their final years of existence on this earth, they will have a paltry pension to pass away on.
I entirely agree with the hon. Member, and I will come on to some of that later. He is absolutely right that there is not just a severe financial impact, but a moral impact. Constituents of ours, who have paid their dues—and, in Anne’s case, more than paid their dues given what they have done for this country—will end their days on pretty much nothing when inflation is taken into account.
Last December, I challenged the Prime Minister during Prime Minister’s questions on his decision not to meet Anne during her visit to the UK—a visit that required an 8,500 mile round trip, which is no mean feat at the age of 99. She was not offered a meeting with the Prime Minister.
Anne’s story is sadly emblematic of a much wider injustice that continues to be perpetrated on our elderly. Only this year, we saw continued poor treatment through policies such as the removal of the winter fuel payment and the betrayal of the WASPI women, both causes that were vociferously supported by the Labour party in opposition. Labour is happy to freeze pensioners and happy to freeze their pensions.
The Prime Minister’s refusal to meet Anne is symbolic of a Government who are, I regret to say, unwilling to listen to some of the most elderly and vulnerable among us. That brings me to the crux of today’s debate: the Government do not seem willing to engage in any meaningful way with the overseas electorate affected by the policy. I remind hon. Members that 158 parliamentarians from across the UK and Canada wrote to the Government last October calling for an end to the policy, and more than 140,000 people signed Anne’s petition to meet the Prime Minister in December.
The most concerning aspect of the Government’s current line of response is the estimated cost of ending the policy altogether. Based on calculations made annually, the Government quote the figure of £950 million a year to uprate and backdate all pensions, but that is not the ask. The End Frozen Pensions campaign has made it abundantly clear that it is not calling for retrospective compensation. It is asking simply to receive the same annual increases going forward that are awarded to pensioners living here, and in the USA, France and a host of other countries.
It is a pleasure to serve under your chairship, Mr Dowd. I congratulate the hon. Member for Farnham and Bordon (Gregory Stafford) on securing this important debate on an issue that is often overlooked, as I think we would all agree. It is fair to say that successive Governments have ignored this issue for decades and, understandably, many UK citizens are unaware of what would happen to their state pension if they were to relocate to one of the countries affected by this regressive arrangement.
It seems completely arbitrary that someone could emigrate to America and continue to receive an annual uprating in their state pension, but not if they went to Canada. We have heard that the blight of frozen pensions affects nearly half a million British citizens living overseas, despite the fact that they paid national insurance contributions for much of their working lives.
The impact of this arrangement is absolutely shocking. We have already heard that four in 10 frozen pensioners report that they struggle to afford items such as food and fuel. In my view, our state pension system is already insufficient to meet the needs of millions of existing and future pensioners, but let us imagine how inadequate it would be if the pension failed to rise at least in line with inflation or earnings for more than 20 years of someone’s retirement.
Most pensioners in this position were never informed that their state pension would be frozen in this way. The scandal therefore has a number of parallels with those behind other campaigns, such as that affecting women born in the 1950s, who argue that they saw their state pension age increase without due notice.
Such measures only end up hurting the most vulnerable in our society. Taken alongside recent decisions to means-test the winter fuel allowance, which was mentioned earlier; the refusal to pay compensation to the WASPI women; and the proposed cuts to disability benefits, it could appear that the Government are trying to balance the country’s books on the back of some of the poorest members of our society.
My West Dunbartonshire constituent, Fraser, has now retired and lives in Australia. He is one of the half a million British citizens and voters now affected by this 70-year outdated and harsh practice. He is from my home town of Clydebank. He worked in the ordnance factory in Bishopton for decades, and then in the Govan shipyards. He paid his national insurance contributions for many years, but his pension is frozen. He tells me that every year it is getting harder and harder for him to make ends meet.
Does my hon. Friend agree that that is a scandalous injustice? We are not seeking a full backdating, but for the Government to introduce some form of yearly indexing to answer that injustice.
Yes, I wholeheartedly agree that now is the time to grasp an issue that successive Governments of all shades have failed to grasp. This is the Government’s chance to do something positive for older people by ending the injustice once and for all, and I urge them to do so.
It is a pleasure to serve under your chairship, Mr Dowd. I thank the hon. Member for Farnham and Bordon (Gregory Stafford) for introducing this debate and for putting his case so well on a subject that has been brought to the House’s attention on numerous occasions, both in Westminster Hall and in the main Chamber. There are several people in the Public Gallery today who have been involved in the campaign; we thank them for all their correspondence to ensure that we can follow the campaign on behalf of so many British people. Just last week, I was working on some cases in my office. These issues occur regularly, as the hon. Member for West Dunbartonshire (Douglas McAllister) said.
