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Cite as: [2002] EWHC 978 (Admin), [2002] 3 All ER 994

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Carson, R (on the application of) v Secretary of State for Work and Pensions & Anor [2002] EWHC 978 (Admin) (22nd May, 2002)

Neutral Citation Number: [2002] EWHC 978 (Admin)
Case No: CO/2704/01


Royal Courts of Justice
London, WC2A 2LL
22 May 2002

B e f o r e :


THE QUEEN on the application of ANNETTE CARSON
- and -

- and -



(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)


Richard Drabble QC, Helen Mountfield and Murray Hunt
(instructed by Thomas Eggar Church Adams) for the Claimant
James Eadie and Khawar Qureshi (instructed by the Treasury Solicitor) for the Defendant
Tom de la Mare for the Intervening Party



Crown Copyright ©

    Mr Justice Stanley Burnton:


  1. These proceedings raise the important question whether the failure of the Government of the United Kingdom to pay to pensioners resident in certain countries abroad, in the case of the Claimant South Africa, the inflation uprating of their UK State pensions contravenes the European Convention on Human Rights.
  2. The Claimant is resident in South Africa. She spent most of her working life in England, and while she was employed she and her employer, and while she was self-employed she alone, paid full National Insurance contributions. She has been resident in South Africa since 1990. When she was working in South Africa she paid voluntary contributions to protect her right to a UK State pension. She began to draw her pension in September 2000. She receives a British Retirement Pension of £103.62 per week, comprising a Basic Pension of £67.50, an Additional Pension (under the State Earnings Related Pension Scheme, or SERPS) of £32.17 and Graduated Pension of £3.95. She has not received the increase in the Basic Retirement Pension of £5 (from £67.50 to £72.50) that has been paid since 9 April 2001 to those entitled to it; nor has she received the percentage increase in the Additional Pension and Graduated Pension that has been paid since that date. It is accepted on her behalf that she is not qualified for these increases by reason of the relevant provisions of UK legislation and delegated legislation, apart from the Human Rights Act 1998. While the Claimant remains in South Africa, her total British pension will remain frozen at £103.62 irrespective of inflation-based uprating of pensions for those who live in Great Britain and certain other countries referred to below.
  3. The position of the Claimant, as a recipient of a “frozen” pension, is representative of UK pensioners not only in South Africa, but in all the countries of the so-called Old Commonwealth, including Australia, Canada and New Zealand.
  4. Pensioners living in other countries, such as the USA, EU countries, the states of the former Yugoslavia, Japan, Mauritius, Turkey, Bermuda, Jamaica and Israel, receive the same pension from the UK Government as they would receive if they lived here: i.e., their Basic Retirement Pensions are uprated. Of some 760,000 pensioners and widow beneficiaries who live abroad, some 330,000 receive the annual uprating. The remainder do not. The great majority of the remainder live in the Old Commonwealth countries mentioned above.
  5. In some respects, the position of the Claimant is not representative. A pensioner who lives abroad receives initially the full pension that he would have received if he had remained in this country. He is denied the uprating for inflation from the date of his emigration or if earlier the date of his qualifying for his pension: in effect, his pension is frozen at the amount payable when he reached 65 if he had already emigrated or when he emigrated if he did so subsequently. (If he returns to Great Britain, his uprated pension is paid while he is here, but if he leaves his pension reverts to its previous amount.) 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. Someone who retired as recently as 1990 receives only £46.90 a week.
  6. Very many of the expatriate UK pensioners who do not receive uprated pensions have a strong and understandable sense of grievance. They paid their contributions calculated in the same way as pensioners now living here and in, say, the USA, yet they do not receive the same pension. They feel that they have been deprived of an increasingly substantial part of the fruit of their contributions. The real value, at least in the UK, of their pensions is declining from year to year. As a result, they have formed associations to press their cause for equal treatment. As will be seen, before the coming into force of the Human Rights Act 1998 a number of them made applications to the European Commission of Human Rights, complaining that their rights under Article 1 of the First Protocol and under Article 14 had been infringed. Their applications were unsuccessful. However, they contend that recent developments in the jurisprudence of the European Court of Human Rights establish that the UK Government has indeed infringed their rights under those Articles.
  7. In her second witness statement, the Claimant suggested that she had not been informed that her pension would be frozen when she decided to pay her voluntary contributions from South Africa. That allegation has not been pursued on her behalf. Indeed, it is clear that the literature distributed by the Department of Social Security (and sent to her) was explicit and clear as to the position of UK pensioners who live in South Africa. The issues pursued on behalf of the Claimant are not dependent on her individual facts, and turn on the provisions of the applicable UK legislation and of Article 1 of the First Protocol and Article 14 of the Convention.
  8. The Issues

  9. Article 1 of the First Protocol is as follows:
  10. Protection of Property
    Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
    The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
  11. In summary, the Claimant’s contentions under Article 1 are as follows:
  12. (a) Her state pension, or alternatively its uprating, are pecuniary rights, and therefore “possessions” within the meaning of Article 1 of the First Protocol.

    (b) The failure of the UK Government to pay her the amount of the annual uprating wrongfully deprives her partly or wholly of one or other of those possessions, i.e., part of her pension and the entirety of the uprating.

  13. Mr Eadie, on behalf of the Secretary of State, accepted that the right to a contributory pension is protected by Article 1 of the First Protocol. However, he submitted as follows:
  14. (a) Article 1 does not confer a right to a pension in any particular amount, and is therefore not infringed by the failure to pay uprating to the Claimant.

    (b) The right protected by Article 1 of the First Protocol is defined by domestic law. Since UK law does not confer (and has never conferred) a right to an uprated pension on pensioners living in South Africa, the Claimant has not been deprived of any right, and therefore of any possession, within the meaning of Article 1.

    (c) The decision of the Government not to pay uprating to the Claimant and to those in her position is objectively and reasonably justified and is therefore a permissible deprivation of such possession as she may have.

  15. Article 14 is as follows:
  16. Prohibition of discrimination

    The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any grounds such as sex, race, colour, language, religion, political, or other opinion, national or social origin, association with a national minority, property, birth or other status.
  17. It is common ground that there may be a breach of Article 14 without there having been a breach of any other Article of the Convention. Clearly, Article 14 adds to the protection conferred by the other provisions of the Convention. It is not however every act of discrimination that is within the scope of Article 14: it protects only “the enjoyment of the rights and freedoms set forth in this Convention”. In Gaygusuz v Austria (1996) 23 EHRLR 230, the Court put the matter in terms that constitute a virtual formula applied in other cases:
  18. “According to the Court’s established case-law, Article 14 of the Convention complements the other substantive provisions of the Convention and the Protocols. It has no independent existence since it has effect solely in relation to “the enjoyment of the rights and freedoms” safeguarded by those provisions. Although the application of Article 14 does not presuppose a breach of those provisions – and to this extent it is autonomous – there can be no room for its application unless the facts at issue fall within the ambit of one or more of them.”
  19. Mr Drabble submitted that the complaint in the present case is “within the ambit” of Article 1 of the First Protocol, not least because the right to a state pension is a right protected by Article 1. He submitted that the Claimant has been the subject of discrimination, on the ground of her residence in South Africa, as compared with UK pensioners living in this country and in those other countries in which uprating is paid.
  20. Mr Eadie submitted:
  21. (a) If the Claimant has no possession within the meaning of Article 1 of the First Protocol (as he submitted), she has no claim within the ambit of Article 14 read with Article 1 of the First Protocol.

    (b) The basis of the differential treatment of the Claimant and others to whom comparison was made was not “any ground such as sex, race …. or other status” to which Article 14 applies.

    (c) In any event, the decision of the Government not to pay uprating to the Claimant and to those in her position is objectively and reasonably justified.

  22. The above submissions of the parties raise the following issues:
  23. (a) Is the state pension or the uprating a possession of the Claimant within the meaning of Article 1 of the First Protocol?

    (b) If so, is the failure or refusal of the Government to pay an uprated pension to the Claimant a deprivation of that possession for the purposes of Article 1 of the First Protocol?

    (c) If so, is that deprivation justified?

    (d) If uprating is not a possession for the purposes of Article 1 of the First Protocol, is the payment of uprating to some, but not all, pensioners nonetheless within the scope of Article 14? I.e., does the Claimant’s complaint relate to “the enjoyment of the rights and freedoms set forth in (the) Convention?”

    (e) If so, what is the criterion applied to determine the differential treatment of pensioners?

    (f) Is that criterion a ground “such as sex, race, … or other status” that is, unless objectively justified, prohibited by Article 14?

    (g) If so, is the differential treatment of the Claimant as compared with:

    (i) pensioners living in this country, or
    (ii) pensioners living in states such as the USA, whose residents are paid uprated pensions,
    wrongful discrimination in breach of Article 14?
  24. In addition, in the course of my consideration of my judgment in this case, I concluded that an additional, and more fundamental, issue must be considered, namely whether the provisions of the Convention apply to persons, such as the Claimant, who are outside the jurisdiction. That question arises by reason of the terms of Article 1 of the Convention, which is as follows:
  25. “The High Contracting Parties shall secure to everyone within their jurisdiction the rights and freedoms defined in Section I of this Convention.”

    The Claimant and those like her are of course not within the territorial jurisdiction of the United Kingdom.

