Chairman’s Report 2008/09

Overview
On our three main current pension issues we have reached a standstill in the case of Hong Kong, had a set-back over Zimbabwe, and made a fresh approach about Central African Federal pensions.  I now deal with these in turn.

Hong Kong Pensions
In the case of Hong Kong, the Council has concluded, reluctantly, that in view of the FCO's persistent refusal, there is no realistic prospect of securing an amendment to the Sterling Pensions Safeguard Scheme in order to correct the unfair treatment of the small number of pensioners who are less-well protected.  It is clear to us that the Scheme does not fully meet the Government's claim that it provides for all Hong Kong pensioners a fair and reasonable level of pension protection at a level broadly equivalent to their UK Civil Service counterparts. There are some Hong Kong pensioners who are considerably worse off than their counterparts. But the FCO have stopped their ears so we would be wasting our breath to keep on at them.

Meanwhile, Hong Kong pensioners in Britain and elsewhere have benefitted from the much higher exchange rate against sterling of the US$ and - because of the link - of the HK$ too, thus increasing the sterling value of their pensions.  In many cases this has meant a reduction or suspension of the amount of SPOS they receive.

Zimbabwe Pensions
On Zimbabwe, Lord Malloch Brown finally admitted to Lord Waddington in October 2008 that he had been unable to get support from his colleagues for any measure to help the Public Service pensioners.  This was a year after he had said in the House of Lords debate in October 2007 that he would look again at the problem, acknowledging that there were "moral and pragmatic arguments for providing assistance".

An official accompanying the Minister said that the cost of annual payments would be too high to be acceptable to the Government, and that even a single ex-gratia payment would not be acceptable either.  Lord Malloch Brown said that when the time came for a plan for Zimbabwe's recovery he would stress the need for the Zimbabwe Government to acknowledge its responsibility for the pensions and to resume payments.  Meanwhile he encouraged OSPA to continue to press the pensioners' case.

There was a flash of encouragement when the Daily Telegraph published a prominent article on 24 December by the paper's Diplomatic Editor accusing the British Government of deserting the Public Service pensioners.  The article was supported by a separate commentary on the Telegraph website.  It was followed on 26 December by an editorial under the heading Deserving Pensioners that ended by declaring that there was surely a moral obligation towards them.  Two letters were also published, one from OSPA Council member Barry Lennox and the other from Frank Taylor as Secretary of the Zimbabwe Public Service Pensioners' Group.  The articles were the result of skilled persistent briefing by freelance journalist Clare Rewcastle, whose father is an OSPA member.

In view of the possibility of a General Election in the next year or two, we have, with the help of our honorary Parliamentary Adviser, Mr Gerald Howarth, MP, sent up-dated briefing to the Conservative Shadow Foreign Secretary, Mr William Hague, MP, and Shadow International Development Secretary, Mr Andrew Mitchell, MP, asking for support from an incoming Conservative Government.

However, the recent political developments within Zimbabwe have not yet brought any change in the situation as far as pensioners are concerned.  We remain in touch with the British Embassy in Harare and they keep contact with the Zimbabwe Government Pensions Office.  The Director there is still in post though the office cannot function normally.

Central African Federal Pensions
On Central African pensions, the problem of the imminent deficit in the Central African Pension Fund remains unresolved.  The three African governments have still refused to respond to the requests by the Crown Agents, as the CAPF trustee, to fulfil their obligations as guarantors to remedy the deficit which had been estimated to begin to affect pension payments in 2010.  I have therefore written to the Foreign & Commonwealth Secretary, the Rt Hon David Miliband, MP, pressing the case that the British Government should accept ultimate responsibility for the pensions of former Federal civil servants, not only to safeguard the present pensions but also to provide for overdue pension increases.  The last pension increase was in August 1997, and UK RPI inflation since then has been over 36%.

I pointed out that the British Government has a special and unique responsibility to the Federal pensioners, because it was responsible for setting up the Central African Federation in 1953 and then dissolving it in 1963.  Those decisions were taken by Britain as the colonial power.  Although the governments of the three territories were involved in the decision to share responsibility for the future funding of the CAPF, the arrangements predated independence for all three and therefore should not be looked at in the same light as if they were agreements between sovereign powers.  For this reason Britain's position as a guarantor of the Fund gives HMG a special status as far as pension protection arrangements are concerned.

I said that besides this point of legality there are also strong moral arguments for the British Government to acknowledge full responsibility.  These centre on the pressure the Government was able to exert over the establishment of a Federation which, as the colonial power, it pushed through in the face of strong public opposition particularly in Northern Rhodesia and Nyasaland.  In the light of the independence movements in those countries having been largely driven by opposition to the Federation, it is small wonder that there is a reluctance by their governments to contribute to the funding of Federal pensions.  Yet the pensioners themselves invested their futures in what many at the time saw as a far-sighted and imaginative political arrangement.  It had the potential to transform the whole future of Central and Southern Africa and enjoyed full British Government support.  The pensioners are therefore justified in expecting their pensions to be protected accordingly.

