Clause 5
Pensions Bill
10:00 am
David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)
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.
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.