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UK Politics

Pensions Minister Steve Webb defends proposed overseas pensions curb

Change reflects coalition fears over the rise of Ukip

It is not fair to taxpayers that a growing number of people overseas can claim UK pensions even though they have "never put a penny" into the system or even been here, Pensions Minister Steve Webb said as he defended a proposed curb.

The Pensions Bill, part of the Government's legislative package to be unveiled in Wednesday's Queen's Speech, will seek to end the practice of women being able to claim solely on the basis of their husband's contributions or vice-versa.

Fewer and fewer UK residents take advantage of the "anachronistic" measure but the numbers overseas have risen in recent years, requiring action, Mr Webb said.

Existing pensioners will be unaffected but new claims at home and abroad will be barred from 2016 as part of a significant overhaul of the system that will see the introduction of a single-tier pension, worth around £144 a week in today's money.

The simplified retirement set-up will be based solely on personal contributions.

Mr Webb rejected suggestions that he highlighted the impact on overseas spouses in an interview with the Daily Telegraph newspaper in an effort to counter the appeal of the UK Independence Party, after its strong showing in last week's county council elections.

"Not at all," he told BBC Radio 4's The World at One. "I think the fact the we do pay over 200,000 pensions outside the country, many people who may not even have visited the country, would strike most people as not fair. And we are going to change it."

The present cost to the taxpayer of those payouts, worth up to £3,500 a year, is put at around an annual £410 million.

"We're not saying we care who you marry, that's your choice. What we are saying is: don't expect in the future that when you marry somebody they acquire rights in the British system even if they haven't put in," Mr Webb said.

Norman Cudmore, who lives in The Philippines after serving in the RAF for 22 years and working overseas for another 16, told the BBC he feared his Filipina wife could be left "destitute and starving to death" when he died.

"I have contributed to the UK pension scheme for all those years and will qualify for a state pension. I did this so my wife would have some security when I finally pass away," he said.

The Queen's Speech will also feature a Bill giving increased rights to consumers but reducing "burdens" on business, aimed at saving £4 billion over 10 years in more effective protection and better understanding of consumer rights.

The expected legislation is designed to consolidate consumer rights, currently split between eight pieces of legislation, into one place.

It will cover goods, services, digital content and unfair contract terms and brings together around 60 pieces of legislation on trading standards powers to investigate breaches of consumer law into a single piece of legislation.

Ministers believe businesses will benefit from the faster resolution of complaints because they would spend less time and money dealing with them.

The Bill is expected to help people unhappy with home improvements and make it easier to seek refunds for faulty goods.

It will also be confirmed this week that Citizens Advice and Citizens Advice Scotland have agreed to take on the responsibilities of Consumer Focus from April 2014.

Richard Lloyd, Which? executive director, welcomed what he calls a "consumer bill of rights" but called on the Government to go further and to extend civil remedy powers to allow private enforcement bodies, like Which?, to take action against rogue companies.

Citizens Advice chief executive Gillian Guy said that the related value of consumer complaints about goods and holidays in the past year totalled £185 million.

"The staggering value of consumer complaints to Citizens Advice in the past year clearly demonstrates that customers need a helping hand to make sure they are treated fairly."

Harsher punishments are also required, she suggested.

"I'd like to see a Santa List which identifies naughty and nice businesses. Publicly listing those businesses who do not comply with regulations will not only warn consumers but reward retailers who do the right thing by their customers."