|Previous Section||Index||Home Page|
Greg Mulholland: Of course the point is about individuals. It is important to remember that we are talking about individual people and the effect that this matter has on their lives. Let me quote some individuals in my constituency. In a letter to me, Mr. Wilson said:
I am in my eightieth year and my wife is eighty two, both of us started work at fourteen years of age and never once in our working lives have we asked for, or expected, state hand outs... We do not ask for this now, but justice to right a wrong.
Both myself and my wife are two of more than one million Equitable Life victims who lost a substantial amount of our personal pension policy after Equitable closed its doors... I would add that we do not fit the bill as one of the illusory fat cat rich professionals that it suits Gordon Brown to characterise Equitable Life investors as being.
Annette Brooke (Mid-Dorset and North Poole) (LD): Obviously, justice is important. People have saved and done the right thing, and they are being punished. When confidence in the economy is vital, is it not important that there is confidence in the Government, in savings and, more importantly, in preparing for old age?
It is time that the Government fully accepted the recommendations of the ombudsman and opened proper negotiations with Equitable Life savers. Crucially, it is time for the compensation process to start before yet more people die. The Government must stop whistling in the wind, open their eyes and ears, and get their hands out of their pockets so that justice can be done.
Mr. Mark Field (Cities of London and Westminster) (Con): I congratulate the hon. Member for East Dunbartonshire (Jo Swinson) on securing the debate. As she knows, this has been a live issue for a considerable period of time. I spoke about it quite a lot in my first year as a Member of Parliament in 2001-02, not least because one of my constituents, Sir Gordon Downey, was a leading light in the policyholders group, and he made contact with me at the time. The issue seemed to die off. There was a lot of debate in the early part of the century, and then again in recent months.
Like many hon. Members, I have been sent letters from 50 or 60 constituents who are desperate to know whether the Government will implement the ombudsmans recommendations. Some have lost many hundreds of thousands of pounds. Although other losses have been
much more modest, they are, none the less, more significant because they are suffered by people living on a fixed income.
The much-delayed report was very comprehensive and made it clear that policyholders should be compensated. After the ombudsmans rigorous investigations, she gave all the parties concerned ample opportunities to contest her findings. She concluded that the regulators were guilty on 10 separate counts of maladministration. I believe that it is incumbent on the Government to honour that conclusion, because many of the regulatory failings took place on their watch, and to set up a proper compensation scheme.
It is easy to make comparisons with what happened in relation to Northern Rock and the other £37 million bail-out. From the Governments perspective, I can see that there is a distinction to be drawn between depositors in banks and policyholders in organisations such as Equitable Life. Although I am not suggesting that the two are entirely comparable, I hope that the Minister will have some sympathy with the plight of Equitable Life policyholders. As the hon. Member for Leeds, North-West (Greg Mulholland) said, the matter would have been treated somewhat differently had it not been for the fact that the pensioners are regarded as mainly a middle class and relatively affluent contingent. I accept that depositors in banks should be treated differently, but what is unacceptable, as the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) pointed out, is the Governments delay in making any decisions in relation to policyholders. Many are dying while waiting for resolution of this sad affair.
I have made my position on the matter clear to the shadow Chancellor. I asked that my party maintains its support for compensation should it be elected to Government. He responded by saying that he has called on the Government to admit their responsibility, issue the apology for which many have called and ensure that a payment scheme is created, which is what the ombudsman has demanded. My hon. Friend also stated that if the Government do not do that, a Conservative Government will do so as a matter of priority.
Mr. Christopher Chope (Christchurch) (Con): That is one of the most significant and helpful comments that has been made during this debatethat an incoming Conservative Government will do the business that the Government seem so reluctant to do.
I cannot claim poverty but I can safely say that at 77, 1 might well have been happily retired rather than continuing working so as to provide for my wife and two university-aged children.
Mr. Ronald Moss of Westbourne terrace in Bayswater said that he retired in 1996. In the following financial year, his gross monthly retirement income from Equitable Life was £413.82. Exactly 10 years later, the amount had dropped to £194.83, and that was an overwhelmingly large element of the money on which he lived. He is receiving 50 per cent. less in this decade at a time when the standard of living is rising by about 3 per cent. a year.
If I had received my full pension pot I would not now be struggling just about the poverty line.