  26. The express jurisdictional qualification in Article 1 of the Convention is not expressly reflected in the provisions of the Human Rights Act. If the Act is to be construed as subject to the same qualification, and Article 1 refers to presence within the territorial jurisdiction of the State, the Claimant is not entitled to any of the rights conferred by the Convention, and she has no rights under either Article 1 of the First Protocol or Article 14.
  27. In these circumstances a further hearing took place on 8 May 2002 to enable to parties to make submissions on the jurisdictional issue raised by Article 1. In view of its importance I consider it first.
  28. The jurisdictional issue

  29. The natural reading of Article 1 of the Convention limits Convention rights to persons within the territorial jurisdiction of the High Contracting Parties. Prima facie, the jurisdiction of states in international law is territorial. This presumption is part of English Law: Parliament is presumed to intend an Act to extend to each territory of the United Kingdom, but not to any territory outside the United Kingdom: see Bennion, Statutory Interpretation, 3rd edition, at section 106, page 252. The comity of nations is doubtless one basis for this presumption: one state should not be taken to interfere with the sovereignty of another state by enacting legislation extending to its territory. Another is practicality: most legislation cannot practically be applied to those present in another state.
  30. However, jurisdiction need not refer simply to personal presence within the territory of a state. Rights and property may be within the jurisdiction of a state, though the owner of the right or of the property may be outside the state. The French version of Article 1 of the Convention differs from the English:
  31. Les Hautes Parties contractantes reconnaissent à toute personne relevant de leur juridiction les droits et libertés définis au titre I de la présente Convention.

    The French text suggests that the High Contracting Parties undertook to accord Convention rights to all persons relevant to their jurisdiction. On this basis, a person whose rights or property are within the jurisdiction of a state is entitled to such of the Convention rights as apply to those rights or property. On this basis, Article 1 refers not to the presence of persons within the territorial jurisdiction, but to jurisdiction in a legal sense.

  32. That this is the correct meaning to be given to Article 1 is confirmed by the jurisprudence of the Court as well as State practice. In none of the cases in which expatriate state pensioners have made applications to the Commission has the territorial limitation of the Convention been explicitly referred to. In Air Canada v UK (1995) 20 EHRR 150, the European Court of Human Rights held that the seizure of an aircraft belonging to the Canadian applicant had not infringed Article 1 of the First Protocol. It was not suggested that the fact that the applicant was resident in Canada affected its rights under that provision. (However, it may well be that Air Canada carried on business in the UK, and was present within the jurisdiction in any event.) In Drozd and Janousek v France and Spain (1992) 14 EHRR 745, the Court said, at paragraph 91 of its judgment:
  33. “The term ‘jurisdiction’ is not limited to the national territory of the High Contracting Parties; their responsibility can be involved because of acts of their authorities producing effects outside their own territory.”

    In Bankovic and ors v Belgium and others (App. no. 52207/99), the Court rejected as inadmissible the complaint of the applicants that the NATO bombing in Belgrade was in breach of, principally, Article 2 of the Convention. The state respondents relied on Article 1 of the Convention. They submitted that jurisdiction in that provision referred to “the assertion or exercise of legal authority, actual or purported, over persons”: paragraph 36 of the judgment. The Court accepted this interpretation: it referred, in paragraph 80 of the judgment, to the Convention operating in the legal space (espace juridique) of the Contracting States.

  34. In the present case, the object of the application of the Convention is legislation that confers benefits on individuals. It clearly operates in (and only in) the “legal space” of the UK, and is therefore within the scope of the Convention. There is no question of any possible infringement of the sovereignty of another state or the exercise of sovereignty over those present in another state. Mr Eadie, on behalf of the Secretary of State, did not submit that the Claimant’s case fell to be rejected on the basis of jurisdiction, and it was therefore common ground between the parties that it falls to be considered on the merits.
  35. Article 1 of the Convention is not part of English Law: it was not included in Schedule 1 to the Human Rights Act. In the circumstances, it is unnecessary to consider the question whether the ambit of the rights and freedoms legislated by the Act differ from those of the Convention. I am bound to say that I should be surprised if there were any such difference.
  36. The United Kingdom statutory provisions on pensions

  37. Of all legislation, that relating to social security should be clear and accessible. Regrettably, the relevant provisions are typically and unnecessarily complex, involving the application and disapplication of other provisions: compare the comments of Munby J in Ryan v Liverpool Health Authority [2002] Lloyd’s Rep Med 23, and of myself in Bell v Todd [2002] Lloyd’s Rep Med 12. The relevant provisions are summarised and so far as necessary set out in Annex 1 to this judgment. For present purposes, the effect of the statutory provisions may be summarised as follows:
  38. (a) Contrary to popular perception, a person’s contributions do not in whole or in part constitute a fund from which her pension is later paid: there is nothing in the legislation to warrant such a conclusion.

    (b) The basic state pension is contributory only in the sense that the payment of sufficient contributions is a condition of entitlement. In addition, if more than a quarter but less than the full number of qualifying years has been achieved, a reduced rate pension is payable.

    (c) Provided Parliament approves the statutory instrument that the Secretary of State is required to put before it by virtue of section 150(9) of the SSAA, the basic state pension is uprated annually in line with UK inflation.

    (d) However, a person who is both absent from, and ordinarily resident outside, Great Britain is disqualified from receiving any additional benefit payable as a result of uprating after the date she reaches retirement age or her emigration, whichever is later.

    (e) It follows from (d) that a person who is ordinarily resident abroad who returns to this country temporarily receives her uprated pension while here; when she returns to her country of residence however her pension reverts to its previous sum.

    (f) However, uprated pensions are paid to those living in the countries referred to in paragraph 4 above, with whom the UK has entered into reciprocal agreements and in respect of whom appropriate Orders in Council have been made. Where it is paid, no regard is had to inflation in the country of residence.

    Finance and History

  39. The National Insurance scheme, including the payment of state pensions, is financed on a “pay as you go” basis, that is, current National Insurance contributions to the National Insurance Fund (“NIF”), mainly from employers, employees and the self-employed, fund current benefits. Thus a person’s contributions fund not her own benefits, but those of others. As the Social Security Committee of the House of Commons stated in its Third Report of January 1997 (“the Social Security Committee Report”):
  40. “13. The reality is that National Insurance operates as a form of taxation, with the benefits being paid out on a pay as you go basis from a notional fund topped up as required by grants from the Exchequer. The record of contributions still serves as a control for determining the amount of pension payable, but even this principle has been blurred by the introduction of home responsibilities protection and credits, while the availability of means tested Income Support and Housing Benefit has to some extent replaced the old age pension itself as the principal defence against poverty in old age.”
  41. The rates and levels of contributions are set each year to ensure so far as practicable that the overall income to the NIF is sufficient to pay for the various benefits. When necessary, the income from contributions is supplemented by a Treasury grant, i.e. from general taxation. The current contribution rates naturally do not include an allowance for uprating all retirement pensions paid to those who have chosen to reside abroad. Given the amount required to fund payment of pension uprating to those living in South Africa, New Zealand, Australia and Canada, it follows that, if uprating were applicable to their pensions, either contributions would have to be increased or the additional cost financed out of other taxation. (I ignore, for present purposes, the possibility of borrowing to fund the cost.)
  42. Provision could be made by UK legislation for the payment of uprated pensions to pensioners living abroad without the necessity of any reciprocal agreement with their country of residence. In practice, however, uprated pensions are paid only to those living in countries with which the UK Government has entered into a reciprocal agreement requiring their payment.
  43. According to the DSS Memorandum on the uprating of state retirement pensions payable to people resident abroad submitted to the Social Security Committee of the House of Commons:
  44. “17. The main purpose of reciprocal agreements so far has been to provide a measure of social protection for workers, and the immediate members of their families, when moving from one to country to the other during their working lives. In effect, they generally prevent such workers from having to contribute to both countries’ Social Security schemes at the same time while ensuring that they retain benefit cover from either one country or the other. On reaching pensionable age, such workers who have been insured in two or more countries’ schemes can receive a pension from each which reflects the amount of their insurance in each.
    18. Whether a reciprocal Social Security agreement with another country is entered into depends on various factors, among them the numbers of people moving from one to the other, the benefits available under the other country’s scheme, how far reciprocity is possible and the extent to which the advantages to be gained by an agreement outweigh the additional expenditure likely to be incurred by the UK in negotiating and implementing it. Where an agreement is in place, the flow of funds may differ depending on the level of each country’s benefits and the number of people going in each direction.
    19. Since June 1996, the Government’s policy has been that future reciprocal agreements should normally be limited to resolving questions of liability for social security contributions.”
  45. Between 1948 and 1992 the UK entered into reciprocal social security agreements with a number of foreign states. With one minor exception, the agreements entered into after 1979 fulfilled earlier commitments made by the UK Government. Agreements with Australia, New Zealand and Canada came into force in 1953, 1956 and 1959 respectively, but these did not require payment of uprated pensions. The agreement with Australia was terminated by it with effect from 1 March 2001, because of the refusal of the UK Government to pay uprated pensions to its pensioners living in Australia.
  46. Uprating has never been applied to those living in South Africa, or indeed to the residents of any of Australia, Canada and New Zealand. They have never had a statutory entitlement to uprating of their pensions. According to the Social Security Committee Report:
  47. “It is impossible to discern any pattern behind the selection of countries with whom bilateral agreements have been made providing for uprating.”
  48. The EC Regulations on Social Security for Migrant Workers require uprating of benefits throughout the European Union. In practice, the entry of the UK into the EC had little effect on the provision for uprating pensions in the Member States, because there were pre-existing reciprocal agreements with all of them except Denmark providing for their payment.
  49. A responsible UK Minister has admitted that there is no consistent or coherent pattern for these differences other than the intention to save cost. The then Minister of State, Mr Jeff Rooker, stated in the House of Commons on 13 November 2000:
  50. “I have already said I am not prepared to defend the logic of the present situation. It is illogical. There is no consistent pattern. It does not matter whether it is in the Commonwealth or outside it. We have arrangements with some Commonwealth countries and not with others. Indeed, there are differences among Caribbean countries. This is an historical issue and the situation has existed for years. It would cost some £300 million to change the policy for all concerned…”
  51. The cost of comprehensive uprating would presumably now exceed that figure of £300 million. The 1996 DSS Memorandum stated:
  52. “11. Agreeing to additional expenditure on pensions paid overseas would be incompatible with government’s policy of containing the long term costs of the social security system to ensure that it remains affordable.
    12. In June and July 1995, during the passage of the Pensions Bill, amendments were tabled in both Houses calling for upratings to be paid. All were defeated by large majorities.”
  53. According to the evidence filed on behalf of the Secretary of State:
  54. “Successive Governments have taken the view that the level of increases in retirement pensions relates to conditions in the UK and that it would not be right to impose an additional burden on contributors and taxpayers in the UK in order to pay pension increases to people who have chosen to become resident elsewhere in the world.”

