It's been a while! I last blogged about pensions but with me citing the ex-pat fallacy from 2018 again and again I think I need a more comprehensive update.
Every 6 months or so, we end up with nationalists invoking the ex-pat fallacy in a furious attempt to claim that after independence, Scottish pensions will somehow be paid by the rUK.
A good example of this lie (and it is a lie) is published by “ Believe in Scotland”:
“The UK government would therefore continue to pay pensions as normal, whether pensioners lived in an independent Scotland, France, Spain, or in any other country.”
Now, the original ex-pat fallacy post just takes this claim apart, but I think it's worth exploring the issue from a slightly different perspective.
The basics - The Scottish Government’s position
But let's start with the basics.
As per the Scottish Government's own detailed paper on “ Pensions in an Independent Scotland,” the position is set out in detail.
After independence, the Scottish Government is responsible for all pensions paid in Scotland. This includes 'UK Pensions' currently in payment. This 'allocation' of pensions between the two states is based on residence (something confirmed by Scotland's Future).
"173. I've worked most of my life in England and have only moved to Scotland recently to retire. Does that affect who will pay my pension and how much I will get?
No, it will not affect how much you will get. If you are in receipt of a UK State Pension on independence and you are resident in Scotland, the responsibility for paying that pension and all associated payments will transfer to the Scottish Government."
So we have absolute confirmation from the Scottish Government that they will be paying all pensions, including those UK pensions currently in payment.
For further clarity and to put the matter beyond doubt, I've also got it in writing from the Scottish Government under FOI that this "responsibility" includes the Scottish Government paying these pensions from their own budget with no passthrough payment from rUK.
So in summary, according to the Scottish Government, after independence, all pensions in Scotland are paid by the Scottish Government with no responsibility or payment from rUK.
The basics - The UK Government position
The UK Government position has been remarkably consistent in all of this, but in the cut and thrust of debates, it's actually been subject to vast amounts of disinformation.
The zombie DWP letter, selective quotes from Steve Webb to the Scottish Affairs Committee were all employed to pretend that the UK position was actually that rUK would pay iScot pensions.
The truth is the UK Government position was clear:
"I would think the Scottish people would expect their Government to take on full responsibility for paying pensions to people in Scotland including where liabilities had arisen before independence. Similarly people in the rest of the UK would not be expecting to guarantee or underwrite the pensions of those living in what would then have become a separate country. The security and sustainability of pensions being paid to people in Scotland would, therefore, depend on the ability of Scottish taxpayers to fund them.”
Steve Webb
Or if you prefer Guy Opperman (UK Pensions Minister) helped clarify the position when asked if rUK would pay iScot pensions.
"It's not going to happen under any circumstances"
So that's clear. rUK aren't going to pay iScot pensions.
The Unionist fallacy
The problem is the Unionist fallacy accidentally extends that UK position. They then argue that because rUK aren't paying iScot pensions then it's the Scottish Government position that would then apply.
But the UK position is far simpler than that.
'rUK aren't paying pensions, but *sucks in teeth* this is going to be bloody complicated. I hope you've thought this through nationalists'
That's it.
It's not the job of the UK to offer solutions here, this is the problem for those proposing change.
So why are unionists spending so much time defending the Scottish Government?
Fringe nationalists argue that the arrangement based on residence is is fraught with difficulties. What if someone moves (from England to Scotland, or Scotland to England) just before independence? How would you work out historic allocations (despite what the Scottish Government says). How can you get your pension in Spain but not in Scotland (the ex-pat fallacy).
All of these questions have straight answers, but why is it falling on unionists to answer them for the Scottish Government?
Then you have ultra-fringe nationalists such as Wings who now have nowhere else to go on pensions.
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He's openly accepted that the UK has no legal obligation to pay state pensions anymore, so he's now down to some affected outrage that Scotland would be excluded by the rUK and discriminated against.
This is of course nonsense. The UK already differentiates by state on pensions, and the ECHR has backed its position to do so and ruled that this is not discrimination. RUK wouldn't be excluding Scotland as we already know that Scottish pensions are picked up by the Scottish Government, so Campbell is metaphorically crying over Scottish pensioners not being paid their pensions twice!
But yet again it's the Unionist Fallacy to defend this Scottish Government position.
The answer - be careful what you wish for
But there is an alternative position which I've already articulated, I stupidly rejected it because I knew the nationalists couldn't support it! However, there is no reason for a unionist not to support it; indeed, it does close down the debate from our side.
The answer is simple.
All former UK pension obligations (in iScot, rUK or overseas), including current pensions in payment and entitlements already built up, are jointly honoured (via Treaty obligation) by the former UK, that is, iScot and rUK. These pensions are paid until the former UK book of obligations has been extinguished.
rUK, as the majority funder, will have control over the pension benefit, pension age, rate, and currency the pension is paid in. An Independent Scotland will be treaty-bound to fund its full share of pension costs in Sterling (more than we currently pay) to the rUK Government, who will then distribute these to Scots and pensioners in rUK.
If the Scottish Government wants to top these payments up, wants to change the starting age of pension benefits to Scots, then it's obviously free to do so, but that's not really different from the current position under devolution.
The rUK will have an integrated system that combines legacy UK and new rUK accruals.
Scotland will have at least two disjointed systems a jointly funded legacy Sterling one and a Scottish pension (which won't be in Sterling) paid solely by the Scottish Government.
So there you go, no niggles, no complications with who gets what and who is entitled to what from which government. Scots and those from rUK are in exactly the same position as someone from Ireland or Spain. A simple airtight solution that means Scottish pensions are in effect directed from the UK for at least a generation if not more. But hey, if you are a nationalist and you dislike this option, then you might want to consider why the Scottish Government specifically rejected it and proposed an alternative that you have spent years trying to pick holes in.
The Unionist position should simply revert to its original state; let's be the car mechanic looking under the bonnet and saying 'oh dear, this is going to cost you'. It's for nationalists to make the case for change and it's for them to fight it out amongst themselves.