Mrs. Monica Harkin of Vincent square said that she left the Foreign Office in her mid-40s and was persuaded to transfer a civil service pension to Equitable Life, not in the expectation of a huge pension pot at the end of her 41-year working life but simply because it was a safe and well-run organisation. It has turned out to be a foolish decision. In addition to the pension, she invested a large amount in the society. Her combined losses, which became apparent at the point of her retirement, were astronomical.
I could mention a number of other constituents, but I know that other hon. Members want to speak. Most of the people who have lost outthose who are still alive because many have died during the squabblingdo not have the option of returning to the workplace to make their way in life. They are often in their 60s, 70s or 80s and the Equitable Life money was the most important part of what should have been a relatively relaxed and quiet retirement.
I hope that the Government will consider the issue as a matter of urgency. Figures have been bandied arounda £4.5 billion package has been mentioned. Most Equitable Life policyholders to whom I have spoken are quite realistic about the numbers. They do not expect to get everything back because it is difficult to quantify. None the less, the fact that it is difficult to quantify, as my hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright) pointed out, should not mean that there is no opportunity whatever to obtain some compensation, which is urgently required by many of our constituents.
Mr. Jim Hood (in the Chair): I have come to the end of the list of the hon. and right hon. Members who requested to speak in the debate. Thanks to their brevity, I am minded to take Front Bench speeches at about 12 oclock. We have room for one or two brief contributions from Members who want to speak but did not put in a letter.
Mr. Brian H. Donohoe (Central Ayrshire) (Lab): I had no intention of speaking this morning, but I want to put on record some of the elements of this case that have been brought to my attention both by the ombudsman herself and by the Treasury. First, however, I congratulate the hon. Member for East Dunbartonshire (Jo Swinson) on obtaining this important debate.
Of course, in discussing the matter, we must also reflect on what else is happening in Government where compensation is the nature of the beast. During the past few years, other eloquent cases for compensation have been made for people who felt aggrieved. I shall mention only one: Farepak. I know that my hon. Friend the Member for North Ayrshire and Arran (Ms Clark) has capably put that case to the House. If every instance
of a problem in the private sector were to be relieved by Government compensation, I do not know what risk would be left in the private sectorit would be a big problem for compensation to be almost automatic in the event of the failure of a firm.
Daniel Kawczynski: The hon. Gentleman says that there cannot be compensation in relation to all companies. However, why are the Government compensating people who have deposited in foreign banks in Iceland, but not those who have invested in a reputable British pensions company, such as Equitable Life?
Mr. Donohoe: I have every sympathy with the people affected. Constituents have been to see me and, of course, I have great sympathy with their cases. However, I have to say to the hon. Gentleman that there is, or should be, a calculated risk on the part of any individual who invests their moneyparticularly, in relation to certain cases that have come to my attention where members have invested on the basis that additional interest rates would be paid because of the calculated risk that they took. People have to accept that and, in the main, they do. Those who are reasonable and have been to see me about the subject seem to have had a fairly clear idea of what they were after. Lots of people realised that they were taking a risk when they made the investment.
I have the following questions for the Minister. When did the matter first come to the Governments attention? Was it in 1997 or were they aware of it before then? In a letter to me from the ombudsman, she says that she was investigating the matter before December 2001, so it seems that the issue has been going on for some time. What was the role of the Financial Services Authority? As far as this and other issues are concerned, was it not the Government who introduced the FSA and were responsible for the introduction of the ombudsman service itself? I am sure that justice must be seen to be done, but people are aggrieved about what has happened.
I have one more point for the Minister. I have a letter from the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Burnley (Kitty Ussher), who was at the time a Treasury Minister. In the letter, she states that the length and complexity of the matter means that the Government will need to consider the report carefully during the summer,
before giving its response to the House in the autumn.
Mr. Andrew Tyrie (Chichester) (Con):
I am grateful to the hon. Member for Central Ayrshire (Mr. Donohoe) for being so brief. I congratulate the hon. Member for East Dunbartonshire (Jo Swinson) on her speech. She spoke of a cynical tactic of delay and a siege mentality. That is exactly what we have experienced from the
Government. The parliamentary ombudsman herself described it as iniquitous and unfair that the Government failed to establish one single good inquiry in 2001. I would like to add some detail to the shocking litany of obstruction that I personally encountered when I was shadow Paymaster General and tried to deal with the issue.
