Would it be better than frozen though? Frozen pensioners might nod their heads.
fact is? It should not have been either! Particularly as you paid for it!
The on going campaign against the UK Pension
is not getting us anywhere! PARITY-WARRIORS WILL FIGHT ON !
we shall return,.
British Pensions in Australia Inc
ABN 42 186 383 389
P O Box 474 Edgecliff NSW 2027
Telephone +61 2 9521 7964 email: bpia@people.net.au
BPiA’s submission to the UK Parliamentary Pension Working Party
BPiA’s submission will focus on the aspect of the UK pension bill, with which we are most interested, that is Clause 20. This Clause purports to retain the existing discredited system whereby the State pension is not uprated each year for some recipients of a UK pension who are resident in some but not all countries overseas. They discover their UK pension, for which they have paid under exactly the same contribution rules as other retirees in the UK or some specified countries, is “frozen” because of the country to which they have migrated and retired.
We gather the Parliamentary Working Party has decided to not consider this issue in its pre legislation scrutiny, but we protest this is a significant matter, for it affects over half a million recipients of the UK pension and potentially thousands more who are either now approaching pension age or discouraged from leaving the UK to migrate to a country where the UK State pension is frozen. It is because of this that the issue requires a decision.
In that regard we wish to direct the Working Party [WP] to the conclusions of the 1996/7 Parliamentary Select Committee which considered the specific issue of frozen pensions. In their concluding paragraphs this select committee made some telling comments.
As Lord Carswell opined in the Lords hearing of the Carson v the UK Government case 2005 “there is no justification for paying some [expats] less than others.” “The government may have been entitled under domestic law to take this course [of denying uprating to some expats abroad] if it so chose, but I consider the Convention [of Human Rights] operates to prevent such discrimination” He “declared that Regulation3 of the Social Security Benefits Uprating Regulations is unlawful and of no effect as being incompatible with Mrs Carson’s Convention rights.”
This dissenting opinion of Lord Carswell is supported by the words of Home Secretary, Jack Straw speaking on 2 October 2000 at St Pauls Cathedral, when he spoke on the subject of “Human Rights and Personal Responsibility” with regard to the UK’s new Human Rights Act which had recently been introduced in the UK Parliament. “A modern civil society is based on basic values of individual worth and equality of opportunity for all …under the Human Rights Act everyone gets the same basic guarantees from our public services whoever we are and wherever we live.” “Courts do get strong powers to give legislation a meaning that fitswith ECHR rights wherever possible. And there is also the power to declare primary legislation incompatible with Convention rights.”
At this stage we should consider Article 14 of the Human Rights Convention headed “Prohibition of Discrimination” “The enjoyment of rights and freedoms set forth in this Convention shall secure without discrimination on any grounds such as sex, race, colour, religion, property, birth or other status.”
We at BPiA understand the concept of the Rule of Law and we are aware that frozen pensions arise because of the passing each year of “Regulation 3 of the Social Security Benefits uprating Regulations” which regulates to ensure that those expats retired in certain countries are denied their pensions to be uprated annually. However as Lord Carswell shows and which Home Secretary Jack Straw’s speech supports, this Regulation 3 is unlawful and the Court has powers to declare primary legislation incompatible with Convention rights.
So Regulation 3, which denies pensioners who have retired to some countries where there is no bilateral agreement, having their pensions uprated annually. It is the regulation which Lord Carswell considers unlawful, for it is, in his opinion, incompatible with the Human Rights Conventions and which The Home Secretary implies is superior law. These rights are based on basic values of equality of opportunity for all.
Equality
Moreover the UK now has an Equality Act 2010 which is violated by the Government’s Regulation 3 by not treating fairly and equally all pensioners irrespective of where they are retired.
Then this Regulation 3 is part of the “Persons Abroad Regulations” of which 3 Lords Justice, Rix, Clarke of Stone-cum-Ebony and Carnwarth opined, its drafting is lamentable, it lacks clarity and it’s draconian. These opinions are include in the conclusion to the case “The Secretary of State for Work and Pensions and Yates on May 13th 2009 in the Supreme Court of Judicature” The State lost this case.
The CHOGM Singapore Declaration 1971 at section 8 states, “We [all the Commonwealth nations] will use all our efforts to foster human equality and dignity everywhere”. Why one asks then, is this call at a CHOGM to foster equality everywhere not applied by the British Government, to the payment of pensions even if only throughout the whole Commonwealth? Surely Britain is the supposed leading light in the Commonwealth? UK pension recipients in some Commonwealth nations have their pensions uprated, why no equality for all. These nations include Mauritius, Cyprus, Malta, Jamaica, Barbados and Britain but not in the others. Not in Trinidad, nor St Kitts, St Vincent, Antigua, Guyana Grenada etc in the Caribbean. This practice is therefore also in violation of this CHOGM declaration. How can the British Government hold its head high in partnership at CHOGM with the other Commonwealth nations when it violates this Commonwealth Declaration which was later confirmed in Harare in 1991? Are some expats therefore “more equal than others?”
