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 £½ 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.
government’s own figures show that people of pensionable age, on average,
cost the government, over and above their state pension, an additional
£7,000 per year. This is because of additional benefits, a winter fuel
allowance, free eyeglasses and the cost of using the national health
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. £7,000 per annum each, we see
that the cost of keeping these pensioners in the UK would be £3.5 billion.
So rather than costing the government half a billion these pensioners are
actually saving a net £3 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.
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!