My Lords, I will address my remarks, if I may, to Part 4 of the regulations—that is, Regulation 13. As I understand it, the regulations effectively replace what is called the home responsibility
protection with a 10-year minimum qualifying period for a UK state pension. Prior to 2010, we had in the UK both the HRP and a 10-year minimum qualifying period. From 2010 until now, we had the HRP only. That is now being replaced by the 10-year minimum qualifying period, which was the position before 2010.
I refer to the Explanatory Memorandum and, in particular, paragraph 7.21, which, without the benefit of an impact assessment, is one of the major ways of discovering how many people will be affected by the shift that is announced in the regulations. This is what worries me more than anything else. In the Explanatory Memorandum, the Government look at the difference between a seven-year and a 10-year minimum qualifying period. The number of affected individuals in the United Kingdom who reach retirement age between 2016 and 2020 is approximately 3,000—the figure for the seven-year qualifying period is 6,000 to 10,000, while that for the 10-year period is 9,000 to 12,000, so the average difference between the two is 2,500 to 3,000 people. However, the following sentence says:
“In comparison, we estimate that 18 to 23 per cent (6,000 to 10,000 people) of the total number of individuals living overseas reaching state pension age in the same period will not qualify for a state pension because of the 10 year MQP”.
Then there is an estimate of that saving the Exchequer £650 million by 2040. This figure, I presume, relates mainly to those people living in other countries who have made a contribution to a UK state pension through their national insurance contributions, but who have not reached 10 years of qualifying and do not live either in the EEA or in a country that has a bilateral arrangement with the UK—for example, contributors to a UK pension who live in Australia, Canada, New Zealand, South Africa and other places. That is presumably why this figure is so high.
In that four-year period from 2016 to 2020, somewhere between 18% and 23% of all those pensioners who are expecting to receive a UK state pension are now not going to receive one. I would be grateful if my noble friend could provide—in writing if he does not, as I suspect, have the information to hand—a breakdown of who will be affected, where those people are affected and what the average rate of payment into a UK state pension has been in terms of minimum qualifying periods. If in fact there is a greater number between seven and 10 years, would that figure of 18% to 23% of people affected fall dramatically, if there were a seven-year qualifying period? It would be interesting to know what the rates of contribution had been for those people.
There is of course a second issue, relating to those who live within one of the countries that have a bilateral arrangement with the United Kingdom. I presume that those who live in an EEA country would in fact be entitled, because of contributions made through that European Economic Area member state, to a pension of some sort from the country where those contributions had been made. I want to ask my noble friend whether that is correct. Has an assessment been made of what that pension would be in each of the European Economic Area countries? More specifically, for those countries where there is a bilateral arrangement—my noble friend mentioned Israel and
the United States of America—would the contributions which would enable people to get their pensions if they did not reach the 10-year minimum qualifying period, providing they had made sufficient contributions in those countries, for example, entitle them also to some form of pension ability in those countries, given that we have a mixed and bilateral system? I wonder whether my noble friend would agree with me that now is perhaps the time to reconsider the arrangements that we have with other member states in the European Economic Area and with other countries, particularly those of the Commonwealth, where we perhaps need to revisit whether we have a consistent, safe and sane system.
My noble friend also referred to the assistance that will be given to people to understand the new changes. It is not in the regulations, obviously, but paragraph 9 of the Explanatory Memorandum refers to guidance. Could my noble friend tell me whether any guidance is given to those people in the country who are now seeking, part-way through their working life, to emigrate to Canada or Australia, for example, that their state pension rights will be affected by these regulations, and perhaps much more dramatically than they would have been in previous years? I understand that this is a very narrow area to consider, so I would be happy, if necessary, to have a detailed reply in writing, but I would like to see the breakdown of how this affects people who have been contributing to a UK pension in countries such as Canada, New Zealand, Australia and South Africa.