Brexit: Are we over the line yet?

Brexit door

When one door closes another one stays closed too

Nigel Nelson is a regular contributor to Brits in Toronto, and is a member of the non-profit Canadian Alliance of British Pensioners (CABP), and Past Chair of the (also) non-profit International Consortium of British Pensioners (ICBP).

Here’s his latest thoughts on pinning the tail on the PM, Brexit, pensioners in Canada who receive the UK State Pension, and the upcoming Canadian election. All views are the CABP’s and Brits in Toronto does not endorse them and is not held liable in any way. As always, do your due diligence.

I received an e-mail from British Bloke yesterday and he invited me to write an article on Brexit — he said that I could write something for him this week, or wait until after the weekend.

Did I want to write something now (and look foolish next week) or play it safe and write after the vote. I told him that I was very busy this week, and would next week be OK?

The e-mail from him came at a timely moment as my octogenarian friend James (you may remember that I first introduced you to James in the Ouch! How Brexit is hurting UK pensioners in Canada and in the later article James and I go to London) and I were playing pin the tail on the next PM. Even with a blindfold on, he managed to pin it on Elizabeth May three times out of five — he always has had a penchant for strong women.

I had to explain to him that Elizabeth May was not standing in every constituency, and since he lives in Ontario he will have to choose somebody closer to home …

In a nutshell, where are we with Brexit?

So far, this single issue has blown through two Prime Ministers: David Cameron and Theresa May (who submitted essentially the same “Withdrawal Agreement” to the UK Parliament four times in succession, only to have four resounding defeats, leading to her resignation) and now threatens the short tenure of Boris Johnson.

This last one seems very strange since he easily won the hearts and minds of the Conservative heartlands in becoming PM, and he has been very consistent in saying that the UK is leaving the EU on October 31, come hell or high water, with or without a deal.

But there has still been strong resistance in his own Party, never mind Opposition parties that could see and smell blood in the water already.

In order to avoid a head-on collision, Boris prorogued Parliament which was deemed illegal, then the Benn Act was passed which forbade Parliament from taking the “no deal” route, and, instead Boris would have to agree with the EU a new withdrawal date).

Boris then expelled 23 members of his own Party for voting against him (including a good friend of the “frozen” pensioners, Sir Oliver Letwin (no name dropping, but one of the cleverest men James and I have ever met)), and he has kept plugging away, even issuing a document this week entitled “No-Deal Readiness Report” and agreed a “new” deal with the EU.

This was put before the UK Parliament today (Parliament has only sat three times since 1939 on a Saturday.

What has all the fuss been about, you may ask?

Finding a solution in Ireland that suits Northern Ireland, the Republic of Ireland, the UK and the EU — an impossible task you may think. Everyone was agreed that there should not be a hard border between Northern Ireland and the Republic of Ireland (this would be like annulling the “Good Friday Agreement” and nobody wants to go there).

Boris has now agreed with the EU that the whole of the UK will leave the EU customs union. This will allow the UK to negotiate future trade deals with any country in the world. There will be different tax rates for goods that are transported to Northern Ireland, depending on where they are for use in Northern Ireland or whether they will be transported to the Republic of Ireland, and vice versa; goods that arrive in the Republic of Ireland will be taxed differently depending on whether they stay there or whether they are transported to Northern Ireland or the UK. More details of the “deal” can be found here.

Since my main interest in all of this is the impact any Brexit deal has on UK pensioners living in the EU. Essentially, if a Brexit deal is struck with the EU before the end of this month, then the UK pensioners living in the EU (of which, according to data from the Department of Work and Pensions (DWP) there were 498,000 as at February 2019) will continue to receive the annual increase to their UK State Pension (a bumper 4% next April) for the transition period which ends on December 31, 2020.

The transition period will then be used to negotiate reciprocal social security arrangements between the UK and each of the EU countries such that the UK pensioners living in the EU will continue to receive free healthcare and UK State Pension annual increases.

If the UK has not finalised a deal with the EU by October 31, then things get really interesting. Boris is adamant that the UK will leave by the end of this month, even if that means there is a “no deal,” and the Benn Act of Parliament prevents this from happening. The Benn Act is interesting because the Judiciary usually keeps its nose out of political decision making, but not so on this occasion.

So, if the UK does crash out of the EU on October 31, UK pensioners living in the EU will continue to receive the annual increase to their UK State Pension until 2023 — presumably because it will take much longer to negotiate bilateral social security agreements with each of the EU countries, since they will be really pissed off with the UK.

Also, with a “no deal” it is not clear whether the UK will still have to pay the divorce bill — which, according to the pillar of the British press, The Sun, is an amount “between £35 and £39 billion.”

It has taken a long time to get here, but how does this affect UK pensioners who have come her to Canada to retire?

According to Department for Work & Pensions numbers, there were close to 134,000 UK pensioners living here, and there will be no “bumper 4%” increase for them next April (there are over 26,000 of them who are receiving less than £20 per week (say, CAD 32), and another 50,000 who are receiving between £20 and £40 per week). A UK State Pension is “frozen” at the level at which it is first received, with no annual increase, ever.

So, by way of example, if you had retired from the UK and came here to Canada in 2001, aged 65, on a full UK State Pension, you would have received £72.50 (C$159) per week. You would still be getting £72.50 a week (C$119), but in real terms getting C$40 less per week due to the drop in the £ to CAD exchange rate. Since emigrating here, your peers back in the UK will have received £26,538 (C$47,026) more. If you are a retired UK ex-pat, this chart may help you see how much less you have received.

If you are already affected, or think that you will be affected by the UK “frozen pension” policy, and would like to help us in our fight, please check out the Canadian Alliance of British Pensioners (CABP) and they may be able to help you.

Once new bilateral social security agreements have been negotiated between the UK and EU countries, then the “frozen” pensioner action groups like CABP will challenge the UK Government on a “why them, and not us?” basis.

Finally (at last, you say), if you were one of the 3.4 million Advanced Poll voters, then congratulations. If you didn’t vote in the Advanced Poll, and you are eligible to vote, I implore you to get out and vote on October 21.

This could be a close federal election, and every vote counts. I have no idea who James will be voting for … he is playing his cards very close to his chest … but, to his chagrin, it won’t be Elizabeth May!

Where do you stand on the “frozen pensions” issue? Nigel can be reached through:

E-mail: theretiree@telus.net
Facebook: https://www.facebook.com/profile.php?id=100011398010359
Pinterest: https://www.pinterest.ca/FrozenBritishPensions/

1 thought on “Brexit: Are we over the line yet?

  1. Andy Robertson-Fox

    I think we really need to wait and see how things pan out in the UK parliament this week and, of course, the EU response to the request to extend the deadline beyond the end of October. I am uncertain whether, either with or without a deal, the UK will seek an arrangement for social welfare (health and pensions) with the EU as a bloc or will have to negotiate with te countries individually.

    Reply

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