Fairness
Now we come to the issue of fairness. Fairness is used by politicians throughout the world it appears, almost without any thought given to what they are actually saying. They all seem to delight in telling us they are fair in all they do. For example:-
Notwithstanding hearing or reading all these platitudes of fairness being uttered and supposedly fairness is at the heart of British politics, how can the 550,000 expats whose pensions are frozen, ever believe what politicians say?
Cost
Time and again we have been told by DWP the pension is not uprated in some countries because of the cost.
Moreover from the UK Parliament’s Select Committee report 1996/7 Given the perennial constraints on public expenditure it is hard to identify a single compromise which would substantially meet the expatriate pensioners’ case at a reasonable cost”. This was at a time when there was not an austerity programme in place.
The answer to this comment is dealt with in the last paragraph of this section. Do not think of pensions alone, identify the adverse consequences of this unfair pension payment policy and consider the thousands of pensioners who are discouraged from leaving the UK, which, if reversed, would be to the overall UK budget’s considerable benefit!
We agree the annual cost of indexing all State pensions is estimated at over £650 million in 2012/3, but we are not looking for any retrospective adjustments, only to have our pensions paid from now on as they would be if we lived in an uprated nation, like the US, Spain, Eire, Israel, Barbados, the Philippines, or Poland.
Putting this annual amount into perspective, it represents about just 0.7% of the pension budget; shrapnel! The NI Account has a balance of £30+ billions. This is more than double the prudential balance of 1/6th of the annual expenditure on State pensions, which the Government Actuary says is required. The Government Actuary’s 2013 report conclusion is;-
Moreover there are adverse consequences which occur as a result of non-uprating the pension. These adverse consequences can be explained by the following: Many thousands of people would be delighted to retire abroad, often to return to their homelands or to join their younger families overseas but they are discouraged from making this move because their UK State pension is a significant part of their annual retirement income. This applies in particular to the lower paid people; - viz-
but perhaps not to “the rich” who it seems are the ones being targeted by some MP’s via this non uprating practice.
Should the pension policy change and all pensions be uprated, irrespective of the country to which the recipient retires, it is forecast, from a recent survey conducted by AGEUK, that gradually thousands more pensioners, who under the current restrictive rules have stayed in the UK, would most likely leave Britain. They would therefore no longer impose on the National Health Service nor take advantage of pensioners’ free prescriptions as well as free TV licences for the over 75’s, free bus passes and winter power subsidies, all of which are paid for, not from the NI account, but from general tax revenue. This considerable expense would no longer be required. These net savings, less tax revenue lost, to the British Treasury and taxpayers, are reckoned to grow towards £5-10 billions over the forthcoming decade or so. Such savings will make a big dent in the National Debt and should be seriously considered as part of the question, whether to change the pension payment policy or not. This is a much bigger issue than just that of the annual cost of uprating all pension payments. The Government would be making a big mistake to ignore this issue, instead just “ring-fencing” the pension budget A study and report on this matter has been conducted by Oxford Economics and presented to Treasury in the past 12 months.
Finally, in regard to cost, the decision in a recent, February 2013, UK Supreme Court case, O’Brien [Appellant] v Ministry of Justice 2013 UKSC 6, it was clearly stated by the judge, “budgetary considerations [costs] cannot justify discrimination”: O’Brien’s appeal against his claimed discrimination was upheld and yet each year, through the Social Security Benefits Uprating Regulation 3, the British Parliament annually legalises discrimination against 550,000 of its pensioners, justifying this action by a saving of some costs.
Morality
During a Committee debate on March 18th 2004 on the frozen pension issue, Steve Webb, the current UK Pensions Minister made several comments, which indicated his support for uprating the pensions of all expats. He was at the time obviously concerned with, among other things, the morality of non-indexing. An edited version of some of his comments during that debate are shown below;-
Many Members of Parliament over the past 20 years have expressed similar views but these appear to have been scotched by Treasury bent on austerity and in denial of the harm the Government’s approach is doing to the reputation of Britain as a forward thinking moral, fair minded society.
To concludeI wish to quote from Dame Joan Bakewell after the ECHR case Carson v the UK Government was announced;-
Yours Sincerely
James Tilley BA [Hons]. FCPA. ACMA.
Honorary Chairman
British Pensions in Australia Incorporated, Phone +61 2 9521 7964