11. Jan, 2017


11 January 2017

BRITISH SHAME! The Betrayals Begin

On 21 March 1943, with plans for a ‘welfare state’ already in place, Churchill told the public that, following the war, "a four-year plan" of post-war reconstruction would included a "national compulsory insurance for all classes for all purposes from the cradle to the grave." That plan included future increases for pensioners. Throughout the war, the government used means-testing for allowances for the dependants of soldiers killed in action, though the cost of actually monitoring the means test was estimated at £2. 2s 6d (£2.12) per case; the resulting pension was a mere 3s 3d a week (£0.15). The tests led to many injustices: when an elderly couple moved to live with a son’s family they lost their pensions because the son became responsible for their upkeep; a woman in her eighties lost her pension when she was proclaimed to be co-habiting with a nineteen-year-old working man to whom she had rented a room. Such was the attitude of government towards the poor and vulnerable, a situation which has changed little (look at the record of Iain Duncan Smith 2010-2015 for proof of that same attitude today!).

When the Universal Declaration of Human Rights was adopted by the UN General Assembly in 1948, Eleanor Roosevelt said, “‘We wanted as many nations as possible to accept the fact that men, for one reason or another, were born free and equal in dignity and rights, that they were endowed with reason and conscience and should act towards one another in a spirit of brotherhood.” The Declaration was the first-ever code of basic human rights which would give effect to the United Nations determination that ‘human rights should be protected by the rule of law’. Many of the provisions from the Declaration of Human Rights were incorporated into two legally binding instruments of potentially global application: the International Covenant on Civil and Political Rights and the International Covenant on Economic and Social Rights, both of which the United Kingdom government signed, though not until the 1970s. Yet from the moment of signature, consecutive UK governments have failed to comply with the terms of the International Covenant on Economic and Social Rights, and have betrayed United Nations and human rights through the continual refusal to end the discrimination of the frozen pensions’ policy. United Nations will not accept a complaint from ordinary citizens; it will only investigate non-compliance if it receives a complaint from a government member of the United Nations. So the injustice goes on, condoned by United Nations organisation; so much for ‘dignity and rights’!

Following the war, the incoming Labour government maintained the contributory pension scheme and its rules already in place while it set about implementing the plans for the welfare state. However, progress was limited by a colossal war debt of more than 200 per cent of GDP, higher than it had been in 1815. Inflation was an unknown phenomenon at the time so that increases in pensions were not considered necessary; pensions bought what they had always bought. The value of money had not changed for decades and no one saw any reason to think it would be different in the future. Also, few people other than government employees chose to retire overseas and so the issue of pensions for overseas citizens was put to the back of the queue. However, the British Colonies were never far from parliamentary minds and in February 1954, the Labour Cabinet met to establish a single body for colonial activity – the Movement for Colonial Freedom.

And then, for the Labour government, the unthinkable happened - with a narrow win in the 1951 general election, Churchill was back. Although in his late seventies, he still had national and global prestige and he set about ending rationing while continuing to deliver the vision of the welfare state. A new pension law was passed which increased pensions but also increased the amount of contributions which people had to pay.

In March 1955, The House of Commons (the House) at last got around to debating the payment of pensions for people who retired overseas. Ernest Marples, a junior minister, explained that “people who settle in any part of the Commonwealth get all the benefits. And in ‘any part of the Commonwealth’ I include India, Pakistan and, by special arrangement, the Irish Republic. So, the benefits of National Insurance may be awarded to a citizen who goes to those countries. The benefits are payable because of Regulations made under Section 29 of the National Insurance Act 1946, and not by reciprocal arrangements between this country and any Commonwealth country. The Commonwealth countries are exempted from the normal ban that benefits are not paid when people go abroad.” Clearly, the intention was to treat all pensioners equally and fairly, at least in the Commonwealth.

You will probably remember that pensions under the 1946 Act were confined to residents in Britain and that it was intended that the new National Insurance Scheme would introduce a higher level of pension to which overseas residents were not expected to contribute. Suddenly, that fairness of not getting what you had not paid for was betrayed and became not getting even when you had paid for it all your working life – that is for those who retired abroad to a country other than the Commonwealth!

