APRIL 2002 onwards, Carson hearings

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For more information on subsequent developments go to Archives
Notes on The Judgement
Carson - the Hooper precedent
Comment on the Judgement by Brian Havard, President of BAPA
Also see Comment by Paul Lewis
Minister Amanda Vanstone Media Release
Peter Slipper, MP. speaks out

Senator the Hon Amanda Vanstone Minister for Family & Community Services

UK High Court decision lets down pensioners 22 May 2002
I am very disappointed with the United Kingdom High Court's decision that the refusal to pay indexed pensions into countries such as Australia was lawful.
The Australian Government still believes the UK's policy is discriminatory. We will continue to pursue the UK Government over this matter.
The UK Government's policy is simply unfair and it should recognise the compelling moral arguments for paying UK pensioners their proper entitlements.
These people have contributed over many years to earn their pension rights. They have contributed on the same basis as people living in the UK, and former UK residents now in the USA, Israel or the Philippines. Yet they are denied the same benefits.
There are over 220,000 UK pensioners in Australia and over time their UK pensions become increasingly worthless leaving Australian taxpayers to pick up the tab. About 160,000 of these UK pensioners also receive means-tested Australian pensions.
Many of these pensioners served in the UK armed forces and risked their lives defending their country.
I will continue to pursue this matter with the UK government on behalf of all UK pensioners in Australia.
I am considering what further action we might take, including working with other affected countries, like Canada, to support our cause. We will be in contact with our legal counsel over the following days to explore the legal implications of the judgment. That said, the Australian Government will not give up on this matter.
 © Commmonwealth of Australia, 2001. 23 May 2002.
Government takes up Pommy pensioners' fight

A SUNSHINE Coast MP has accused the British Government of fraud by refusing to pay pension increases to its expatriates.

Member for Fisher Peter Slipper said the Australian Government would be doing all it could to fight a High Court ruling which allows the UK government to refuse to index pensioners.
Buderim resident David Waterhouse, who is Queensland co-ordinator of the British Australia Pensioner Association, said that with 220,000 pensioners in Australia, the UK was robbing Australia of an extra $450 million a year .

This was despite a surplus in its national insurance scheme of $90 billion.

Annette Carson, 61, faces a potentially crippling legal bill after the High Court dismissed her bid to have her pension indexed. The case was watched closely by 430,000 British pensioners whose pensions are frozen at the rate paid at the time of their retirement simply because they live in Australia, New Zealand, South Africa or Canada. High Court judge Justice Stanley Burnton said the policy was illogical, with no consistent or coherent pattern. But he said it was a political decision, not a judicial one, and the government was entitled not to spend the $946.37 mil lion a year it would take to index pensions.

Mr Waterhouse vowed the fight would continue. "This is an issue that is not going to go away."

Sunshine Coast Daily, Queensland. 24/5/02

Comment on the Judgement by Brian Havard, President of the
British Australian Pensioner Association

Half a million frozen pensioners have greeted the Carson judgement with dismay and disbelief, yet this incredible decision threatens still greater numbers who had looked to the Human Rights Act for the protection of their civil liberties.

In his introduction to the Guide to the Human Rights Act 1998 (HRA), the then Home Secretary, the Rt. Hon. Jack Straw wrote:

"The Human Rights Act makes rights from the European Convention on Human Rights (ECHR) into a form of higher law in the United Kingdom. Our Governments have sought to comply with these rights since the Convention was first agreed some fifty years ago. But now all state bodies, including the courts . . . must act in accordance with the Convention rights when making decisions which affect you. If they interfere with these rights, they will have to be able to justify that interference in accordance with the new law."

In 1998 when HRA was being debated, Charter88, the most active campaigner for parliamentary reform, expected it " . . to strike a balance between the powers of Parliament, Government and the Courts" , but the Government had formulated the Bill such that courts would be denied the right to overturn existing legislation, the final arbiter was to be the Minister. This imbalance brought an immediate response:

"But Parliament is emasculated, backbenchers having traded their powers against the prospect of long-term political careers for the obedient. William Hague (then Tory leader) said "The House of Commons needs reform – it no longer effectively scrutinises legislation nor holds ministers to account".

The ECHR debate is about how Britain handles human rights and natural justice. The Convention, though far from perfect, is too precious to be surrendered to governments prepared to dispense with the niceties of natural justice lest they be deflected from their pursuit of electoral survival. With Parliament unable to protect us, who else can do so but the Courts until fundamental change in our parliamentary system gives renewed meaning to the separation of powers?"