    State practice

  55. There is relatively little material before me to show the practice of other states in relation to payment of pensions to ex-patriots. Information contained in the appendix to the DSS Memorandum was drawn from a 1993 research report, and is set out as annex 2 to my judgment (supplemented, in the case of Australia, by the information in paragraph 27 of the Memorandum). It will be seen that there was no consistent practice among the seven states referred to.
  56. The United Kingdom is the only OECD country that discriminates between pensioners in different overseas countries.
  57. Convention rights

  58. The parties’ submissions referred to above reflect the jurisprudence of the European Court of Human Rights and the decisions and opinions of the Commission, to which I refer below. The European jurisprudence was reviewed by Moses J in Hooper and ors v Secretary of State for Work and Pensions [2002] EWHC 191 (Admin) and Wilson J in The Queen on the application of Reynolds v Secretary of State for Work and Pensions [2002] EWHC 426 (Admin), and I do not propose to consider all of the material that has been put before me.
  59. In Alconbury [2001] 2WLR 1389, Lord Slynn of Hadley said at paragraph 26:
  60. “Although the Human Rights Act 1998 does not provide that a national court is bound by these decisions it is obliged to take account of them so far as they are relevant. In the absence of some special circumstances it seems to me that the court should follow any clear and constant jurisprudence of the European Court of Human Rights. If it does not do so there is at least a possibility that the case will go to that court, which is likely in the ordinary case to follow its own constant jurisprudence.”

    Decisions of the Commission are not of the same level as those of the Court. Where, however, there is a clear and constant line of decisions of the Commission that are not inconsistent with those of the Court, good reason is required if this Court is to decline to follow them.

  61. The starting point is the opinion of the Commission in Müller v Austria (App. No. 5849/72, Comm. Report 1.10.75, 73 DR 19). The position was subsequently helpfully summarised by the Commission in T v Sweden (App. No. 10671/83) (1986) EHRR 269:
  62. “The Commission recalls its constant case-law, according to which the right to a pension is not as such guaranteed by the Convention. At the same time 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).”
  63. In X v Italy (App. No. 7459/76), the Commission rejected as manifestly ill-founded a claim of infringement of Article 1 of the First Protocol on the basis that the applicant had not satisfied the requirements under his domestic law for the payment of a pension.
  64. JW and EW v UK (App. No. 9776/82) was the first of the cases in which the Commission considered a complaint that the UK Government’s failure to pay an uprated pension infringed the pensioner’s Convention rights. The applicants were emigrating to Australia. The Commission rejected the complaint as inadmissible. In view of the relevance of their decision I shall set out the reported extract in full.
  65. “3. The Commission has considered the applicants’ complaint under Article 1 of the Protocol. It first recalls that it has previously held that although this provision does not as such guarantee a right to a pension, the right to benefit from a social security system to which a person has contributed may in some circumstances be a property right protected by it. However the Commission also held that Article 1 does not guarantee a right to a pension of any particular amount, but that the right safeguarded by Article 1 consists, at most, “in being entitled as a beneficiary of the social insurance scheme to any payments made by the fund” (App. No. 5849/72, Müller v. Austria, D.R 3, p.25 at p. 31). It has further held that before the right to benefit protected by Article 1 can be established, it is necessary that the interested party should have satisfied domestic legal requirements governing the right (App. No. 7459/76, X. v. Italy, D.R. 11, p. 114).
    In the present case when the applicants emigrate to Australia their entitlement to benefit from the United Kingdom pension scheme will come to be regulated by different rules of domestic law, under which they will cease to qualify for payment of future pension increases contemplated by the relevant legislation. To that extent they will not satisfy domestic legal requirements to benefit from the United Kingdom pension scheme. Even if the right to benefit from a scheme will normally also apply to the regular increases this is not necessarily the case where a person leaves the country where the specific scheme operates. The Commission notes that in many countries specific restrictions as to the payment of social security benefits to foreign countries exist or have existed (cf. App. No. 6572/74 X. v. Federal Republic of Germany, D.R. 8, p. 70). In the Commission’s view such operation of domestic law does not amount to a deprivation of possessions infringing Article 1 of the Protocol and there is thus no appearance of any breach of this provision.
    4. The Commission has nevertheless further considered the applicants’ complaints in the light of Article 14 of the Convention which provides that enjoyment of Convention rights shall be secured without discrimination. In this respect it notes that one element of the applicants’ complaint appears to be that they will receive less favourable treatment under the United Kingdom pension scheme than would other persons who have paid the same contributions but who have remained in the United Kingdom or emigrated to other countries. The Commission has therefore considered whether such differential treatment could amount to discrimination in the enjoyment of their rights under Article 1 of the Protocol contrary to Article 14.
    The Commission notes that it is a common feature of international life that social security agreements are entered into between different countries for the purpose of regulating the rights of persons moving from one country to another under the social security systems of each country. Such agreements commonly provide for the substitution, to a greater or lesser degree, of benefits under one system for those due under another. Under the Agreement between the United Kingdom and Australia the applicants’ rights under the United Kingdom social security scheme are to some extent restricted and replaced by certain rights under the Australian scheme. The applicants, in their particular circumstances, will apparently be less well off than they would have been if they had remained in the United Kingdom or if they had gone to certain other countries. However it is almost inevitable that where a person in effect changes over from one social security system to another, he may find that his entitlements differ from those of persons in other countries. Depending on the circumstances such differences may or may not favour the individual. Furthermore the Commission notes that the applicants will only lose the benefit of future increases in their pensions, whose purpose broadly speaking is to compensate for rises in the cost of living in the United Kingdom. Given that they will not be living in the United Kingdom it appears reasonable that this element in their pension rights in particular should be replaced by the possibility of benefiting under the system of the country they are moving to.”
  66. There is no longer a social security agreement between Australia and the UK, and there has never been an agreement with South Africa. However, I do not read the Commission’s decision as depending on the existence of such an agreement. That this interpretation of the decision is correct is confirmed by the next decision of the Commission to which I must refer.
  67. Two years after its decision in JW and EW v UK, the Commission considered another complaint as to the Government’s failure to pay uprated pensions, this time by an applicant who had emigrated to South Africa. In Corner (App. No. 11271/84), the Commission rejected as manifestly ill-founded the complaint that the failure to pay uprating infringed Article 1 of the First Protocol and Article 14. (There was also a complaint of breach of Article 2 of Protocol 4, but this was rejected because the UK had not ratified that Protocol.) The Commission stated:
  68. “The Commission recalls that it has previously held that, although Article 1 of Protocol No. 1 does not, as such, guarantee a right to a pension, the right to benefit from a Social Security system to which a person has contributed may, in some circumstances, be a property right protected by it. … However, the Commission has also held that Article 1 does not guarantee a right to a pension of a particular amount, but that the right safeguarded by Article 1 consists, at most, “in being entitled as a beneficiary of the social insurance scheme to any payments made by the fund” (Dec. No. 5849/72, 1.10.75, D.R. 3 p. 25 at p. 31) in accordance with domestic legal requirements (Dec. No. 7459/76, 5.10.77, D.R. 11 p. 114). Further, the Commission has held that the “freezing” of a pension at a particular level when a person leaves the United Kingdom does not amount to a deprivation of possessions infringing Article 1 of the Protocol. (Dec. No. 9776/82, 10.83 to be published in D.R. 34). Moreover, the different treatment of persons entitled to pensions who remain in the country of payment compared with those who emigrate is justified on the grounds that the applicant will only lose the benefit of future increases in the pension, whose purpose broadly speaking is to compensate for rises in the cost of living in the United Kingdom and which the applicant will not have to endure (Dec. No. 9776/82, loc. cit.). The Commission also considers that the economic state of third countries is not a matter which domestic pension authorities should be obliged to consider.”
  69. It is difficult to distinguish the present case from Corner, which if correct is fatal to the Claimant’s case. Moreover, Corner, unlike JW and EW v UK, cannot be explained on the basis of the reciprocal agreement between the UK and Australia. However, it and other pre-1996 decisions must be reconsidered in the light of the judgment of the European Court of Human Rights in Gaygusuz v Austria (1996) 23 EHRLR 230. The Applicant was a Turkish national resident in Austria. The Austrian Government had refused to pay him emergency assistance, a social security benefit, entitlement to which depended on the payment of contributions into the state unemployment insurance fund. Austrian law confined entitlement to emergency assistance to Austrian nationals. Since the applicant had no right to benefit under Austrian law, the Austrian Government contended that he had no right within the scope of Article 14. The Court held that the Austrian Government had acted in breach of Article 14 taken in conjunction with Article 1 of the First Protocol. It said:
  70. “41. The Court considers that the right to emergency assistance in so far as provided for in the applicable legislation – is a pecuniary right for the purposes of Article 1 of Protocol No. 1 (P1-1). That provision (P1-1) is therefore applicable without it being necessary to rely solely on the link between entitlement to emergency assistance and the obligation to pay “taxes or other contributions”.
    Accordingly, as the applicant was denied emergency assistance on a ground of distinction covered by Article 14 (art. 14), namely his nationality, that provision (art. 14) is also applicable (see, among other authorities, mutatis mutandis, the Inze v. Austria judgment of 28 October 1987, Series A no. 126, p. 18, para. 40, and the Darby v. Sweden judgment of 23 October 1990, Series A no. 187, p12, para. 30).
    B. Compliance with Article 14 of the Convention taken in conjunction with Article 1 of Protocol No. 1 (art 14+P1-1)
    42. According to the Court’s case-law, a difference of treatment is discriminatory, for the purposes of Article 14 (art. 14), if it “has no objective and reasonable justification”, that is if it does not pursue a “legitimate aim” or if there is not a “reasonable relationship of proportionality between the means employed and the aim sought to be realised”. Moreover the Contracting States enjoy a certain margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment. However, very weighty reasons would have to be put forward before the Court could regard a difference of treatment based exclusively on the ground of nationality as compatible with the Convention.
    45. The Austrian Government submitted that the statutory provision in question was not discriminatory. They argued that the difference in treatment was based on the idea that the State has special responsibility for its own nationals and must take care of them and provide for their essential needs. Moreover, sections 33 and 34 of the Unemployment Insurance Act laid down certain exceptions to the nationality condition. Lastly, at the material time, Austria was not bound by any contractual obligation to grant emergency assistance to Turkish nationals.
    46. The Court notes in the first place that Mr Gaygusuz was legally resident in Austria and worked there at certain times (see paragraph 10 above), paying contributions to the unemployment insurance fund in the same capacity and on the same basis as Austrian nationals.
    50. The Court ... finds the arguments put forward by the Austrian Government unpersuasive. It considers, like the Commission, that the difference in treatment between Austrians and non-Austrians as regards entitlement to emergency assistance, of which Mr Gaygusuz was a victim, is not based on any “objective and reasonable justification”.
    51. Even though, at the material time, Austria was not bound by reciprocal agreements with Turkey, it undertook, when ratifying the Convention, to secure “to everyone within [its] jurisdiction” the rights and freedoms defined in section I of the Convention.
    52. There has accordingly been a breach of Article 14 of the Convention taken in conjunction with Article 1 of Protocol No. 1 (art. 14+P1-1).”
  71. The fact that the Court did not find a breach of Article 1 of the First Protocol taken alone supports the view that a pecuniary right that may qualify as a possession for the purposes of that provision is defined by domestic law, in that case the law of Austria. A person who does not qualify for that right under domestic law is not “deprived” of it for the purposes of that Article. However, Gaygusuz establishes that a domestic law that disqualifies an individual from enjoyment of a pecuniary right of a kind protected by Article 1 of the First Protocol on grounds prohibited by Article 14 without objective and reasonable justification infringes Article 14.
  72. The second sentence of paragraph 41 of the Court’s judgment is framed in not untypical Delphic terms. It is unnecessary for me to decide what the Court intended to lay down, but I read it as holding that a state benefit may be a pecuniary right protected by Article 1 of the First Protocol even if it is not a contributory benefit entitlement to which is conditional on compulsory payment of a tax or other contribution. This is logical. There would be some logic in restricting Article 1 to pecuniary rights derived from a defined investment funded by individual contributions. In such a case the right is a true right of property. 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. In a case such as the present, the payment of benefit does not create a right of property in any real sense. The earlier decisions of the Court following Gaygusuz indicated that my reading was incorrect (see Skorkiewicz, Coke and Bellet v France (App. no. 4083332/98)), and Moses J and Wilson J similarly held that non-contributory benefits were outside the scope of Article 1 of the First Protocol in Hooper and in Reynolds. However, in Walden v Liechtenstein (Decision no. 33916/96) (a decision on admissibility only) the Court held that a non-contributory pension was protected by Article 1 of the First Protocol. In Shackell v UK (App No. 4585/99), the Court rejected the applicant’s complaint as manifestly ill-founded, but in the course of doing so was prepared to assume that a non-contributory social security benefit was a pecuniary right for the purposes of Article 1 of the First Protocol. In Matthews v United Kingdom (App. No. 40302/98) (also a decision on admissibility only), the Court held that an allegation of discrimination on grounds of gender in relation to a bus pass, a non-contributory benefit, “raises complex issues under Article 14 of the Convention and Article 1 of Protocol No. 1 taken together”.
  73. 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:
  74. “… 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.”
  75. In the present case, UK legislation has never conferred a right on the Claimant to the uprating of her pension while she lived in South Africa. She does not satisfy and has never satisfied the conditions for payment of an uprated pension. She has never had a right to an uprated pension. There can therefore be no question of her having been deprived of any such right.
  76. 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. I also do not have to consider Mr Eadie’s submission that the claim under Article 1 of the First Protocol must fail because that provision does not guarantee payment of a pension of any particular amount, and the Claimant has not been deprived of the substance of the right. I do not find the distinction between loss of part of a sum payable by reason of a pecuniary right and impairment of the substance or essence of the right (see Jankovic v Croatia Dec. no. 43440/98) an easy one.
  77. I therefore turn to consider the allegation of breach of Article 14 read with Article 1 of the First Protocol.
  78. Article 14 read with Article 1 of the First Protocol

