House of Commons 1996/7 Select Committee's Report

Conclusion

38. Surely no one would have deliberately designed a policy of paying pensions to people living abroad intending to end up in the position we are at today. We have essentially four groups of overseas countries: the European Economic Area, where European law requires equal treatment with pensioners living in the UK,` other countries where bilateral agreements have been made which provide for uprating, three Old Commonwealth countries where bilateral agreements were made before indexation was taken into account, and the rest of the world. While the Governments of Australia and Canada have expressed their concerns over the lack of upratings for pensioners, the position of most British pensioners in those countries (and in New Zealand) is protected by their social security systems and the bilateral agreements with the United Kingdom. It is impossible to discern any pattern behind the selection of countries with whom bilateral agreements have been made providing for uprating.

39. It would clearly be impractical to negotiate individual bilateral agreements with each of the other countries in the world where people draw British state retirement pensions, and in any case unnecessary; a simple change in British law could enable upratings to be paid in any or all overseas countries,` provided that the political will was there to do so. The allocation of scarce resources and the language of priorities are what politics and government are all about. It is not a question of first reaching a moral judgement about the rights and wrongs of the expatriates' case, and then deciding whether or not this country can afford to do anything about it. The decision about whether public expenditure on state retirement pensions should be increased in future by paying uprating increases which are not required by law at the moment is a political question which -includes, but is not distinct from, the moral question. Ultimately, it must be for the House to decide, and that is our concluding recommendation: That there should be a free vote at prime time to allow Members to express their opinion on the principle of whether the Government should pay upratings to some or all of those pensioners living in countries where upratings are not paid at present.