As we are all aware, the Government’s policy on freezing state pensions for British pensioners living overseas affects some half a million pensioners and is fundamentally unfair. I believe that it is morally unfair, because it penalises pensioners who have earned their state pension through decades of national insurance contributions. They have done the same as everybody else and have paid national insurance contributions and tax. They made a contribution to the society that they lived in. Today they are being penalised, and it is grossly unfair.
People who have worked for their entire life in United Kingdom of Great Britain and Northern Ireland are being denied the annual pension increases granted to UK residents simply because they chose to retire abroad, often to be closer to family. As they get older, they want to support their family, but their family also want to support them, so there is a physical necessity. People want to make the most of their savings elsewhere, as anyone is entitled to do. For example, a pensioner in Australia or Canada, where pensions are frozen, might receive some £7,000 annually, while UK-based pensioners get more than £11,000 annually as a result of triple-lock upgrading.
There is a real differential and a real problem to be addressed. Over time, inflation diminishes the value of frozen pensions, pushing some expat pensioners into poverty. That has an impact not just on them, but on the countries in which they now live. In extreme cases, pensioners have reported surviving on pensions worth less than £20 a week in real terms. Nobody could survive on that—it is impossible. We ask the Minister to give us some support and give us something to tell our constituents and their families.
Eleven years ago, my colleague Ian Blackford stood in pretty much this spot talking about exactly the same thing. Exactly the same arguments that were made during that debate could be made today. Things have not moved on. We are not in a better position. At that time, we were talking about 550,000 frozen pensions; now we are down to 500,000. People are dying before they receive their entitlements.
Pensions are a social contract. We pay our national insurance and our taxes into the system in the expectation and with the understanding that we will get something out of it when we become pensioners. This is not party political: it applies to all Governments over the last 70 years. No UK Government have been willing to fulfil the contract with pensioners who choose to live in a certain country. I do not think that that is fair. When we begin to pay taxes, we are not told that our pension entitlement will vary if we choose to live in one of these countries.
That they are overwhelmingly Commonwealth countries seems even more bizarre. We have a special relationship with the Commonwealth: for example, 12% of Canadians claim Scottish heritage and 14% claim English heritage. Scotland is a nation of emigrants as well as a nation of immigrants—not an island of strangers. It is a brilliant thing that we Scots are found all over the world. In a significant number of places, people with Aberdeen accents can be found speaking the Doric.
People should be allowed to go and live with their family in the expectation that the Government will continue to support them in older age, not pull the rug out from under them. They have paid into the system just the same as the people who choose to live here. In fact, as the hon. Member for Strangford (Jim Shannon) says, they are taking less out of the system than those who continue to live here. The cost-benefit analysis shows that people overseas are not using the NHS here on a regular basis. They are not getting the free prescriptions in Scotland. They are not getting prescriptions down here. They are not getting a free TV licence—well, nobody is getting a free TV licence. They are not getting the benefits that an older pensioner living in the UK would expect. They are not taking those things out of the system, yet the UK is still unwilling to uprate their pensions. They are going to live with their families, in a significant number of cases, and not getting their entitlements.
I congratulate my hon. Friend the Member for Farnham and Bordon (Gregory Stafford) on raising an issue that, quite simply, is a matter of national shame. I had the privilege of chairing the all-party parliamentary group on frozen British pensions for more years than I care to remember, and in that task I had the staunch support of Sir Peter Bottomley, Lord German and many others. We all regarded this as a non-partisan issue. It was quite simply a cross-party matter that had to be resolved.
In spite of the effort that we put into it over many years, successive Governments of all political persuasions have sheltered behind the myth that we uprate pensions only in countries with which we have a reciprocal arrangement. Historically, we have had a reciprocal arrangement with the United States but not with Canada. On one side of the Niagara Falls, people get their pension uprated; a couple of hundred yards across the river, people do not.
That is arrant nonsense, and it is unjust for all the reasons we have heard this morning. These are British citizens who paid their dues over their whole working lives before emigrating. They are as entitled to the full state pension as any other British citizen. John Markham, of blessed memory, led the campaign in Canada for many years. The irony is that, every time he came back for two weeks to make the case to whoever was in power, he would claim his two weeks’ uprated pension, because the moment he set foot on British soil, he was allowed to have it. Where is the sense in that?