    The questions to be considered

  79. In Michalak v London Borough of Wandsworth [2002] EWCA Civ 271, Brooke LJ said:
  80. “It appears to me that it will usually be convenient for a court, when invited to consider an Article 14 issue, to approach its task in a structured way. For this purpose I adopt the structure suggested by Stephen Grosz, Jack Beatson QC and the late Peter Duffy QC in their book Human Rights: The 1998 Act and the European Convention (2000). If a court follows this model it should ask itself the four questions I set out below. If the answer to any of the four questions is “no”, then the claim is likely to fail, and it is in general unnecessary to proceed to the next question. These questions are:
    (i) Do the facts fall within the ambit of one or more of the substantive Convention provisions…?
    (ii) If so, was there different treatment as respects that right between the complainant on the one hand and the other persons put forward for comparison (“the chosen comparators”)?
    (iii) Were the chosen comparators in an analogous situation to the complainant’s situation?
    (iv) If so, did the difference in treatment have an objective and reasonable justification: in other words, did it pursue a legitimate aim and did the differential treatment bear a reasonable relationship of proportionality to the aims sought to be achieved?”
  81. As I indicated in paragraph 15 above, in my judgment, there is a fifth question to be considered, although it may well be that Brooke LJ intended it to be encapsulated in his question (iii). That question is: is the basis for the different treatment of the complainant as against that of the chosen comparators based on “any ground such as sex, race, colour, language…or other status” within the meaning of Article 14? Differences in treatment based on other factors are not discriminatory for the purposes of Article 14: see, for example, the decision of the Commission in P v UK (App. No. 14751/89) and those referred to in paragraph 55 below.
  82. (i) Do the facts fall within the ambit of a substantive Convention provision?

  83. The answer is clearly Yes: the present claim falls within the ambit of Article 1 of the First Protocol. The applicant in Gaygusuz succeeded although he had no right under Article 1 of the First Protocol. It follows from the decision of the Court in that case that Article 14 read with Article 1 of the First Protocol applies equally in the present case.
  84. (ii) Is there any different treatment as respects that right between the Claimant and her chosen comparators?

  85. Again, the answer clearly is in the affirmative.
  86. (iii)(a) Is the basis for the different treatment of the Claimant and the chosen comparators a ground within the scope of Article 14?

  87. Mr Eadie initially submitted that differences in the countries where people live are not differences in status. Persons who are in different places may be treated differently, and the differences in treatment do not amount to discrimination. He relied on the decisions of the Commission in Nelson v United Kingdom (App. No. 11077/84), in which the different treatment of offenders in Scotland and England was held not to be discriminatory, and in Murray v United Kingdom (1996) 22 EHRR 29, in which different treatment of detained suspects in Northern Ireland and in England was held not to be discriminatory. However, these are very different cases from the present. Regional differences, resulting from different bodies having jurisdiction, cannot be discriminatory: it seems to me that discrimination does not arise where different regions apply different rules without discrimination to all those within the region.
  88. In the present case, there is only one set of rules, namely the UK pensions legislation, and it applies differently to persons depending on their residence and presence abroad. A person ordinarily resident in Great Britain is entitled to her uprated pension even if absent (by definition temporarily) from this country. A person who is not ordinarily resident in Great Britain is not entitled to an uprated pension unless she is present in this country: Regulation 5 of the 1975 Regulations, as applied by Regulation 3 of the 2001 Up-rating Regulations, both of which are set out in Annex 1 to this judgment.
  89. Residence applied as a criterion for the differential treatment of citizens is in my judgment a ground within the scope of Article 14. Like domicile and nationality, it is an aspect of personal status. Indeed, having discovered the judgment of Darby v Sweden (1991) 13 EHRR 774, in which differential treatment on the ground of residence outside Sweden was held to infringe Article 14, Mr Eadie conceded the applicability of Article 14. Under UK legislation, a person is not entitled to have his pension uprated if he is ordinarily resident elsewhere. Ordinary residence is a ground of the kind referred to in Article 14.
  90. In these circumstances, I do not have to decide whether temporary presence in a location, by itself, not amounting to residence, is a ground of differential treatment that is within the scope of Article 14.
  91. (iii)(b) Are the chosen comparators in an analogous situation to the Claimant’s?