The principal recommendation of the Social Security Committee 1996 enquiry into the selective non-payment of expatriate pensions uprating had been that the issue should be resolved by Parliament after a debate in prime time with the whips off. But neither the expiring Tory administration (the last to preside over a balanced House in which a majority had indicated support for the frozen pensioners) nor its New Labour successors would risk allowing 650 Members under no duress to make a moral judgement.

New Labour carried backbench impotence to a still lower level. Simon Jenkins wrote in the Times "Britain’s separation of power no longer happens in the open in Parliament, but occurs subtly within the walls of the Cabinet room". Martin Bell MP asked the PM ‘to allow backbenchers more freedom to speak their minds and vote their consciences’. He called for the Commons to be ‘more a parliament of free people, and less a rubber stamp assembly’.

Harry Cohen MP said ‘There is too much sycophancy among the backbenchers; it has gone too far. It’s about time the traditional role of the backbencher to scrutinise the executive was re-asserted’. Chair of the Commons liaison committee Robert Sheldon MP, speaking for the chairmen of 27 select committees, warned Ministers not to try intimidating backbench MPs on Select Committees, adding ‘We want to make sure that select committees continue to occupy this position of questioning the executive and bring their reports out without any fear of the consequences’. Jeremy Corbyn MP considered it already too late; ‘Select committees are pressed not to question ministers, and sub-committees are staffed on the basis of loyalty to the party line . . . ’

It is to this enfeebled parliament that the Carson judgement, para 68, consigned the fate of frozen pensioners " . . . it is clear that the judicial arm must give the greatest deference to the legislature and to the elected executive", citing with evident approval the fantasy concept of deferring ". . on democratic grounds to the considered opinion of the elected body or person whose act or decision is said to be incompatible with the Convention". Yet the judgement in para 32 had carried the admission by Pensions Minister Jeff Rooker that no logic had informed Government decisions!

Deference to a supposed parliamentary prerogative - a pre-HRA concept - was supported by selective, sophistical and increasingly convoluted reasoning, for example:

Para 39 ‘. . the Commission has frequently held that the payment of contributions to a pension fund may in certain circumstances create a property right in a portion of such a fund and a modification of the pension rights under such a system could therefore in principle raise an issue under Article 1 of Protocol No. 1. The Commission has added, however, that "even if it is assumed that Article 1 of Protocol No. 1 guarantees persons who have paid contributions to a special insurance system the right to derive benefit from the system, it cannot be interpreted as entitling that person to a pension of a particular amount" (see Müller v Austria, Comm. Report 1.10.75, para. 30, D.R 3 p.25)." The judgement fails to record from the Muller case:

32. It is true that, in some cases, a substantial reducing of the amount of the pension could be regarded as affecting the very substance of the right to retain the benefit of the old age insurance system. However, in the present case, this problem does not arise because of the difference of which the applicant complains amounts to 97.70 schillings, that is to say approximately 3% of his pension.’

In the Carson judgement appears in para 5 ‘The effect on the Claimant has so far been relatively minor: she has not received the small percentage uprating applied in 2001. The effect on those who retired long ago is more substantial and may be dramatic. Mr William Hayes, who lives in Australia, reached 65 in 1972. He receives a pension of the inconsiderable sum of £6.75 a week, less than one-tenth of the sum of £72.50 that would be paid to a pensioner with a complete contribution record who retired last year.’ Who will deny that Mr Hayes with a pension 90% below current levels has suffered ‘ a substantial reduction affecting the very substance . . ‘

Para 46 ‘. . Where, however, the payment of contributions is no more than a condition for entitlement to a benefit (as I assume was the position in Gaygusuz), it is difficult to see why entitlement to a benefit resulting from satisfaction of that condition should create a pecuniary right protected by Article 1, when entitlement to benefit resulting from satisfaction of some other condition should not.’ The argument is academic, suspect and irrelevant when the entitlement of 96% of UK pensioners including half the expatriates is accepted by the Government without demur.

‘ In a case such as the present, the payment of benefit does not create a right of property in any real sense.’ Perhaps in the judiciary, but in the real world, it does just that.