The point has been made that pensioners in the majority of Commonwealth countries do not receive uprated pensions, but pensioners in the European Union do, because we reached a reciprocal arrangement when we left the European Union. I am delighted that expat UK citizens living throughout the European Union are getting their pension uprated. That is absolutely right—they have paid their way—but I fail to see why people living in what we proudly used to call the British Commonwealth do not get their money.
I am grateful for the opportunity to speak in this debate, Mr Dowd. I refer hon. Members to my entry in the Register of Members’ Financial Interests. I thank the hon. Member for Farnham and Bordon (Gregory Stafford) for securing this important debate.
Nearly half a million UK pensioners living overseas are being penalised, not because they did not pay into the system but because of where they now live. They are our citizens—our veterans, carers, former teachers and nurses. They worked all their lives, paid into the national insurance system and are now denied the annual uprating of their state pension. Their pensions have been frozen, sometimes for decades, based purely on whether the UK happens to have a reciprocal agreement with their country of residence. As we have heard, it cannot be fair that a pensioner in the US sees their pension rise each year, while a pensioner in Australia does not.
The Liberal Democrats have long campaigned for an end to that injustice. We have already heard about Lord German’s sterling work, and I would like to highlight the policy research by Liberal Democrats Overseas, which has proposed a fair and affordable five-year plan to restore full uprating, starting with those who have lost out the most. Campaigners acknowledge the cost of their demands, and are even willing to accept partial uprating as a first step. However, as we have heard, previous Governments have refused to act and, worse, have turned down repeated offers from countries such as Australia and Canada to negotiate new agreements. This Government can take a fairer approach.
It is interesting that the Welsh Affairs Committee is looking into how we can engage the Welsh diaspora in promoting brand Wales overseas. A new settlement for British pensioners living overseas strikes me as a good way to engage with the British diaspora, particularly as we strike new agreements with countries all over the world. We Liberal Democrats call on the Government to stop hiding behind outdated excuses and to start treating all UK pensioners with fairness and dignity.
People who receive a pension income have worked throughout their careers for that money, and they deserve to be able to access it fairly and with the proper information, lest we see a repeat of the WASPI scandal. Does my hon. Friend therefore agree that, for people receiving a UK pension, uprating should not be a lottery of land borders, and that His Majesty’s Government should redouble their efforts to find reciprocal arrangements with countries currently without an agreement with the UK?
David Lloyd George created the social contract on which our pension scheme still runs, and I am sure he would be proud to hear my hon. Friend calling for that social contract to be adhered to.
Several hon. Members have drawn attention to the fact that we now have many constituents living abroad who have the right to vote. To better represent their needs and make more progress, the Government might wish to consider the idea of overseas constituencies. That would give one or two hon. Members the opportunity to represent the needs of people living abroad who certainly warrant their full pensions.
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The cost of such a policy change is a mere £55 million a year—a fraction of the overall pensions budget. Will the Minister agree to meet the End Frozen Pensions campaign to accurately assess the cost of what is being requested by pensioners? Will he work with us, in good faith, to find a solution that reflects the modest and realistic nature of the appeal?
Beyond the severe individual hardships, there are important and growing geopolitical consequences to the point where the policy is now creating serious diplomatic tensions with some of our closest allies, as pensions are frozen in 50 out of the 56 Commonwealth nations. How can we speak proudly of our Commonwealth partnerships while refusing full pensions to veterans in the Falkland Islands, British-born nurses in Barbados or former civil servants in Canada? Those are countries with deep and historical ties to the UK, yet they are forced to subsidise our negligence.
Australia and Canada have made their frustrations clear. Canada has been formally requesting a resolution to the issue for more than 40 years. In October, 103 Canadian parliamentarians wrote to the Prime Minister urging him to address the issue. The Canadian and Australian Governments already provide full state pension increases to their citizens living in the UK. Meanwhile, they are left picking up the tab for British citizens residing in their countries.
With Canada and Australia having just held national elections, and with new trade discussions likely on the horizon, what assessment has the Minister made of the policy’s impact on our future ability to trade and meaningfully engage with those countries? Will he look at how reciprocal barriers to the policy may be overcome?
As I draw to a close, let me return to the heart of the matter. The policy causes financial hardship for a large number of affected elderly people. It also causes indignity and isolation; their repeated dismissal by the Government is leading to their political disenfranchisement. Putting an end to this blatant injustice is not only achievable but affordable—£55 million a year is not beyond our means. What is ultimately lacking is not money, but political will.