One of the key strategies was, of course, to hold inquiries with restrictive terms of referencefor example, the Penrose inquiry. Unfortunately for the Government, the Penrose report found serious failings by the regulators and serious maladministration.
Another crucial obstacle put in the way of getting to the truth was the attempt to prevent the report we are discussing from ever being published. It is important that the public are reminded that the Government argued that the ombudsman had no statutory authority to investigate the regulatory failure and maladministration found in the Penrose report. That was because the Government Actuarys Department was not listed as one of the departments for which the ombudsman had oversight. I was surprised by that so, in spring 2004, I consulted the Parliamentary Commissioner Act 1967.
I discovered that the Government could amend the Act by a negative resolution of the House to incorporate the Government Actuarys Departmentin fact, they could do it by a flick of a pen. I immediately wrote to the then Minister, the right hon. Member for Bolton, West (Ruth Kelly) and asked her to do so. I also checked out the matter with the parliamentary ombudsman and went to see her to discuss it. In fact, I went with the hon. Member for North Norfolk (Norman Lamb) and I thank him for his assistance in thinking the matter through.
I received a reply from the right hon. Lady that there would be no point in amending the 1967 ActI challenged her on that in the Housebecause the ombudsman could not act retrospectively. My suggestion would, of course, involve retrospection. I found that curious, so I went back to the 1967 Act where I found another clause that permits retrospective investigation by the ombudsman. I raised the matter for a second time on the Floor of the House. Of course, I got a nil return. I am sorry that I have so little time to talk about this, but I would like to thank the hon. Member for Bolton, South-East (Dr. Iddon), I think[Interruption.]No, I am sorry. It is the hon. Member for Norwich, North (Dr. Gibson).
Mr. Tyrie: I have another pair, but I do not think they will be any help. I particularly thank the hon. Member for Norwich somewhere or other, who helped me to produce an early-day motion. I also thank the hon. Member for Twickenham (Dr. Cable) who is not in the Chamber today and my right hon. Friend the Member for West Dorset (Mr. Letwin) who isI think I managed to get those constituencies right. I also thank the campaigners for EMAGthe Equitable Members Action Groupand the other pressure groups that have helped enormously. As a result of all that pressure, we were finally able to get the Government to concede and make an amendment to the 1967 Act in relation to inquiries by the parliamentary ombudsman. That is why we have the report we are discussing today.
I acknowledge that the Minister has an unenviable job. He will have to try to justify the unjustifiablethe accumulated detritus left by the previous holders of his job. I understand the difficulty of his position, but I strongly urge him to accept the need for compensation in principle as soon as possible. In particular, I urge him to take account of the plight of the late joiners, who were relying on assurances from the Government and their agencies that Equitables finances were okay and that Equitable was sustainable. They joined the organisation at a time when everybody should have known that Equitable was, in fact, in a parlous state. While the Government were giving those assurances, the Government Actuarys Department was asleep on the job. The report makes that perfectly clearasleep on the job just about fits the bill for the scale of the maladministration. We cannot go on like this; we must provide a reasonable level of compensation for those who have been so grievously hit. It is iniquitous that we have had to wait since 2001 to get as far as having the report.
I congratulate my hon. Friend the Member for Cities of London and Westminster (Mr. Field) on his excellent speech and his description of the sense of realism that informs so many of the letters we have received. That, too, should be borne in mind by the Minister. People accept that they will not receive full compensation, but they now need
Mr. Jeremy Browne (Taunton) (LD): I congratulate my hon. Friend the Member for East Dunbartonshire (Jo Swinson) not only on securing the debate, but on the masterful way in which she put her case on behalf of many hon. Members from all parties who had the opportunity to hear her speak. However, it is shameful that it took a Liberal Democrat MP to secure the opportunity for us to make the case in a debate on behalf of our constituents, rather than the Government making time available in the main Chamber. As a constituency MPI know this is true of every MP in the ChamberI have received dozens and dozens of letters from constituents who are extremely distressed by the circumstances in which they find themselves, and dismayed that the Government have dragged their feet and been unwilling to show greater resolve.
|Next Section||Index||Home Page|