Para 47 ‘However, I entirely agree with Moses J, in paragraph 50 of his judgment in Hooper, that a pecuniary right protected by Article 1 is defined by the domestic legislation that created it. I refer in particular to the decision of the Court in Bellet, in which the Court stated:

"... while no right to the grant of a pension is, as such, guaranteed by the Convention, compulsory contributions to a retirement fund may give rise, in certain cases, to a right of ownership over part of the funds .... However, it is still necessary, in order for such a right to accrue, that the persons concerned should fulfil the conditions laid down by national law." This is again asserted as a firm Carson judgement in para 49, only to have that reasoning invalidated by:

Para 49 ‘In my judgment, therefore, there has been no infringement of Article 1 of the First Protocol. I add, however, that it does not follow that legislation that removes a right protected under Article 1 of the First Protocol cannot infringe that provision. That case is not before me.’ Frozen pensioners contend that the legislation removing the right is indeed in breach of the Convention and since national law was the ground for rejecting the pensioner case, not addressing the issue at this hearing was unrealistic.

Para 63 ‘Similar comments (to those in para 62 regarding South Africa) apply to the comparison between the Claimant and those living in other countries.’ This is demonstrably incorrect. Eighty percent of the affected pensioners live in Australia and Canada where inflation rates and the cost of living are directly comparable to the United Kingdom.

Para 65 ‘It seems to me that the comparison between the positions of persons living in different countries, in different social and economic circumstances, and under different tax and social security regimes, is complex, and cannot simply be restricted to a comparison of the sterling amounts of their UK pensions’. The argument is again irrelevant since this has never been a consideration of Government in its choice of countries in which to uprate, see para 28 19(f) ‘no regard is had to inflation’.

Para 66 The judgment dismisses Gaygusuz from transforming the legal position after the dismissal of Havard (App. No. 38882/97), yet admits that no grounds for rejection had been disclosed, adding ‘The lack of any specific reasons is tantalising, and has left me to consider the question of breach of Article 14 without the benefit of the recent thinking of the Commission. I should very much liked to see the report and information referred to in the decision’. As also would the applicant. There was no reference to report and information in the decision document which merely stated:

"The Committee has examined the applicant’s complaints as they have been submitted in the application introduced on 28 July 1997 and registered on 5 December 1997 under the file no. 38882/87 and has noted that the applicant has been informed of the possible obstacles to the admissibility of the application".

The ‘possible obstacles’ were set out in a letter 27 August 1998 from a clerk in the Secretariat, alleging that ‘ the complaints . . are substantially the same as complaints which have already been dealt with the Commision (sic). I enclose a copy of the Commission’s decision in application No. 9776/82.’ (JW & EW). It should be noted that the Commission was to be abolished some days later, it was reportedly struggling to clear a substantial backlog, and the dismiaal was endorsed by a ‘kangaroo’ court of only three judges instead of the usual 12 to 14.

Thus the Carson judgement dismisses the crucial Gaygusuz precedent from having reversed JW & EW on the basis of Havard yet there is no evidence that Gaygusuz was ever considered, the application having been dismissed on the basis of that same JW & EW precedent. A circular argument indeed.

Para 71 ‘European jurisprudence does not differ from English authority on the deference to be given to the democratically-elected organs of government in the field of social policy and public expenditure . .’ citing Mellacher [1989]. But this totally ignores the evolving ECHR jurisprudence in Sutherland [1994]

‘61. In contending that there remains a reasonable and objective justification ... the Government place considerable reliance on the fact that the issue was recently and fully debated by a democratically elected Parliament. Nevertheless, this factor cannot of itself be decisive. Of more importance is the sufficiency of the reasons advanced .’

Moreover the judgement in para 35 complained of a lack of evidence of the practice in other states, yet acknowledged in the following paragraph that the UK is alone among OECD countries in practising pensions discrimination. Annex 2 listing examples of restrictions by other countries rightly included three major European countries with similar contributory pension schemes, but their restrictions apply only to NON-nationals, while Australia and New Zealand have tax-funded schemes which are in no way comparable.

Importantly, the judgement takes no cognisance of a directly comparable case involving discrimination against expatriate pensioners heard in the German Constitutional Court {1979] which determined:

- According to Article 3, Para 1 of the Basic Law, the Government must not arbitrarily treat unequally what is basically equal.

- The unequal treatment of insured people who, through equal contributions have achieved an equal legal foundation and an equal insurance entitlement, cannot be reconciled with the Basic Law.

- The question whether, when and for what reason a reciprocal social security agreement can be sought or concluded, lies completely outside the sphere of the insured person.