I have one practical ask of the Minister: will he meet campaigners to more fully understand their demands? If not to resolve the issue outright, will he at least commit to acknowledge the request for uprating on a going-forward basis only? Will he agree to work with me and campaigners to explore how, at a minimum, awareness of the policy might be improved, given the vast majority of impacted pensioners still report having no knowledge of the policy’s existence prior to moving overseas? All that those pensioners are asking for is a level playing field, so that those who have contributed can live out their retirement with dignity and security.
Although there will always be a cost to Government decisions, I ask the Minister to consider that beginning to uprate the frozen pensions at a future date would cost only around £55 million a year. Most commentators would understand that that is not beyond the realms of possibility. It would be a significant step not only in showing that the Government are on the side of older people who have made a contribution to our country, but in unravelling a long-standing anomaly that the public simply cannot understand.
Finally, the Government should also consider that with changes to the overseas voting rules, as was mentioned earlier, many of the UK pensioners affected by the frozen pension scandal are now in fact registered voters in the UK.
The freeze is fundamentally unjust. It penalises pensioners who have earned their state pension through decades of national insurance contributions. I think of Anne Puckridge, a 100-year-old world war two veteran who served in all three branches of our armed forces decoding messages during the war. After working in the UK until the age of 76, way beyond her pension years, and paying all her taxes and national insurance, she moved to Canada in 2001 to be near her daughter. Her daughter wanted her to be there, and she wanted to support her daughter. Her pension was frozen at £72.50 per week, rather than the £169.50 she would receive in the United Kingdom of Great Britain and Northern Ireland, which has resulted in an estimated loss of £60,000 over 23 years.
When Mrs Puckridge notified the Department for Work and Pensions of her move, she was not informed that her pension would be frozen. At no stage was it intimated to her, “Look, if you go there, this is going to happen.” Because of that false pretence—because it did not disclose the full facts of the case—I believe that the DWP stands accused in the moral court of law for how it treated this lady. She only discovered the situation when her first expected increase did not arrive. She stated:
“It’s the injustice of it that is so unfair, the fact that we were never warned.”
They were never told. That is disgraceful.
As other hon. Members have said, the widespread lack of transparency is reminiscent of the lack of transparency with WASPI women. The all-party parliamentary group on frozen British pensions has reported that nearly 90% of all affected pensioners were unaware of the policy before moving. Given that those half a million British pensioners have paid into the national insurance system throughout their working life, does the Minister consider it fair to deny them the annual pension increases that residents of the United Kingdom receive?
An especially important factor is that the affected pensioners are not adding to the pressures on public services such as the NHS on their retirement. When people get to 79 or 80, their impact on the national health service will be greater. They may have complex needs. Their age is agin them. Very clearly, their dependence on the NHS at that stage is much greater. If we take that out of the equation and they go to Canada, America or Australia, there is a real saving to the NHS. There will be no prescriptions either. I speak as someone who takes 14 tablets a day just to stay alive; most of them have to do with diabetes, but that is by the way. If someone is saving the NHS all that money, is only right that that be considered in the financial equation.
The findings in the 2020 inquiry report of the APPG on frozen British pensions indicate that the policy affects war veterans and even some members of the Windrush generation, who have returned to their country of birth but now face economic hardship as a result of this policy. The Windrush generation caught the imagination of this great nation. I became aware of their case through being an MP, and it is a really justifiable one. They are now being penalised if they decide to go back home to be close to their families, having come here, worked all their days and paid their national insurance contributions and taxes.
As the current policy is leaving expat British pensioners having to return to the UK, I ask again whether the Minister will conduct a cost-benefit analysis to assess whether ending the freeze might reduce long-term costs by preventing the need to repatriate. The cost factor is of such magnitude that a review might persuade the Government to ensure that expatriates get their pension.
The freeze is also morally indefensible. It punishes a perfectly valid legal choice to live abroad, and it ignores the contributions that these pensioners made to the economy and to our society. Many moved abroad with a reasonable expectation that their pension, a right earned through years of work, would retain its value. The arbitrary distinction between countries with and without an operating agreement lacks logics and smacks of red tape and bureaucracy gone mad: pensions increase in the US but not in Canada or Australia, for example. We always used to blame the EU for bureaucracy. We might blame it again, of course; later today I presume that we will have a statement in the Chamber on the UK-EU deal, so we will have a chance to go over the past once again.
