Mr.
Laws: As usual, I am getting conflicting messages from
different parts of the Committee.The hon. Gentleman is
constantly trying to terminate my speeches early, while the hon. Member
for Northampton, North is egging me
on.
Ms
Keeble: Will the hon. Gentleman give
way?
Mr.
Laws: I shall just clarify one point. The hon. Gentleman
will be delighted to know that I am coming to the end of section 3 of
my speech, which is about why the existing system is unfair, and
reaching the large and extensive section 4. I suspect that he has been
looking over my shoulder and spotted that I am coming on to how we deal
with the financial issues. He will be reassured by that. But first I
shall give way to the hon. Lady, who is urging me
on.
Ms
Keeble: On the subject of higher plains, airports are the
main thing that the overseas territories need, so the hon.
Gentleman’s talk of expatriates’ pensions is obscuring
the issue. He must stick to the relevant
areas.
Mr.
Laws: As ever, the hon. Lady is trying to outspend me in
commitments to build airports. All I am asking is that some 572
pensioners get their uprating. I hope that that was a probing
suggestion that she
made. I have a final
serious point to make about unfairness before I move on to the
substantial section of my speech dealing with finances. My noble
Friend
Lord Jones referred to the possibility that in future, some people in
this country who are at or just over the conventional retirement age
might want to move to other countries, perhaps to do voluntary work or
to use their skills in the developing world. He spoke about people with
medical expertise wanting to go to Botswana to help deal with the
HIV/AIDS pandemic. Some overseas Governments want people from the
United Kingdom with such skills to settle in their countries and to
help. Does it make
sense that we should prevent people from exercising their own free
choice—this is why Ifeel passionately about the
issue—by penalising or rewarding them financially for choosing a
particular country? Whether people like it or not, we live in a world
in which it is easy for people to move to different countries, take
advantage of our fantastic planet and not to get stuck in one place.
Governments have no right to impede people’s free decisions to
live where they
like. Mr.
Adrian Bailey (West Bromwich, West) (Lab/Co-op): I
listened with interest to the hon. Gentleman’s summary of the
speech made by the noble Lord Jones. Did Lord Jones indicate in his
speech whether he might come under any of the categories outlined by
the hon.
Gentleman?
Mr.
Laws: No, and neither would I make plans, even under a
Conservative Government, to flee abroad at the first possibility,
although I do not rule out such things. However, I would want Lord
Jones and the hon. Gentleman to be absolutely free to make such
decisions and not to feel that the choice of where they spend their
long retirement or dying days—however the period is
described—is being determined by politicians selecting
particular countries as worthy of being dealt with
differently. I turn
now to finances, which I am being urged to come on to.
[Interruption.] The hon. Member for Weston-super-Mare will be
reassured to know that this will be the final stage of the
introduction. Ministers have admitted that the existing arrangements
are illogical. I am not singling out the Minister here: I think that
both Government and Conservative Front Benchers have pointed out the
large costs involved in tackling the issue. Of course, such things must
be taken extremely seriously. However, when Ministers talk about the
cost, they do so in terms that are designed not to solve the problem,
but to block serious consideration of it. The figure that they start
bandying around—I shall save the Minister some
time—is£3 billion, which they say would be the
cost of implementing the reform in its most ambitious terms. I use the
figures that relate to the prices link; only recently did we establish
what the Government intend to do on earnings, and we will need those
figures to be
uprated. I am happy to
take an intervention if I am wrong, but I understand that the £3
billion figure is the cost not only of moving from a frozen pension to
a prices uprated pension for future upratings and future pensioners,
but of doing that for all pensioners who now live abroad—even
those who moved abroad 30 or 40 years ago. The figure represents the
cost of bringing their existing pensions up to the same level as in the
United Kingdom. Moreover, it also includes the cost of compensating
them—the Minister must let me know if I am wrong—for all
the money that they did not receive over the past 10, 20, 30 or 40
years as a consequence of their pensions not being uprated. No one, not even the hon.