  92. Since we are concerned with social security benefits, the comparison must take into account the social and economic circumstances and needs of the chosen comparators.
  93. There are two comparators to consider: persons resident in the UK and those resident in those countries whose UK pensioners receive uprated UK pensions.
  94. So far as the first class of comparators is concerned, persons who live in other countries have different costs of living from those in Great Britain, and live in economies that are subject to different rates of inflation. If a comparison were appropriate, it would be justifiable to compare the cost of living in sterling terms of a foreign pensioner with that in the UK. A pensioner resident abroad may be better off, in real terms, than a pensioner living in Great Britain, because of different local costs of living which are not fully reflected in exchange rates.
  95. While I have no evidence before me, it is notorious that the cost of living in this country is relatively high, and certainly higher than that in South Africa, partly as a result of the equally notorious depreciation of the rand as against, in particular, sterling. The depreciation of the rand has doubtless led to inflation in South Africa in terms of the local currency, and the Claimant’s evidence refers to the facts that inflation and interest rates are higher there than here. However, the purchasing power of her fixed UK pension is not fixed: it depends on the rate of inflation in South Africa and changes in the sterling/rand exchange rate. Importantly, the Claimant does not state that the purchasing power in South Africa of her fixed sterling pension has declined because it has not been uprated; and as mentioned above the uprating so far refused to the Claimant personally is a relatively small sum. Perhaps more fundamentally, she has not compared the cost of living in South Africa with that in the UK. Lastly, she obviously cannot provide a prediction as to whether her cost of living in South Africa will increase in sterling terms.
  96. Similar comments apply to the comparison between the Claimant and those living in other countries.
  97. There are other differences between the circumstances of those resident here and those resident abroad, of which the most obvious in the present context are differences in local social security provision and in local taxation. The Claimant is unfortunate in that South Africa has limited social security provision, or at least did so at the time of the Social Security Committee Report. The position of pensioners in Australia is different: some of them benefit from Australian social security provision, at significant cost to the Australian exchequer. Of the (about) 220,000 UK pensioners in Australia, 158,000 qualify for an Australian pension, which is payable to those who have been resident in Australia for at least 10 years and have reached retirement age, and have less than a specified income. The position of pensioners in New Zealand, as described in the 1996 DSS memorandum, is different again: under the reciprocal agreement between the UK and New Zealand, periods of residence in the UK are treated as periods of residence in New Zealand. As a result, UK pensioners living in New Zealand qualify for New Zealand pensions (called superannuation), less the amount of their UK pensions, by reason of their residence here or there. Increases in their UK pensions would result in an equivalent reduction in their New Zealand pensions.
  98. 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.
  99. The differences between the situation of UK pensioners living abroad and those here led to the decisions of the Commission in JW and EW and Corner. The hope that Gaygusuz transformed the legal position of persons in the position of the Claimant would have been disappointed by the decision of the Commission in Havard (App. No. 38882/97) rejecting the complaint as inadmissible. The written decision of the Commission does not disclose anything meaningful about Mr Havard’s complaint or the reasons for its being declared inadmissible, but it is common ground that Mr Havard is a UK state pensioner living in Australia, was president of the British Australia Pensioner Association, gave evidence to the House of Commons Social Committee (referred to at paragraphs 14 and 33 of their Report), and that his complaint to the Commission was that the UK Government had failed to pay him an uprated pension. The Commission found that “in so far as the matters complained of are within its competence, the Committee (of the Commission) finds that they do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols”. 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 have liked to see the report and information referred to in the decision. I should like to think that the reasons of the Commission were similar to those set out above. As appears from what I have stated above, in my judgment the failure of the applications in JW and EW and Havard did not depend on the existence of the then bilateral agreement between Australia and the UK, but on a more fundamental obstacle to their success, as the decision in Corner indicates. In neither of the earlier cases was the position of the applicant compared with that of pensioners in countries where uprating is paid. For reasons I have given, I do not think that this makes their conclusions unreliable.
  100. It follows that the Claimants’ claim fails. In case I am wrong on this issue, however, I shall address the question of justification.
  101. (iv) Is there an objective and reasonable justification?

  102. On this issue, it is important to take into account that the Court is concerned with two areas of government in which it is clear that the judicial arm must give the greatest deference to the legislature and to the elected executive. The first concerns the allocation of resources: how much is to be raised by the Government, by taxation or otherwise, and how the moneys available for expenditure by the Government are to be spent. Those matters are not justiciable. In a different context, in Kebilene [2000] 2 AC 326, Lord Hope of Craighead said, at 381:
  103. “In this area difficult choices may have to be made by the executive or the legislature between the rights of the individual and the needs of society. In some circumstances it will be appropriate for the courts to recognise that there is an area of judgment within which the judiciary will defer, 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.”

    These words were applied to the distribution of state benefit by Laws LJ (with whom the other members of the Court of Appeal agreed) in Waite v London Borough of Hammersmith & Fulham an another [2002] EWCA Civ 482, at paragraphs 36 and 37. At paragraph 37, Laws LJ said:

    “… the distribution of state benefit lies peculiarly within the constitutional responsibility of elected Government.”

    In Steele Ford & Newton v CPS [1994] 1 AC 22, Lord Bridge referred, at 33E, to:

    “… the special constitutional convention which jealously safeguards the exclusive control exercised by Parliament over both the levying and the expenditure of the public revenue.”
  104. I should also refer the Social Security Committee Report:
  105. “The allocation of scarce resources and the language of priorities are what politics and government are all about. It is not a question of first reaching a moral judgement about the rights and wrongs of the expatriates’ case, and then deciding whether or not this country can afford to do anything about it. The decision about whether public expenditure on state retirement pensions should be increased in future by paying uprating increases which are not required by law at the moment is a political question which includes, but is not distinct from, the moral questions. Ultimately, it must be for the House to decide, and that is our concluding recommendation: That there should be a free vote at prime time to allow Members to express their opinion on the principle of whether the Government should pay upratings to some or all of those pensioners living in countries where upratings are not paid at present.”
  106. The second area is that of foreign relations. Where uprated pensions are paid to expatriate pensioners, at present that is done either by virtue of the obligations imposed on members of the EU or pursuant to bilateral agreements between HM Government and the Government of the country in which the expatriates in question live. The Court will not embark on questions whether it is or is not in the public interest for such agreements to be entered into: see Blackburn v Attorney-General [1971] 1 WLR 1037; the International Tin Council litigation, culminating in J H Rayner (Mincing Lane) Ltd v Department of Trade and Industry [1990] 2 AC 418; Brunswick (Duke of) v. King of Hanover (1844) 6 Beav. 1; (1848) 2 H.L. Cas. 1, H.L. (E.). Such questions are, in English Law, the paradigm of questions that are non-justiciable. Although the payment of uprated pensions to expatriates does not require any agreement with their country of residence, relations with those countries are clearly involved, as the intervention of Australia in the present case demonstrates.
  107. 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: Mellacher v Austria [1989] 12 EHRR 391, at paragraphs 45 and 54, helpfully cited by Moses J in Hooper at paragraph 102.
  108. The fundamental question is whether the UK Government may lawfully restrict uprating of pensions to pensioners within Great Britain. 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. If it were, the Claimant would have a right protected by Article 1 of the First Protocol; but I have held that she has no such right. What I am concerned with, therefore, is the scope of entitlement to a form of state benefit.
  109. 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, leaving the care and support of those who live elsewhere to the governments of the countries in which they live. 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. The lack of consistency in state practice indicates that there is no single right decision to be made as to the payment of pensions to those who go to live abroad. It is also difficult to criticise the position of the government if the limitation on the benefit has been published for some time, so that those who have gone to live abroad did know, or could easily have ascertained it, before deciding to live abroad. That is the case in relation to pensions.
  110. Similarly, I think that the government is entitled to consider the payment of uprated pensions to those living abroad on a country-by-country basis, taking into account the interests of this country in each case. I do not think that payment of uprated pensions to pensioners in any one foreign country (or several) is converted, by Article 14, into an obligation to pay uprated pensions to all pensioners living abroad: yet this is the effect of the Claimant’s submissions. It would be curious indeed if Article 14 were to compel the government to pay uprated pensions to those living abroad irrespective of any countervailing benefit offered by their countries of residence, yet again that would be the effect of the Claimant’s case. The accepted illogicality of the present position is the result of agreements providing for payment of uprated pensions having been entered into with some countries, but not others, at a time when governmental policy was different from the present policy. The Social Security Committee Report states at paragraph 25 how this change of policy excluded pensioners in Canada from uprating:
  111. “An opportunity was missed in 1972 to reach agreement with Canada which would have provided for upratings to be paid. The UK’s proposal of a comprehensive agreement foundered because of difficulties on the part of Canada. By the time these were sorted out, the UK’s position had moved on and uprating was no longer on offer.”

    This emphasises both the political nature of the decisions involved and the relative complexity of the issues, and shows how the illogicality has arisen.

  112. Mr Drabble stated that there is no record of a policy decision underlying the present scheme, and no record of a reasoned debate. The matter has certainly been before Parliament: see paragraph 12 of the DSS Memorandum cited above. There is a record of the policy for the refusal to extend payment of uprated pensions: see paragraphs 33 and 34 above. 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.
  113. Conclusions

  114. In my judgment, the remedy of the expatriate United Kingdom pensioners who do not receive uprated pensions is political, not judicial. The decision to pay them uprated pensions must be made by Parliament.
  115. For the reasons set out above, this claim for judicial review will be dismissed.
  116. - - - - - - - - - - - - -

    MR JUSTICE STANLEY BURNTON: My judgment has been distributed in draft. I am grateful to counsel for their corrections. For the reasons set out in my judgment, which are the same as those I have set out in the draft, I have come to the conclusion that this application must be dismissed. Copies of the judgment are available for members of the public and the press.

