Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

Today I wish to raise an issue of great injustice that affects a number of people who live in the electorate of Cowan. There are around 555,000 British pensioners worldwide, half of whom live in Australia, whose British pensions are frozen. Throughout their working lives these people paid into the compulsory national insurance pension scheme. They served in Britain's armed forces during World War II, risking their lives to protect and provide security for their government, for their country and for its citizens. In return they hoped only to be entitled to secure support in their retirement when they were no longer able to provide for themselves. The injustice of which I speak is of course the policy introduced in the mid-1940s by the Attlee socialist government and continued by successive British governments. These pensions are frozen and were not indexed when these Britons left the UK to spend their retirement elsewhere. Often the reason for their relocation was to join their children, grandchildren and other immediate family. Incredibly, the policy lacks equality; it is selective and it is discriminatory towards those living in countries such as Australia as opposed to those who moved to the EU, the United States and other nations where British pensions are indexed.

In Australia 190,000 British pensioners who are permanent residents here receive a means-tested Australian age pension to top up their unindexed British pension at an additional cost of $100 million a year to Australian taxpayers. This would not be required if the British government applied the same indexation that it has in place for Europe and the United States. The British pension is permanently frozen at the date when a person retires, or arrives in Australia; it will never be increased by the British government. This means Australia is required to increase its own rates according to the cost of living, which is affected by not only domestic factors but also international factors.

Of the approximately 250,000 British age pensioners in Australia, some 190,000 are permanent residents and therefore able to access Australian support. This means that more than 60,000 British citizens who are not permanent residents in Australia are not able to receive any support at all and are left with the feeling of belonging nowhere. The lower value of the pound and the constantly increasing cost of living, all without indexation, means that around 60,000 British pensioners are struggling, with many in dire straits. This was made clear to me when I met with British pensioner Shirley De Andrade, who talked of others whose children in Australia are obliged to help pay for their medical and pharmaceutical costs. This represents the real human outcome that the British government's policy has on families in Australia and it is an absolute outrage. I also take this opportunity to thank Don and Erica Beach for raising this issue with me, as well as those other constituents who have brought this significant problem to my attention in the past.

It is true to say that there is very broad, if not unanimous, support in the Australian parliament for a change to the policy of the United Kingdom. Unfortunately, none of the comments or requests had positive outcomes in the past. Recently an argument was put forward stating that the United Kingdom cannot afford to fund a re-indexation of the frozen pensions. We know, however, that even in the past there was no attempt to do the right thing and compensate British seniors justly, which is why the current economic circumstances should not be the easy way out for the current British government.

British Pensions in Australia group president, Jim Tilley, and Mrs Shirley De Andrade provided me with a copy of the group's Fair Play newsletter for autumn 2012. As stated in the newsletter, the British government benefits from not having to pay the support costs for those pensioners who leave the UK, including the costs of the National Health Service and other concessions. It has been estimated that the UK budget is some ₤3.1 billion better off in 2012 as a result of so many expatriate pensioners living elsewhere, which the British Pensions in Australia group lists as an offset to the cost of re-indexing their British pensions. The trouble is that the British Treasury already takes that benefit, resulting in their perception of re-indexation as being a cost to them. This is about justice and fairness. It is wrong that the level of the support that your homeland provides to you is influenced by where you live. It is unfair on the individual and it is unfair on Australian taxpayers who end up subsidising the UK's failure to carry out its responsibilities.

I note that the British Pensions in Australia group has suggested the re-indexation begin with those over the age of 85—those who have been hit hardest by this terrible policy and were a part of the war effort in World War II. This suggestion really puts the situation into focus by showing the sorts of people who are affected by this policy. We are talking about people who faced the most difficult situation during the war years but nevertheless made a contribution to ensure that the following generations are not forced to endure the same. They suffered then and they are suffering now, which highlights the injustice of this policy.

In the Fair Play newsletter Jim Tilley makes the point that, if the pensions had been unfrozen over the last 15 years, more pensioners would have left Britain or would not have been forced to return, saving the British government some ₤30 billion pounds. The situation is clear. The British government should acknowledge the contributions that these people made to their country and index their pensions rather than let the taxpayers of Australia and other countries pick up the load for its intransigence. The situation is not just. The UK government should right this wrong now.