Member for Northampton, North, with her generous probing amendments,
seriously suggests that we should go back and tell a pensioner who
moved to Australia in 1960—I do not know whether they would
still be alive—not only that we will bring their pension up to
the current level, but that we will refund all the money that
wasnot paid right back to 1960. That would be
absurd.Not even the most enthusiastic pensioner groups
realistically expect that to be delivered. Can we therefore put the
£3 billion to one side, and acknowledge that no one is asking
for all those missing payments to be
made? I remind the
Committee that, in an excellent contribution to an earlier debate, the
hon. Member for Worthing, West said that it is worth bearing in mind
what that £3 billion means. It is the money that we have saved
by not paying those pensions to people who have moved abroad. That
emphasises the fact that it is money that has been lost to those
pensioners; it is not remotely what it would cost to make a sensible
forward-looking change.
The other cost that Ministers
give is more sensible; it is for the more plausible policy that the
overseas pensioner groups are pressing for. That policy would be to
have upratings hereon, using the retail prices index or whichever
measure is being used for pensions in the United Kingdom, and
presumably to bring the pensions up to the existing UK level. Instead
of rebating people for the 20 or 30 years during which they received
low pensions, we would bring their pensions up to the existing basic
state pension level and index it. The Government have given figures for
that over the years of about £400 million per annum. That is not
an immodest sum, given how much the Chancellor of the Exchequer plays
with each year in his Budget, although I note that he always seems to
find another £400 million or £500 million for odd
gimmicks, particularly before general
elections. That is one
option, although I do not think that it would find favour with any of
the three main parties in the House, as I have not only said in earlier
debates, but stated straightforwardly to the overseas pensioner groups
that have come to see me and will also have seen the hon. Member for
Eastbourne and others. Given all the other public expenditure
priorities, no Government would be willing to bring up to the level of
the basic state pension the pensions of those who knowingly moved
abroad under such circumstances a number of years
ago.
10.15
am We must look
for a solution that deals with unfairness in a way that is financially
manageable. In the light of the amount of time left, I will save my
speech about costs until the earnings uprating discussion, as that may
be a more suitable time for such remarks. Nevertheless, in terms of any
changes made to the Bill, we need something that is sensible and
affordable, and I assure the Minister that at thegeneral
election we will propose a better deal for pensioners—in
contrast to the Labour party and to the Conservatives, who seem to be
promising not to pay out any
more. Mark
Pritchard: Will the hon. Gentleman give
way?
Mr.
Laws: No, I will finish this section and then give
way. In addition, we
will state in clear terms what our pension promises are, how we will
deliver them, how the costings will work and how we will pay for them,
in the same way as we do for all our manifesto. The Minister can then
comment on that. Let
me make a suggestion to the Minister on what the Government should be
looking at in relation to earnings uprating. The hon. Member for
South-West Bedfordshire proposed a new clause the other day that
highlighted a particular problem and talked about the types of changes
that might be sensible and affordable, although he did so in
particularly rigorous terms, so as to meet the constraints of the
shadow Chancellor by making his figure a zero sum. My proposal would
bring the costs down massively from the figures of £3 billion
and £400 million.
I would start to uprate
pensions from where we are now. Of course, the cost would grow over
time; the cost of all Government expenditure grows over time, as does
the tax revenue, which grows at the rate of earnings, as the Minister
well knows. That cost would be much lower, however, at about £15
million or£20 million, on the basis of a prices link in
the first year. Obviously, the cost would grow after that and would be
significant in 10 or 20 years’ time, but the figure of
£15 million or £20 million is much more manageable. My
proposal would be fairer to pensioners who move abroad from now, and
would in a small way ameliorate the situation for existing
pensions. I apologise
for taking up so much time, but this is an important issue. I hope that
the ministerial responses will not be based on the assumption that we
are proposing all sorts of things that are totally uncosted and
unmanageable. Instead, please may we have the assumption that there is
unfairness and that we should all think about how any party might
introduce affordable solutions? Can we please think about the issue in
terms of the problem that is now emerging as a consequence of the
Government’s plan to earnings uprate some countries and not
others? That will mean the gap between people in different countries
and their sense of injustice will grow even more rapidly.