    Yes, Mr Eadie?

    MR EADIE: My Lord, I anticipate there are two matters that your Lordship will have to deal with this morning. First, there is my application for costs. The second of them is an application by my learned friend Mr Hunt on behalf of Miss Carson for permission to appeal.

    MR JUSTICE STANLEY BURNTON: What do you say about that application?

    MR EADIE: As far as that is concerned, I say nothing. It is a matter entirely for your Lordship whether to grant permission to appeal. Your Lordship is in possession of the facts and indeed has just given judgment, and nothing I say, I anticipate, will assist on that issue.

    MR JUSTICE STANLEY BURNTON: I anticipated that there would be an application for permission to appeal. In my judgment this is a case in which permission should be given, and I give it.

    MR EADIE: I am grateful.

    My Lord, that leaves only costs. As I understand it, the issue that divides my learned friend and myself is this. My learned friend, as I understand it, will say that this litigation was, in effect, a public interest litigation. The result of that, so he says, is that there should be no order as to costs. My position, on the other hand, is it is not.

    MR JUSTICE STANLEY BURNTON: You have seen his written submissions?

    MR EADIE: My Lord, I have. I received them very shortly before court, but my learned friend was kind to ring me to say he was taking the point. So nothing turns a great deal on that. I hope my Lord has received by fax from me a copy of the tail-end of a judgment in a case called Smeaton, which was a 'morning after pill' case, in which --

    MR JUSTICE STANLEY BURNTON: Mr Hunt's submissions were timed at 0944 this morning and your fax was at 0930.

    MR EADIE: It followed a telephone message at about 0845, so the sequence is now complete.

    My Lord, knowing he was going to be taking a point based on a Child Action Poverty Group case, it seemed appropriate to draw this decision to your Lordship's attention.

    MR JUSTICE STANLEY BURNTON: I have not seen the judgment before, but I am aware of the case.

    MR EADIE: My Lord, it was in two parts. You will see that the decision itself starts at paragraph 399, which gives some indication of the length of the earlier part of the judgment. The long and short of the earlier part of the judgment was to reject --

    MR JUSTICE STANLEY BURNTON: Mine feels quite modest in comparison.

    MR EADIE: The substance of what had gone before was, in effect, to reject the application for judicial review.


    MR EADIE: It was an application to declare unlawful, in effect, the morning after pill.


    MR EADIE: And Mumby J concluded that the regulation taking it off the 'prescription only' medicine bracket was not unlawful for a variety of reasons, not the least of which was it did not infringe the criminal law. The argument was that the prescription of that morning after pill or the taking of it would have amounted to the commission of a criminal offence under the Offences Against the Person Act. That application was rejected.

    There was then a separate hearing to deal with permission to appeal and with costs. Your Lordship will see the --

    MR JUSTICE STANLEY BURNTON: This is a reserved judgment?

    MR EADIE: This was a reserved judgment following that further hearing. I hope I have sidelined the relevant bits; and perhaps the sensible thing would be for your Lordship to read those bits to yourself.

    MR JUSTICE STANLEY BURNTON: Should I not hear what Mr Hunt has to say? He can refer me to the relevant parts and come back. The impression I have from the judgment - let me put it on the table - is that Mumby J did not consider that the fact that litigation is public interest litigation of itself justifies the departure from the normal rule.

    MR EADIE: My Lord, yes. Some little more nuance than that. In effect he says that it is at large and he pointed to a large number of factors, but he particularly relied upon, although not conclusively, but he particularly relied upon the facts there that there was no indication that the claimant in that case would suffer dire financial consequences and also particularly relied upon his conclusion that 'SPUC' (Society for the Prevention of the Unborn Child) had a direct interest in the litigation, so did not fall within the category of case, such as the Child Action Poverty Group, where they have no direct interest in the outcome of the litigation.

    MR JUSTICE STANLEY BURNTON: There are some somewhat negative comments on their position in this part of the judgment as persons who have provoked a dispute rather than being immediately involved in it.

    MR EADIE: My Lord, there are. I do not say it is a direct analogy, but whatever else this judgment does about this particular point it does not deny in any shape or form that it is relevant to consider whether or not the particular claimant has a direct (and I would submit particularly a direct) pecuniary interest in the outcome of the litigation.

    MR JUSTICE STANLEY BURNTON: But Mrs Carson's interest in this litigation, in financial terms, is minuscule in comparison with what is the principle involved, or the cost of the principle. One is talking about, I cannot remember what it was now, but it was --

    MR EADIE: £300 million.

    MR JUSTICE STANLEY BURNTON: -- £300 million on one side and a very small sum on the other.

    MR EADIE: That is undoubtedly right, but she stands as the claimant, not quite representing, but very nearly representing, all those others who would make up the £300 million. The one thing your Lordship does not have before you today in any shape or form is any indication that an order for costs would put her in financial difficulty. I do not know what the reason for that is, but it is not very difficult to speculate as to who might be funding this litigation.

    MR JUSTICE STANLEY BURNTON: Again let me put it on the table, the impression I had from the argument was that she was a representative of an association.

    MR EADIE: My Lord, I am not sure it went quite as far as that.

    MR JUSTICE STANLEY BURNTON: That is why I mention it. I mean, that was the impression one got, that there are associations who have been campaigning politically, quite rightly, and in one sense this is a further step. But that is just an impression, which Mr Hunt can dispel.

    MR EADIE: My Lord, yes. Perhaps that may be the convenient way to deal with it: my learned friend makes the point and I can respond.

    MR HUNT: Very briefly. My Lord has received and read the written submissions, I understand?

    MR JUSTICE STANLEY BURNTON: I have. I had to skim them rather than read them.

    MR HUNT: My Lord, yes. In relation to this costs question, quite simply I do not think the public interest nature of the case is in issue.


    MR HUNT: I think it is accepted entirely that not every judicial review challenge is a public interest challenge, but that this is. I think that that is not really in issue. But this case is quite different from the Smeaton case simply because, there, the court made clear it was a campaigning organisation which operated primarily in the political environment or political sphere, picking a fight - "by removing the market of debate into the courtroom" were the courts words. That is quite different from this case, in which Miss Carson was an individual pensioner. She is supported by the South African Alliance of British Pensioners. My instructions are in relation to that organisation that it is comprised entirely of individual South African pensioners and there is no institutional support for Mrs Carson to bring her case. So it is an alliance of individual pensioners who themselves lose out by there being no operating in South Africa.

    MR JUSTICE STANLEY BURNTON: That was the impression I had.

    MR HUNT: My Lord, yes.

    MR JUSTICE STANLEY BURNTON: Although there is no evidence about it, I could not imagine that Mrs Carson was in a position to bring these proceedings and be represented by leading counsel out of her pension.

    MR HUNT: My Lord, yes.

    The nature of that organisation is different from the nature of the organisation in issue in Smeaton, which very much is in the nature of an organisation which has for many years campaigned in the political sphere and occasionally resorts to litigation. The South African Alliance of British Pensioners has, as a last resort, having exhausted lobbying efforts, resorted to litigation. (Inaudible) this is the sole issue that that organisation really could litigate in the courts. So it is quite a distinct situation from the situation in Smeaton itself. Nor is it in any sense manufactured.

    MR JUSTICE STANLEY BURNTON: No, this is a genuine grievance that has existed, as we have seen from the applications to the Commission, for twenty years or more.

    MR HUNT: My Lord, yes. So, my Lord, those simply are our submissions. This is quite different from the position in Smeaton. It would be wrong, given the disproportion between the amount that Miss Carson or even the South African pensioners themselves have at stake compared to that which is at stake for the United Kingdom Government and given the size of the representative class, which is very unusually over 400,000 - and it is accepted that that is the class essentially which will be affected by the outcome of this decision - it would in those circumstances be unjust to visit the costs of the issue being decided in this court on the individual claimant and even on the South African Alliance of British Pensioners, who are all pensioners.

    MR JUSTICE STANLEY BURNTON: From what you tell me, she would not personally bear the burden of an order for costs. That would be borne by the Association.

    MR HUNT: My Lord, those are my instructions, but I do not have specific instructions as to the exact amount of resources available through the South African Alliance of British Pensioners, other than that they are extremely small. So, my Lord, it may be the case - and I am afraid I do not have specific evidence in relation to this question - that if an order for costs were made against Miss Carson (the only person against whom an order for costs can be made if the funds in the South African Alliance of British Pensioners are inadequate), Miss Carson would, of course, be liable for the remainder of the amount.

    MR JUSTICE STANLEY BURNTON: Is that material you would like to put before me?

    MR HUNT: My Lord, I understand it is not material that is available, unfortunately.

    MR JUSTICE STANLEY BURNTON: Is not available?

    MR HUNT: No.

    MR JUSTICE STANLEY BURNTON: And cannot be made available?

    MR HUNT: Can I take instructions on that? The principal submission is that even the South African Alliance of British Pensioners Association itself ought not to be made to bear the costs.

    MR JUSTICE STANLEY BURNTON: I understand that.

    MR HUNT: (Instructions taken.) My instructions are that the Association has £4,000 at its disposal. My instructing solicitor tells me a witness statement to that effect can be provided to the court in relation to any other availability of resources to the Association.

    MR JUSTICE STANLEY BURNTON: Well, there is an element of unreality about this. I have just given permission to appeal to an organisation -- to Mrs Carson and you tell me that it has £4,000 with which to fund an appeal.

