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Baroness Seear: My Lords, I should like briefly to support the amendment so ably moved by the noble Lord, Lord Stallard. It is quite an irrational position. The burden is on the Government to establish why there is any justification for a pensioner who is in exactly the same position in every other respect who lives one side of the American border receiving an increase in his pension while another person, who is in all ways identical, but lives on the Canadian side, does not. It is an irrationality which surely demands an explanation.

The only explanation that I have heard so far from the Government Benches is that it would cost a little more money. Well, that is at least an argument—if you accept it. However, it does not meet any of the other

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arguments about the irrationality and the injustice of dealing with the matter in such a way. The noble Lord, Lord Stallard, has put forward his proposition in a form which surely makes it easy for the Minister to accept. It does not commit the Minister to anything: it would merely provide the House with more information with the prospect, on the basis of that information, that we could then go ahead to reach a logical and justifiable settlement for what has been a nagging problem for a great many years.

Baroness Turner of Camden: My Lords, this amendment is different from the previous amendments on the same subject in that it recognises to some extent the force of the Government's argument that, where pension increases are paid, reciprocal agreements exist. One hopes that the report envisaged in the amendment will give further impetus to the search for reciprocal agreements. If they really could not be obtained, the fallback position would apply which would mean that the position of these pensioners would then be safeguarded in the way that my noble friend suggests. It seems to me that this different approach warrants a rather different response from the Government. On that basis, we on this side of the House on the Front Bench support the amendment.

Lord Shaughnessy: My Lords, I hope I may join in the discussion for a moment. As a Canadian it seems to me an affront to those who live in Canada as expatriate British citizens that they have been discriminated against in this way for so long. It is not a happy situation since outside the old Commonwealth a citizen of Windsor, Ontario gets a pension of something like £10 a week, while another British expatriate citizen in Detroit gets a pension of £95 a week. There must be something wrong with that.

Lord Mackay of Ardbrecknish: My Lords, your Lordships will, I am sure, recall the comprehensive and thorough debate in Committee on Amendment No. 183 which sought to entitle pensioners abroad to the same amount of retirement pension as if they had resided in Great Britain. The noble Lord, Lord Stallard, put his measure to the vote on that occasion and he did not win. I must congratulate him on the ingenious device he has deployed to return to the subject at Report stage. However, no amount of dressing-up can get away from the simple fact —which I put before the Chamber at Committee stage—that the cost of this proposal is £235 million, which is a £¼ billion, give or take a few million.

I am not in the least surprised that the noble Baroness, Lady Seear, on behalf of the Liberal Democrats, can happily clock up another £¼ billion. I must put her on my list of people whose expenditure commitments I add up as we go through the days and weeks. A quarter of a billion pounds is a lot of money. I believe I detected the noble Baroness, Lady Turner, adding the Labour Party's voice to the expenditure of £¼ billion. On a very quick estimation, that makes a promise of enormous extra expenditure by the next Labour Government, if we ever have one. However, I believe the greater the expenditure that party promises, the more the electorate might see through the new Labour Party. I have now

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reached an expenditure figure of £335 million for the day so far, and I still have a little calculation to make as regards one of the Divisions.

However, I thought we agreed in Committee on my proposition, which is as follows. If I had £¼ billion more from the Treasury to spend, I am sorry to inform the noble Lord, Lord Stallard, that I could find many other cases in the social security field which I consider would have a greater priority on the British taxpayers' money than the one we have before us, however it is disguised. I see the noble Lord, Lord Monkswell, rising. He wishes to add more money to these promises. I am happy to give way.

Lord Monkswell: My Lords, far from seeking to add money to the noble Lord's calculations, I wish to ask him a question. Is the calculation which he or his department has made in terms of the cost of this amendment a gross or a net figure? Is the saving in terms of, for example, expenditure on the National Health Service that would be incurred if these people were resident in this country included in the equation? What estimate have the Government made of the net effect of this proposal in years to come? I use the example of someone who retires in the next year or two. He may decide either to stay in this country or to go abroad. If the pension continues to be paid and is uprated in line with the UK figures, that pensioner will cause a drain on the Exchequer in a number of other areas apart from pensions. But if that pensioner is abroad, that drain, particularly in terms of the National Health Service, will not exist. The fundamental question concerns whether the Minister is talking about gross figures or net figures.

8.45 p.m.

Lord Mackay of Ardbrecknish: My Lords, as I think I explained at the Committee stage, I am talking about gross figures because it is very difficult to subtract the figure the noble Lord mentioned. But before he thinks he has scored a bull point, he must remember that, if he is looking for net figures, he also has to take account of the tax which these people are no longer paying to the British Exchequer as British taxpayers, but which they are paying in Australia, New Zealand or wherever else they live. Therefore I do not think he has scored too great a point. I say that just in case he thinks he has scored a point. The simple fact of the matter is that the provision would add £¼ billion to the pensions bill in this country. I reiterate that I believe that in the unlikely event of Treasury staff phoning me tomorrow morning and offering me an extra £¼ billion to spend, I would have far better causes inside the social security budget in this country on which to spend that money rather than go down the road we are discussing.

I turn to the amendment before us. The numbers of people receiving frozen pensions are well known. We also know their ages. However, the noble Lord seeks to place an impossible burden on the Secretary of State in asking him to report on their economic circumstances. The following statistics make it abundantly clear why that would simply not be possible. We pay our pensions at frozen rates to some 400,000 people in almost 150

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countries worldwide. It is simply not possible to hazard a guess at the economic circumstances of people with widely varying amounts of British pensions, to say nothing of their other income, living in countries such as, not only Australia and Canada, but also Pakistan, Kenya, Brazil or even Saudi Arabia.

It would also be impracticable to attempt to prepare a report on the implications for these pensioners if the United Kingdom were to establish reciprocal agreements on pensions and other benefits with the governments of the countries where our pensioners live. It would not be possible to conclude such arrangements with the many countries which do not have a social security system with which to reciprocate. Other systems may be so different as to make reciprocity impracticable, while others may have a very limited range of benefits. Some countries may simply be unwilling to negotiate with the United Kingdom. In short, the duty which the noble Lord seeks to place on my right honourable friend the Secretary of State is neither reasonable nor practicable.

The noble Lord seeks to impose a further duty on both Houses to reconsider the whole question of frozen pensions again in the light of the report. That would not be possible, of course, if no such report is published because a meaningful report would be impossible to produce. Furthermore, this House has already rejected an amendment to unfreeze pensions. If a similar amendment were to meet the same fate in the other place, it would be totally unreasonable to expect both Houses to revisit the issue as soon as within 12 months from when this Bill is passed.

We discussed this matter at some length in Committee. The Chamber came to a conclusion. I congratulate the noble Lord on the ingenious way in which he has returned to this issue, but I believe that the suggestion he has made about a report is totally impracticable. It is, of course, simply a vehicle to allow the subject to be aired again—I am well aware of that—but I think the important point is the matter of principle that I have mentioned, the sum of money involved and the other ways in which we could use that amount of money if we were to take it from the British taxpayer. I could go on about the need to control our social security budget for the benefit of all taxpayers and of our economy, but I shall spare the House and the noble Lord a lecture on that particular subject—

Noble Lords: Oh!

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