I do not see how Governments of
any party can ignore that injustice for ever. If the Minister said,
“Yes, I accept that. We will look at the possibilities of doing
something about it, although we may phase the process over years and
years to make it affordable”, at least we would be finding some
way out of a problem that we have been trapped in for 44 years. It is
depressing that there is a sense from the Government that this is an
illogical situation and that nobody is willing to think of any way out
of it. If all that
the Minister was willing to say today—this would be a very big
step in Government policy, so he will probably not say it, much though
I would like him
to do so—was that he would ask Lord Turner or another suitable
person to look at the issue and propose an affordable solution, it
would be a positive development. He could report back in a
year’s time if that was necessary, but if he would only be
willing to look for a solution that would deal with this injustice, I
would be enormously relieved and gratified. There is a social injustice
here and we have to think of affordable ways of correcting it.
Sometimes, fairness has a price, and I hope that the Minister will
explain how he intends to end the existing unfairness and how the
Government could think about paying the price in a way that would not
impose an unacceptable
burden.
Mr.
Waterson: I am grateful to the hon. Member for Yeovil for
engineering this debate within the confines of the Bill. The issue is
important and deserved the exhaustive examination that he gave it. I
was interested to see that he seems to be suffering from a fit of
financial continence today, compared with the first sitting of the
Committee. I wonder whether that has anything to do with the brief chat
that I had at a reception last night with his hon. Friend the Member
for Twickenham (Dr. Cable), who seemed a little taken aback at what I
had to say about Liberal Democrat spending
commitments.
Mr.
Laws: I hope that the hon. Gentleman will accept that
there is not a lettuce leaf between me and my hon. Friend the Member
for Twickenham, who not only fully agrees with all our proposals on
pensions but—I should make this clear—reports back
everything that he learns from the hon.
Gentleman.
Mr.
Waterson: All I can say is that in an admittedly
brief conversation, the hon. Member for Twickenham did growl at me that
what I mentioned were not spending commitments. However, one
man’s spending commitment is— [Interruption.] Yes,
it is another man’s probing amendment—or another
lady’s. I have to say that, in my years of serving on Standing
Committees, I do not think that I have ever come across a probing
amendment that cost £14 billion, but who knows? Perhaps there is
one lurking out
there. This important
issue is also a long-standing one. It certainly bubbled to the surface
of my mailbag quite rapidly when I was first elected in 1992. The hon.
Member for Yeovil described how it had begun to build since the 1960s.
I pay tribute to John Markham, who I think has met all the Front
Benchers now. He is a powerful advocate for Canadian residents in the
situation described and he speaks for the Canadian Alliance of British
Pensioners. We have
already seen the figures. Roughly 1 million UK pensioners live abroad,
although that figure is going up all the time, and about half get the
uprating and half do not. I recently tabled a series of questions on
the issue, and the hon. Gentleman was good enough to quote from the
answers to one or two of them. He set out in more detail than I intend
to do the vast list of countries where the uprating does not take
place. Numerically, we are talking mostly about Australia—the
latest figures that I have show that there are about 220,000 such
people there—Canada, where there are 142,000, and South Africa,
which I think has the third highest number, with nearly
35,000. However, the
schedule to the relevant answer lists many countries where the uprating
does not take place. As the hon. Gentleman said, it depends on
countries being in the European economic area—Switzerland is
also included, interestingly—and on reciprocal social security
agreements. I was slightly surprised that in his otherwise exhaustive
commentary, he did not go into the issue of reciprocity in great
detail, but perhaps I will at least have something new to say on the
subject in this
debate.
Mr.
Laws: I was leaving it for the hon.
Gentleman.
Mr.
Waterson: I am most obliged. We have reciprocal agreements
with a strange collection—I was about to say
“bizarre”, but I do not want to start an international
incident—of countries. It includes Barbados, which sounds fairly
straightforward. My father retired to Barbados, although I do not think
that he ever mentioned this issue to me. The list also includes Bosnia
and Herzegovina. I imagine that some people retire there, but one
wonders why. Turkey is also included, and of course the
USA. Perhaps the most
dramatic contrast is between people living in Canada and people living
in the USA. I have already explained how an ageing rock star can go and
live in a large mansion in Florida and get their retirement pension
uprated—no doubt helping to defray the costs of the Prime
Minister and his lady wife staying for weeks on end—but if they
lived in Canada, that would not be the case. As the hon. Gentleman
said, if they lived in
various— It
being twenty-five minutes past Ten o’clock, The
Chairman adjourned the Committee without Question put,
pursuant to the Standing
Order. Adjourned
till this day at half-past One
o’clock.
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