    MR HUNT: My Lord, those are my instructions in relation to the amount of funds which are available.

    MR JUSTICE STANLEY BURNTON: There is an inconsistency between ...

    MR HUNT: My Lord, obviously it is not for me to speculate, but if there is to be an appeal, if the Alliance does decide to proceed with an appeal, obviously it will have the question to face as to whether or not it must campaign in order to raise the financing in order to finance an appeal.

    MR JUSTICE STANLEY BURNTON: How many South African pensioners are there; can you remind me? Can you also tell me what the membership of the Association is?

    MR EADIE: (Instructions taken.) My Lord, my instructions are that there are 37,000 South African pensioners and the number in the Association is 7,500.

    MR JUSTICE STANLEY BURNTON: That is your application?

    MR HUNT: My Lord, yes, subject to one further matter. If it troubles my Lord in relation to making no order as to costs at all - and I see my Lord is troubled - my Lord does have within his discretion to make an order for costs which is, of course, less than the full amount of costs and up to a particular sum given that my Lord's discretion is at large. The Legal Services Commission currently, in relation to applications for funding for public interest type cases, is developing an approach whereby it requires those who form a group in order to litigate a particular issue, such as a residents group, to come up with a total amount as demonstrating the earnestness and seriousness of their intent. So they are required to do some fundraising as it were and the Legal Services Commission then provides the remainder. If my Lord thinks that it is not appropriate to make no order as to costs in relation to my principal submission, then it may be appropriate, rather than make a full order, to make some order as to costs but reflect the fact that the Association is very small and has very limited resources and to reflect the fact that the government has won the fight.

    My Lord, those are my submissions in relation to costs.

    MR JUSTICE STANLEY BURNTON: I have no figures in front of me at all, so I have no basis on which I could consider making anything other than an order for costs to go to detailed assessment, or no order.

    MR HUNT: The figure, on instructions, that is available is £4,000. It would be possible to provide evidence of that and for the cost matter to be adjourned to be dealt with on the papers, subject to taking instructions, would be acceptable to the claimant, and then the issue could be resolved without the need for a further hearing, with that evidence being provided to my Lord. Those are my instructions, that £4,000 is available.

    MR JUSTICE STANLEY BURNTON: Thank you very much.

    MR EADIE: Can I start with some basic propositions? The first proposition is, as your Lordship will know well, the general rule is that costs follow the event. That general rule is contained in CPR 44.3.2, which is set out at paragraph 402 of Mumby J's judgment.


    MR EADIE: That starting point is the same in judicial as it is in other cases: see, as authority for that proposition, amongst others, the decision of Dyson J (as he then was) in the Child Action Poverty Group cases, the relevant bits of which are set out and quoted at paragraph 413 and 414.

    Public interest litigation has been defined by Lord Woolf first of all in New Zealand Maori, see paragraph 411 of that judgment:

    "There remains the question of costs. Although the appeal is to be dismissed, the applicants were not bringing the proceedings out of any motive of personal gain. They were pursuing the proceedings in the [broader] interest as it were of taonga..."

    And going on on the same point into the judgment of Dyson J at 413, "I should start by explaining" - this is the beginning of the quote at 413:

    "I should start by explaining what I understand to be meant by a public interest challenge. The essential characteristics of a public law challenge are that it raises public law issues which are of general importance, where the applicant has no interest in the outcome of the case."

    My Lord, I do not advance that as being conclusive against this being a public interest type case, but what I do say is that it is a relevant and material factor for your Lordship to take into account in the exercise of the discretion, which I accept is at large, as to whether or not to make no order as to costs or some order as to costs. It is relevant whether the person concerned is genuinely seeking to litigate an uncertain point of law in the public interest or whether there is a personal/pecuniary motive lying behind, however small or large that might be; and my Lord and I have had the exchange on that.

    So a variety of factors to which we point in this case are, first of all, on any view Miss Carson and those members of the South African Pensioner Association, and, indeed, those pensioners more broadly whose interest she advanced herself as protecting or forwarding, they are not in that pure category of public interest cases of the kind identified by Dyson J and Lord Woolf in those two passages. There is a personal gain motive here. So one is not even in the position that sparked the claim in their unsuccessful application for the same sort of order in Smeaton.

    The second point is that there is now, at the very eleventh hour, some sort of suggestion that they might be in financial difficulty if the usual order for costs might be made. My Lord is left in an unsatisfactory position. It may be that my learned friend can now say this morning for the first time that there is only £4,000 in the kitty, as it were, but it did not take much probing from my Lord to identify that that was not actually the relevant question. The relevant question is: is there access to those funds? To which the answer is plainly 'yes'. Now the costs of this litigation are going to be -- they are not going to be astronomic. We are not talking about a full-blown lengthy trial or anything of that kind. It was a two day judicial review. The costs are not going to be insignificant, but they is no suggestion that they are going to be off the scale of what would properly and legitimately be raised. As my Lord pointed out, my learned friend cannot have his cake and eat it. He cannot on the one hand turn up before this court and say: 'I want permission to appeal,' where, no doubt, Miss Carson and those she represents would be represented by the same distinguished team; and on the other hand say: 'I am terribly sorry, we only have £4,000 in the kitty, so some sort of finite order should be made.' It is difficult to see what instructions my learned friend could get, beyond speculating or beyond self-serving evidence, to say it might not be possible to raise the requisite funds. It plainly is possible because permission to appeal has been sought, and there is every indication he intends to pursue that. It plainly is possible for her to raise the funds required for her distinguished team, including leading counsel, to take this case to the Court of Appeal. In those circumstances there is no reason, in my submission, for making any order, other than the usual and appropriate order which is that costs follow the event.

    I do not know whether my Lord would like me to deal with the suggestion that there should be some finite limit.

    MR JUSTICE STANLEY BURNTON: I have no figures at all.

    MR EADIE: That is the point. My Lord cannot speculate.

    MR JUSTICE STANLEY BURNTON: So I am unable to deal with that. Thank you very much.

    MR HUNT: Very briefly in reply; in terms of the size of the class affected, the number is really very small in relation to the total size of the class - a sixtieth of the class will be expected to bear the costs. In relation to how an appeal might be funded, that, in my submission is irrelevant to my Lord's decision. That a question for the future in relation to the Association. If the government is troubled, opportunity to apply for security for costs is open to it, or the opportunity for applying for a preemptive costs order against the claimant on appeal. Those are all matters for the future. The only question for my Lord is whether it is just, given the difference in the position between the Association on the one hand and the government on the other, the importance of the issues, the importance of the legal question and the uncertainty and the public interest in having it decided, it is just to visit the costs of these proceedings on the Association. My Lord, that is what I say.

    MR JUSTICE STANLEY BURNTON: Thank you very much.


    MR JUSTICE STANLEY BURNTON: There is an issue which I have to determine as to whether an order for costs should be made against Mrs Carson in the present proceedings. The normal order, as has been said and is accepted, is that costs follow the event, that is to say the unsuccessful party pays the costs of the successful party. Therefore, if I were to follow the normal order, I should make an order that Mrs Carson pay the Secretary of State's costs, to go to a detailed assessment. I am urged not to follow that course, having regard to (1) the fact that these proceedings are a matter of wide public importance and general interest, and (2) the relatively small amount of benefit which Mrs Carson herself stands to gain from success in these proceedings as against not only the general amount involved but the position of Her Majesty's Government, which stands, if unsuccessful, to be liable to pay a very large sum indeed - something in excess of £300 million per year.

    In considering whether it is right not to make an order, I take into account that Mrs Carson, as I understand the facts, did not bring these proceedings as a solitary pensioner compelled to do so by penury, but because she is representing, in an informed sense, and has the backing of, the South African Alliance of British Pensioners. That is a relative small association, I am told, with some 7,500 members out of some 37,000 South African pensioners who stand to gain if my judgment is overturned in the Court of Appeal, or above, if the matter goes further. I am also told that the Alliance has only £4,000 in the kitty with which to meet an order for costs.

    I approach this matter on the basis that the Alliance and those advising Mrs Carson must have been aware that there was a contingent liability for costs if they were unsuccessful. They were aware of a line of decisions by the Commission, all of which indicated that the prospects of success were not, in my judgment, as great as they might be. They were a hurdle to overcome. I also assume that the Alliance has and will behave responsibly in relation to its position so far as Mrs Carson is concerned, that is to say having, I assume, funded the costs so far and proposing to fund the costs of an appeal in respect of which I have given permission, it would raise the monies necessary to meet an order for costs. As I say, it must have been obvious that there was, on any basis, a contingent liability for costs.

    In those circumstances, it seems to me that although this is public interest litigation, it is litigation in which a large number of persons stand to benefit significantly and there is no sufficient reason for me to depart from the normal rule in that respect, and so I follow the indications given by Mumby J in the case of Smeaton on behalf of the Society for the Protection of Unborn Children [2002] EWHC 886 (Admin), to which I have been referred today. I therefore will make an order for costs against Mrs Carson, those costs to go for detailed assessment.

    However, this matter is to go before the Court of Appeal, I assume, in any event, subject to any further submissions counsel may wish to make, and what I propose to do, having made that order for costs, is to grant Mrs Carson permission against that order for costs so that the Court of Appeal can review whether the order I have made is an appropriate order in a case such as the present.

    MR HUNT: I am obliged, my Lord.

    MR JUSTICE STANLEY BURNTON: Are there any other applications?

    MR EADIE: No.

    MR JUSTICE STANLEY BURNTON: Thank you very much.