I support the APPG’s recommendations. It is time to end the frozen pension policy and provide full uprated pensions to British expat pensioners as soon as possible. I believe that that stance is supported by evidence from the Governments of Australia and Canada, with which we have a good working relationship. Has the Minister had the opportunity to talk to the relevant Ministers in those Governments? It is not that they are telling the UK what to do, but I understand that they have suggested that we may need reform. If the Minister has had the opportunity to talk to them, what has come out of those talks?
It is unjust to penalise pensioners for living abroad when they have paid into the system like everyone else. By uprating pensioners globally, the UK would honour its moral and economic obligations and ensure that members of the post-war generation that rebuilt Britain can retire with the security that they deserve, wherever they choose to live. Today is an opportunity to make that request and that plea again, and to ask our new Minister to look at the issue in a positive way and consider all the cost factors. There are many things in the pot that should be looked at once again.
The Deputy Prime Minister previously said:
“The situation is unfair, illogical and doesn’t make sense.”
It has never been enough of a priority for any Government to sort out, but given the current Government’s electoral standing with some older people on the basis of WASPI and the winter fuel payment, it might be an idea to solve the situation now and gain back some of that capital.
A lady who lives in Canada is coming to visit Scotland in June and is going to pop into my office while she is here. She is from Aberdeen. She went to St Margaret’s school and her husband went to the school I went to; there is an annual music prize awarded in his honour. At the end of her email asking to come and see me, Maureen added something about frozen pensions:
“I believe the Prime Minister is not happy about us Canadians kicking up a fuss. We have been doing it for at least 15 years, but no one listens.”
That is the biggest injustice of all: the fact that we are not listening.
I am pleased that the hon. Member for Farnham and Bordon (Gregory Stafford) has secured this debate. Like many of us, he is standing on the shoulders of giants: the issue has been brought up for years and years, but we have never managed to make enough of an impact on the Government to get the change to happen and have them recognise that this is important. As several Members have said, now that we have had a change in the electoral rights of people overseas so that they are able to vote for longer, perhaps the Government will feel more under pressure. But it should not have taken that. It should have been understood that this was a moral decision. It does not matter where someone chooses to live out their twilight years; they should have the same entitlements as others who have paid the same amount over the years.
The hon. Member for West Dunbartonshire (Douglas McAllister) spoke about his constituent from Clydebank who worked in Govan. The country has been built—these islands have been built—on the hard work of these people throughout our manufacturing history. Anne Puckridge, who is an unbelievable human being, was in the RAF and made a huge input to our prosperity and the safety and security of these islands. We are paying these people back by saying, “Nah, you’ve paid the same as everybody else, but you’ve chosen to live in a different postcode, so we’re not paying it.” This is an injustice that needs fixed.
I know that I have managed to speak for seven minutes, but actually it is pretty difficult to stretch this out. All there is to say is, “This needs sorted. Please could you sort it?” That is the passionate case that we are all making on behalf of our constituents and those who might choose to move to other countries in future. We do not want them to have to ask, “Do I want to live in Canada where my daughter lives? Do I want to live somewhere else, or do I have to stay here because I cannot get my pension uprated?”
I am not asking for a full commitment on any of this. I am not asking for all the backdated stuff. I am not asking for a commitment for every single individual. I understand that some international agreements may have to be made to make some of this happen. But I want the Government to say, “We recognise that this is a priority for people and that there is an unfairness in the system. We will look at doing what we can to ensure that people, no matter where they choose to live, get the pensions that they are entitled to.”
What about those living in Australia? What about people like Norma Maloney in South Africa or the greatly revered Anne Puckridge, who I have been privileged to meet on many occasions, in Canada? Why do they not get their money? The answer is quite simple: it comes down to the Treasury solicitors, who have historically been absolutely terrified that, if we give an inch, somebody will try to bring a class action to get a backdated pension, and of course those sums would be astronomical.
When Sir Oliver Letwin was in the Cabinet Office, he made the eminently workable proposal that we should uprate whatever pension the recipient was getting at the time of the uprating. Anne Puckridge would get the triple-locked increase on her fairly pitiful pension, not on anything retrospective. That is not what the expats ought to be receiving or what they are entitled to, morally, but it would work, because over time—by attrition, as people fall off the perch—we would reach the parity we ought to have today.
I was as critical of the previous Government as I am of the current one. They are sheltering behind a Treasury lawyers’ position that is wholly untenable and, I believe, patently dishonest. These elderly people—and I speak as an elderly person—have paid their way. They are entitled to their money. They should have it, and the Government must do something about it now.