Colin Jarvis
On the 16th of March the European Court of Human Rights, in
Strasbourg, will pass judgement in a case brought against the British
government. The action was brought by a group of British pensioners who
believe the British Government is treating then “unfairly”.
Why is this case being fought in the European Court of
Human Rights? It is simply because the pensioners have been through all the
other possible courts and this is the last Court of Appeal available to
them.
Why do the pensioners feel that they are being treated
unfairly? It’s really quite simple. In the UK, everyone who works pays into
the national insurance scheme, which amongst other things, pays for the
National Health Service and for state pensions. The final value of the
pension depends upon the number of years a person has contributed. A full
pension requires the pensioner to pay into the national insurance scheme for
30 years. This has recently been raised from 25 years. The state pension is
also indexed linked in an attempt to ensure that no one will suffer from
rising prices. That is, it is index linked unless you live in Australia,
Thailand or one of the other countries that does not have a reciprocal
agreement with Britain. This means that once you move away from the UK your
pension stays the same; until you die.
The pensioners shout “Unfair” as they had expected to
receive the same treatment as other pensioners who had paid in the same
amount.
Annette Carson, who emigrated to South Africa 10 years
ago, is one of the people who has taken the British government to court. Her
pension is the same as it was in 2000 yet her colleagues who stayed in the
UK now receive almost twice as much. Yet they all paid the same in
contributions. Is this fair?
My experience is that governments rarely concern
themselves with what is fair. They concern themselves with what will win
votes. There are over half a million pensioners affected by this pensions
freezing policy but they do not vote and therefore the government thinks
they can be ignored. The government rational is simply that offering index
linked pensions to all will cost them an additional ฃฝ billion a year.
This is government behaviour I understand. When there is
a group of people who cannot affect the outcome of an election, governments
will tend to ignore or exploit them. The dangerous aspect of this case is
that the government could use this argument to cease paying pensions at all
to pensioners living abroad. Then they would save even more money.
We will have to wait for another week to find out what
the judgement will be and then we will have to see whether or not the
British government will take any notice. So it may well be that Annette
Carson achieves nothing for all the hard work she has put in. If she loses I
am sure it will not be an end to the matter and it will come to a head at a
critical time before a general election.
In my experience governments do not consider anything
other than the economic argument. And it is this argument that may have to
be put to the government should the Strasbourg verdict to be unfavourable to
Annette Carson.
The British government’s own figures show that people of
pensionable age, on average, cost the government, over and above their state
pension, an additional ฃ7,000 per year. This is because of additional
benefits, a winter fuel allowance, free eyeglasses and the cost of using the
national health service.
This fact enables us to do a very simple sum. If we
multiply the half a million emigrant pensioners who are not in index linked,
by the cost they would incur for the government if they had stayed in the
UK, i.e. ฃ7,000 per annum each, we see that the cost of keeping these
pensioners in the UK would be ฃ3.5 billion. So rather than costing the
government half a billion these pensioners are actually saving a net ฃ3
billion for the government each year, even if their pensions were index
linked.
There are other benefits too. The UK has a great shortage
of accommodation which is freed up by pensioners who live abroad. Local
government also makes savings if pensioners live abroad as they do not have
to offer reduced council tax, free bus passes, free entry to Council
facilities and, of course, the huge amount of help and service provision to
elderly and infirm people.
Hopefully the pensioners will win through at Strasbourg
and the British government will toe the line. If they do not, the pensioners
are now well organised, and it is quite likely that this subject will be
raised during the forthcoming election. The politicians should remember that
the “Baby Boomers” are about to retire, and they do vote!