    Annex 1 to the judgment

    The UK legislation

    (a) Basic Provisions

  117. State retirement pensions are made up of two components, either or both of which may be payable: the Basic State Pension (dependent on the number of qualifying years a person has in her working life) and an additional pension (dependent on a person’s earnings since April 1978).
  118. State retirement pensions are categorised in the Social Security Contributions and Benefits Act 1992 (“the SSCBA”) into Categories A, B, C and D. Categories C and D are non-contributory and are not relevant. Categories A and B are contributory (see section 20(1)(f)). As contributory benefits, Category A and B pensions are dealt with under Part II of the SSCBA. Category B pensions are payable on the basis of the contribution record of a spouse (see section 20(1)(f)(ii)); and, as such, are not relevant in this case. The Claimant receives a Category A pension.
  119. A Category A pension is payable on the basis of a person’s own contribution record (section 20(1)(f)(i)). It consists of (a) a basic pension payable at a weekly rate and (b) an additional SERPS pension where the individual has not contracted out of that scheme (section 44(3)). Either or both may be payable.
  120. Section 21 provides:
  121. (1) Entitlement to any of the benefits specified in section 20(1) above ... depends on contribution conditions being satisfied ...
    (2) The class or classes of contribution which, for the purposes of subsection (1) above, are relevant in relation to each of those benefits are as follows:
    Category A retirement pension Class 1, 2 or 3".
  122. Section 44 SSCBA lays down the conditions under which a Category A retirement pension arises:
  123. (1) A person shall be entitled to a Category A retirement pension if –
    (a) he is over pensionable age; and
    (b) he satisfies the contribution conditions for a Category A retirement pension specified in Schedule 3, Part I, paragraph 5;
    and, subject to the provisions of this Act, he shall become so entitled on the day on which he attains pensionable age and his entitlement shall continue throughout his life.
    (3) A Category A retirement pension shall consist of -
    (a) a basic pension payable at a weekly rate; and
    (b) an additional pension payable where there are one or more surpluses in the pensioner’s earnings factors for the relevant years.
    (4) The weekly rate of the basic pension shall be [£72.50] ...”

    The sum of £72.50 was substituted for the previous figure by the Social Security Benefits Up-rating (No. 2) Order 2000 (SI 2001 No. 207), with effect from 9 April 2001.

  124. The result of the applicable provisions is that a person is entitled to the basic element of a Category A pension if (a) she is of pensionable age and (b) she satisfies the contribution conditions for a Category A pension set out in section 21(1) and (2) and Schedule 3, Part I, paragraph 5: see section 44(1). There are two such contribution conditions. First, the person must have achieved an earnings factor derived from a specified amount of National Insurance contributions actually paid. Secondly, the person must have achieved a minimum number of qualifying years during her working life: a qualifying year being linked to qualifying earnings in the tax year in question. If more than a quarter but less than the full number of qualifying years have been achieved, a reduced rate basic pension is payable. A person resident and working abroad can make voluntary contributions from abroad in order to protect her position and ensure that the requisite number of qualifying years are achieved to qualify for the full basic element of the Category A pension. This is what the Claimant did.
  125. A person is entitled to the additional element of a Category A pension if (a) she has reached pensionable age; (b) had earnings between the lower earnings limit and upper earnings limit for national insurance from 6 April 1978 until the end of the last complete tax year before she reached pensionable age and (c) had not contracted out of SERPS (sections 44(3) and 45). SERPS is a scheme for those who are not contracted-out into an occupational or personal pension. It is earnings-related and payable to employees who have paid a specified level of Class 1 National Insurance contributions since April 1978. The amount of SERPS payable is quantified in accordance with a formula the complexity of which is not important.
  126. Graduated retirement benefit is based on the amount of graduated National Insurance contributions a person paid when the graduated retirement scheme existed between April 1961 and April 1975. It is payable to any person who is of pensionable age and has paid graduated contributions: see sections 36-7 of the National Insurance Act 1965, and the Social Security (Graduated Retirement Benefit)(No. 2) Regulations 1978.
  127. All contributory benefits are paid out of the National Insurance Fund. This is operated on a pay-as-you-go basis: current income set annually (mainly from employers, employees and the self-employed) funds current expenditure.
  128. (b) Uprating

  129. Section 150 of the Social Security Administration Act 1992 (“the SSAA”) requires the Secretary of State in each tax year to review the sums specified in, among others, Section 44(4) of SSCBA (i.e. the amount of the basic pension). Section 150(2) requires the Secretary of State to lay before Parliament the draft of an up-rating order “Where it appears to the Secretary of State that the general level of prices is greater at the end of the period under review than it was at the beginning of that period”. The order must provide for the increase of, among others, the sum specified in Section 44(4) of SSCBA by a percentage not less than the percentage by which the general level of prices is greater at the end of the period than it was at the beginning. Section 150(9) provides that if a draft order laid before Parliament in pursuance of Section 150 is approved by resolution of each House, the Secretary of State shall make the order in the form of the draft. The Social Security Benefits Up-rating (No. 2) Order 2000, which as mentioned above increased the sum specified in Section 44(4) to £72.50, was made under Section 150 of the Social Security Administration Act.
  130. The disapplication of uprating to the Claimant’s pension

  131. Section 113 of the SSCBA contains general provisions as to disqualification from receiving benefits and for suspending payments. Section 113(1) provides, so far as relevant:
  132. Except where regulations otherwise provide, a person shall be disqualified for receiving any benefit under Parts II to V of this Act ... for any period during which the person -
    (a) is absent from Great Britain; or
    (b) is undergoing imprisonment or detention in legal custody.

    Section 113(3) provides:

    Regulations may provide for a person who would be entitled to any such benefit but for the operation of any provision of this Act ... to be treated as if entitled to it for the purposes of any rights or obligations ... which depend on his entitlement, other than the right to payment of the benefit.
  133. By s. 113(1)(a), a person is therefore disqualified from what would otherwise be their statutory entitlement to a Category A retirement pension for any period during which they are absent from Great Britain, “except where regulations otherwise provide”.
  134. The general statutory disqualification from receiving Category A retirement pension by reason of being absent from Great Britain is disapplied by Regulation 4(1) of the Social Security Benefit (Persons Abroad) Regulations 1975 (SI 1975 No. 563), which modifies the Act in relation to, inter alia, retirement pensions. It provides, so far as relevant:
  135. Subject to the provisions of this regulation and of regulation 5 below, a person shall not be disqualified for receiving ... a retirement pension of any category ... by reason of being absent from Great Britain.
  136. Regulation 5 of the 1975 Regulations, however, provides for the re-application of the disqualification in regulations providing for the up-rating of retirement pensions:
  137. 5 (1) Where regulations made in consequence of an order under section 63 of the Social Security Act 1986 (up-rating of benefits ...) provide for the application of this regulation to any additional benefit becoming payable by virtue of that order, the following provisions of this regulation shall ... have effect in relation to the entitlement to the benefit of persons absent from Great Britain.
    (3) ... where a person is not ordinarily resident in Great Britain immediately before the appointed date the provisions of these regulations (except this regulation) shall not, unless and until he becomes ordinarily resident in Great Britain, affect his disqualification while he is absent from Great Britain for receiving -
    (c)... any additional retirement pension of any category ..., if that person had ... become entitled to a retirement pension ... before the appointed date.
  138. For those territories where up-rating is disapplied, Regulation 3 of the Social Security Benefits Up-rating Regulations 2001 (SI 2001 No. 910) provides for the application of the disqualification to the additional benefit otherwise payable by virtue of the Social Security Benefits Up-rating (No. 2) Order 2000. This includes the up-rating of the retirement pension introduced by Article 4 of the Up-rating Order with effect from 9 April 2001:
  139. 3. Regulation 5 of the Social Security Benefit (Persons Abroad) Regulations 1975 (application of disqualification in respect of up-rating of benefit) shall apply to any additional benefit payable by virtue of the Up-rating Order.

    The payment of up-rated pensions to those in certain foreign countries

  140. Section 179 of the SSAA 1992 provides for modification or adaption of the applicable legislation in cases in which an Order in Council is made for the purpose of giving effect to a reciprocal agreement with another country. Such agreements may contain provisions dealing with a range of matters including uprating. Thus, up-rating may be paid to those receiving a UK pension who are resident in some countries where (a) there is such provision in the relevant reciprocal agreement and (b) there is an Order in Council applying the terms of such agreement in domestic law. There are such reciprocal agreements and Orders in Council in relation to the countries mentioned in paragraph 4 of the judgment.
  141. Annex 2 to the judgment

    Examples of Restrictions imposed by other countries on payment of pension abroad

    Country Restriction Imposed
    France Non-nationals who are not living in France cannot claim old-age or widowhood benefits from abroad.
    Germany Non-nationals who are not treated as Germans receive only 70% of the pension.
    Sweden Non-nationals can neither retain basic pension if they are abroad for more than a year, nor claim it from abroad.
    Australia It is not normally possible to claim an Australian pension from abroad: age pension is payable outside Australia only if it was awarded before the pensioner left there, unless the pensioner lives in a country with which Australia has a reciprocal agreement providing for the pension to be claimed from the other country.
    New Zealand 50% of pension payable if permanently resident abroad. Claim from abroad not permitted.
    Canada Old Age Security (OAS) Pension can be paid abroad indefinitely, and claimed from abroad, if the claimant has resided in Canada for a minimum of 20 years after the age of 18. If the claimant has over 10 years of residence but less than 20, OAS can be paid for the month of departure and the following six months only.
    Canada Pension Plan benefits can be paid abroad and claimed from abroad.
    USA Subject to certain exceptions, payment of pension abroad to non-nationals is limited to six months.

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