Para 72 ‘The fundamental question is whether the UK Government may lawfully restrict uprating of pensions to pensioners within Great Britain’. It is inconceivable that the Government would discriminate against pensioners in say Scotland by denying them the uprating paid to all other UK pensioners.

‘It seems to me that the discussion of this question is illogically affected by the incorrect perception that a pension is the fruit of the investment by a pensioner of National Insurance contributions.’ Never have the millions who made obligatory contributions regarded them as investments which would bear fruit. They see the scheme as one in which they make contributions as determined by the Government

during their working lives, including to occasional increases to adjust for inflation, for the benefit of their pensioner contemporaries, in the knowledge that their eventual retirement will be similarly funded, all on a basis of strict parity.

‘If it were, the Claimant would have a right protected by Article I of the First Protocol’

Gaygusuz determined it is indeed a right protected by Article 1 of Protocol 1.


Para 73 ‘The Government has decided that uprated pensions are to be confined to those living in this country or living in certain other countries. It seems to me that a Government may lawfully decide to restrict the payment of benefits of any kind to those who are within its territorial jurisdiction. . Such a restriction may be based wholly or partly on considerations of cost, but having regard to the wide margin of discretion that must be accorded to the government, I do not think it one that a Court may say is unreasonable or lacking in objective justification ‘

This assertion goes to the heart of the matter. The judgement accords to the Government the right to make arbitrary decisions, discriminating between one citizen and another, even when - as applies in this case – it has conceded that its decisions were not informed by any logic, when it is unsupported by the practice in any other comparable country, and when it acknowledges (para 49) that the legislation which removes a right protected under Article 1 of Protocol 1 could infringe HRA.

Para 75 ‘The matter has certainly been before Parliament: see paragraph 12 of the DSS Memorandum cited above.’ The 1995 debate was scheduled for mid-night with careful whipping to ensure defeat of the motions. No administration has accepted the challenge of the Social Security Committee recommendation for a debate in prime time with the whips off.

‘Lastly the reason for the payment of uprated retirement pensions to the residents of some foreign countries only is historical: changed political policies, different results.’

A change in policy resulting in discrimination is what the Human Rights Act was intended to obviate.

 By Paul Lewis
From the Weekly Telegraph, issue No 566.

IF THE Human Rights Act has any purpose at all it is to check the power of Government to pass laws which are unfair or wrong. The High Court case brought by Annette Carson was a perfect example of what the Act should be used for - to strike down a bad law which even the Government admits is "illogical". By rejecting Mrs Carson's case, Mr Justice Stanley Burnton showed how feeble the courts are when it comes to using the Act to challenge the power of Parliament. He stated in his judgment that "the judicial arm must give the greatest deference to the legislature" both in deciding how resources are allocated and in foreign relations. So the cost of change and the fact that it involved foreign countries meant the Government was entitled to decide its own policy on uprating pensions "on a country by country basis".

When Labour first proposed incorporating the European Convention on Human Rights into British law some lawyers opposed it. Not because they wanted us to have fewer rights but because they feared that the English (and Scottish) courts would be more reluctant to use human rights to defy the intention of Parliament or the decisions of government than the European Court of Human Rights had proved itself to be. So having the convention as part of our law, decided by our courts, would weaken, not strengthen, those rights. Mr Justice Burnton's  judgement illustrates those fears perfectly. And the fact that he gave permission to appeal against his judgment before Mrs Carson's barrister had even asked for it could be seen as illustrating his own fear of making a challenging decision -let more senior judges do that if they want to, he was not going to.

But if the judiciary comes out of this as supine, the Government appears simply vindictive. No one doubts that this was an important test case of a law which has been campaigned on, in Parliament and outside, for 15 years. To demand that Mrs Carson, a willing guinea pig with few assets, should pay the costs of the expensive legal team fielded by the Government to defend itself is as appalling as it is unprecedented. The only slight credit the judge gets is that no sooner had he made this order on costs than he said he would allow an appeal on that too "so the Court of Appeal can see if that order is a reasonable order". Kick this one upstairs too. Paying her own lawyers has already required fund raising around the world. By making Mrs Carson pay the Government's costs as well has raised the stakes and made the decision on appealing even more difficult. Let us hope she does find the money to take on the judges and ministers and show them to be the petty people they are. If she cannot do that, the Human Rights Act has no purpose but to give spurious credibility to whatever unfair and illogical laws the Government forces through a hapless Parliament.
D Paul Lewis is the presenter of : BBC Radio's Money Box programme.

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