The Government had not introduced this measure as a Bill for debate in the House but had used ‘Regulations’ so that MPs would have great difficulty changing one issue amid a block of other matters. An MP observed that “as the Bill stands the Treasury has complete licence to alter or modify the rights of pensioners under these paragraphs in any way it wishes.” The Under-Secretary of State for Commonwealth Relations, Mr. Douglas Dodds-Parker, responded with an assurance: “I think we can rest assured that these individuals will enjoy the benefit which we wish to give them under the Bill. It is specified earlier in the Bill that in fact the application is restricted to a group of individuals who are living in the United Kingdom or whose pensions are expressed in sterling.” With hindsight, the next betrayal stares out from the page – the Government would decide who would get what and the Commonwealth was not necessarily protected!

To make sure that MPs in the House of Commons were not in a position to change anything during debate, the Government took to delegating Junior Ministers to answer MPs questions, changing the sequence of questions, and limiting the time allowed for debate. It was also observed that the House was almost empty of government MPs during the debate but that they all arrived to take part in a vote later (despite having very little idea of what the debate had covered).

While the Government was planning to renege on protection for the Commonwealth, it was also allocating resources to encourage emigration to Commonwealth countries as recommended in the First Annual Report of the Overseas Migration Board. MPs noted that “The British Commonwealth and Empire was built up and made great, and its cohesion was formed, by the habit of migration of the generations which had gone before; and that the Australian and Canadian Governments were anxious to have more British people, and were carrying out a vigorous recruiting campaign in Britain.” The British Government had spent about £185,000 annually, including £150,000 on the Australia assisted passages scheme and £35,000 on the child migration scheme. (It was revealed many years later that many of these children were sent to Australia without parents’ consent.)

It was also noted that since WW2, Britain had absorbed approximately 200,000 to 300,000 emigrants from the Continent, with a further inflow of British subjects from the West Indies who, too, were doing essential work within UK’s economic system. However, an MP observed that the real cause of the emigration was attractive government adverts offering £75 trips to England, and suggesting that when they came there would be television sets and free accommodation. When they arrived, there was no one to tell them that that was not the case or that the state pensions they worked for all their lives would be frozen if they retired to their home countries. During the Coronation, a [reciprocal] agreement was signed between UK and Australia covering emigrants by Australian old-age insurance benefits, so ensuring that emigrants to Australia lost nothing by emigrating.” (This is not actually the case because UK retirees get only a proportion of the Australian benefits today.) In other words, the Government was well aware that it was taking away future pension benefits from other emigrants. (In recent years the Government has acknowledge to the House that a reciprocal agreement is not a legal necessity for paying pension parity; it is merely a current excuse for paying it for certain countries.)

In the Budget of that year, the Chancellor advised the House that economic growth through the 1950s meant that the country had “reached the stage of being on the verge of prosperity” and that the Government intended to distribute benefits of £100 million. In the event, around £45 million went to ‘just over 200,000 companies, of which £21 million went to only 300 companies, each of them already making £1 million a year profit or more’. While trading profits for those companies from 1952 to 1954 had increased by £381 million, tax on those companies had declined by £136 million. In this Budget those same companies also received tax concessions of another £20 million. Personal tax changes meant that a £10 a week family worker actually paid more tax, and a £10,000 a year professional received £5 a week more. There was no increase for pensioners as stated by Churchill.

With Churchill retired (5 April 1955), the Conservative government were free to commit their infamy and to introduce the rule that people who retired overseas would have their pensions frozen at the point of leaving the UK, even when they had contributed to the new National Insurance scheme all their working lives. It was not a question of affordability – the UK economy was at its highest point since WW2. It was not a matter of convenience of British Post Offices for arrangements had already been made to pay pensions through Consular offices. It was not the thought that future costs would be huge since inflation was not expected to increase much if at all. It was not because of an expected high emigration volume since few ordinary people ventured overseas in those days except under government schemes.

Why should the government of a wealthy country choose to exploit and discriminate against a small group of its own pensioners for no apparent reason or benefit?

Next: BRITISH SHAME!The Colonial Connection