'Frozen' State Retirement Pensions Overseas
There are two other pension matters of a different kind that we have been concerned with, relating to UK State Retirement Pensions, not Overseas Service pensions.  First, there is the appeal which we supported, submitted to the European Court of Human Rights by the Canadian Alliance of British Pensioners (CABP) and the International Consortium of British Pensioners (ICBP), against the British Government's policy of denying pension increases to pensioners resident in the main countries overseas.  The ECHR judgment, given on 4 November and published on the 20th, was by a majority of 6 to 1 in favour of the Government, rejecting the pensioners' appeal.  The solitary contrary opinion was held by a Polish judge, who was also the President of the Court.  The CABP/ICBP consulted their legal advisers and other supporting bodies and on 13 January 2009 submitted a request for an appeal (technically termed a referral) to the Grand Chamber of the ECHR.  The decision on this request has not yet been announced.  If granted, the actual hearing would not be for another 12 months or so.  The Grand Chamber comprises 17 judges.

Back Payments of National Insurance Contributions
The second matter is the claims for back payment out of time of National Insurance contributions, by people who had not known about the option to pay voluntarily when they took up their appointments overseas.  The number of successful claims as at the end of February was 51, an increase of 8 over the 43 claims that had been accepted by September 2008.  37 claimants have let the Tonbridge office know.  Almost all of them were people who had taken up their Colonial Service appointment in or before July 1948 when the new National Insurance Scheme was introduced.  They include at least two successful claims by widows whose husbands had gone overseas in 1947 or 1948.  In a few cases officers who joined the Colonial Service later but who had not done National Service nor taken any paid employment have succeeded too.

Several of the successful claimants have generously made donations from their pension arrears to the Benevolent Society in recognition of OSPA's role in making that success possible.  For those who are UK income tax payers their donation may also enable the Society to recover the income tax paid, through the Gift Aid Scheme.

These successes mean that something in the region of £1 million in arrears and increased pensions has been paid out to the OSPA members concerned.  The credit for that very satisfactory result is due almost exclusively to Peter Fullerton who initiated the exercise and conducted most of the essential correspondence with members enquiring about the processes involved.  It is slightly ironic that his own claim was one of the many that were rejected by HMRC.

Safeguarding our Reputation
The main non-pension matter that the Tonbridge office has given a lot of attention to has been in making representations to the BBC about the Radio 4 broadcast programme in July 2007 which made serious allegations of malpractice by HMOCS generally in Nigeria and in other colonial territories by rigging election results, amongst other things.  There is satisfaction that the BBC have acknowledged that the programme makers had breached several important guidelines and that the programme had flaws and failures.  But that does not really wipe the slate clean, for some of the misrepresentations will stick in the minds of some of the listeners.

Membership
The Association's membership continues to fall for familiar reasons, down to 4,561 at the end of March.  This is a reduction of 309 below last year's figure.  The drop would have been greater had it not been for the welcome addition of over 100 new members who have transferred from the former Sudan Government British Pensioners' Association.  There were 90 other new members, of whom 36 were widows, these being very close to the same numbers as last year.

Finance
A consequence of our shrinking membership is that our income from subscriptions - the most important source - drops too.  In 2008 annual subscriptions yielded a little over £60,000 (taking account of those paid in advance for future years).  In 2006, when the subscription rates were last increased, the comparable figure was almost £68,000.  However, the smaller membership means a corresponding saving in our biggest cost item (apart from the staff and the Tonbridge office), which is the magazine, even taking account of higher postage rates and printing charges.  So our regular expenditure, excluding donations, has not increased much over these three years.  We have therefore decided to leave the subscription rates unchanged for 2010, and to balance the budget, so to speak, by drawing from our reserves.  In reaching this decision we took account of the arrangements made with the Sudan Government British Pensioners' Association.  We agreed that former SGBPA members joining OSPA should pay only £10 a year in subscription for the present, but that brings in an additional £1,000 plus.  Also we have received over £5,000 from the SGBPA which has added to our reserves.

Council, and Staff
As usual, I give thanks again on my own behalf, and on behalf of all members, to my colleagues on the OSPA Council for the time and attention they give to the Association's affairs throughout the year.  Also of course to our President, Lord Waddington, who is constantly mindful of our interests.  Similarly, we are grateful to our Secretary/Treasurer and his staff at Tonbridge for all that they do to carry forward our purposes.

J F Mathews, CMG                                                                                                                                                                           March 2009
Chairman