MPs demand statement on Equitable Life before summer break

July 16, 2009 at 4:31 pm Leave a comment

equitable
by Tony Grew

Harriet Harman was pressed on the issue at Business Questions today and the plight of people was raised at Treasury Questions earlier this week.

The issue Equitable Life policy holders is of concern to many MPs – more than 320 of them have signed an Early Day Motion calling on the the government to accept the recommendations of the Ombudsman on compensating policyholders who have suffered loss.

“More than 30,000 people have already died waiting for a just resolution to this saga,” the EDM states.

In a report published in July 2008 Ann Abraham, the Parliamentary Ombudsman, called on the Government to apologise to Equitable Life policyholders and to establish and fund a compensation scheme for those policyholders.

She made ten determinations of maladministration on the part of the former Department of Trade and Industry, the Government Actuary’s Department, and the Financial Services Authority, in relation to their regulation of Equitable in the period before 1 December 2001.

Sir John Chadwick was then appointed as independent adviser in relation to the Equitable Life ex-gratia payment scheme.

Today Harriet Harman told the House:

“I would like to emphasise that the ombudsperson, in her report, looked at the generality of the situation, and drew conclusions about the principles of the approach.

“Sir John Chadwick is taking the matter forward, looking at which individuals have suffered from action for which there is culpability, and which have suffered an injustice.

“He will have to set up a system of paying money to individuals.

“There are nearly a million policyholders, many of whom have lost out, and given that public money is about to be expended, it is important to look at setting up a framework for doing so.

“Information on who the policyholders are, what their policies were, when they took them out, and whether individuals made any changes to their policies has been forwarded to Sir John Chadwick’s actuarial advisers, Towers Perrin, which is going through that information.

“Hon. Members, as well as everybody else, have been asked to make their views known to Sir John by this Friday, and he will produce an interim report in August.

“If we were tipping money out without a proper framework, the Opposition would rightly object and ask us what we were doing.

“There will be a statement, and there have already been oral questions on the subject.”

Shadow Leader Alan Duncan demanded a “full oral statement, before we rise, on how the Government intend to compensate policyholders.”

“Given that the policyholders have been waiting nine long years for the Government to act on their plight, does she accept that it would be a total insult to them if there were not a full, oral update in this Chamber?” he asked.

David Heath, Lib Dem business manager, also asked for an oral statement.

At Treasury Questions on Tuesday Liam Byrne, Chief Secretary to the Treasury, said Sir John Chadwick’s advice on an Equitable Life ex gratia payment scheme was proceeding “with urgency.”

“The question of the speed of his conclusions is also an important one, but I would like him to balance speed with coming to the right conclusions,” he said.

“He will obviously have to go through an enormous amount of information about policyholders, which will have to be thoroughly analysed before any conclusions can be drawn about the right ex gratia scheme to correct this injustice.

“Sir John told me this morning that it will be much easier for him to pin down what the next stages will be after this Friday, when all the representations have been received.

“He hopes to publish a further document pointing out the next steps in August.”

Lib Dem frontbencher Jo Swinson pointed out that with “15 policyholders dying every day, how much longer does he think it is reasonable for people to wait?”

Labour’s Lindsay Hoyle said the collapse of Equitable Life had touched every constituency in the country.

“The time has now come to show compassion and that the Government care,” he said.

“Let us get on with it; let us pay out the cheques and have done with it once and for all.”

Another Labour MP, Anne Begg, urged the government “to get a move on and get some money into their pockets.”

Shadow Treasury spokesman Mark Hoban said it is a year since the ombudsman produced her report and six months since the Government produced their response.

“Does the Minister not appreciate just how angry policyholders are that they still do not know how much they may receive or when they may receive it?” he asked.

“Is it not time for the Government to give a clear deadline for when policyholders can expect to receive some payments in recognition of the losses they suffered as a result of the Government’s maladministration of the regulation of Equitable Life?”

Mr Byrne said the anger “is shared on both sides of the House” and “all Members want a speedy resolution now.”

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