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19 May 2009 : Column 357WH—continued
The Economic Secretary to the Treasury (Ian Pearson):
I would like the right hon. Gentleman to reference where that was said, because it is not my understanding of the Government’s position. We have made it clear all
along that we want to proceed as swiftly as possible. We want to see John Chadwick’s report as swiftly as possible. We want to do work as a Government in parallel to that. I simply do not recognise where the right hon. Gentleman got that quotation, so I would be very interested if he could make it stand up.
David Davis: I was referring to the comments of the Chief Secretary to the Treasury. I cannot remember the exact time when it was said, but if this Minister is saying that it is no longer true, we have achieved something in this debate today. If he is saying that it will be less than two and a half years, we will take that and I will happily retract the comment absolutely on the basis that we get that promise today. That might be a success that we can measure off the back of today’s debate.
Daniel Kawczynski (Shrewsbury and Atcham) (Con): I think that my right hon. Friend has managed to secure, through his debate, a significant change in policy from the Minister, because I distinctly recall listening to the Chief Secretary in a debate in January of this year in which she refused, first, to consider interim payments and, secondly, to give a guarantee that the payments would be made within the next two years.
David Davis: The Select Committee on Public Administration, whose eminent Chairman, the hon. Member for Cannock Chase (Dr. Wright), is with us today, described the Government’s stance as “morally unacceptable” in its report “Justice denied? The Government’s response to the Ombudsman’s report on Equitable Life”. It said that the excuses that the Government had come up with were introduced “late in the day” in a way that it found
“shabby, constitutionally dubious and procedurally improper.”
It says that the proposed ex gratia payment scheme looks “slow and onerous” and represents a
“basic failure on the part of the Government to understand the problem which its scheme is supposed to address.”
Furthermore, it considers the disproportionate impact test as an “unnecessary complication”.
On 5 May 2009, the ombudsman took the almost unprecedented step that has brought us here today—people have called it the nuclear option. She published a special report entitled “Injustice unremedied: the Government’s response on Equitable Life”, in which she condemned the Government’s response absolutely. She noted that she was “deeply disappointed” with the Government’s rejection of many of her findings and said that she was
“entirely unpersuaded by the basis for those rejections”.
In particular, she noted that the response
“was based on an extremely limited and unevidenced view”,
“failed to address the whole basis on which I had found maladministration to have occurred”
“contained commentary...which appeared to limit and/or re-interpret the findings I had made”—
not something that the Government should be allowed to do.
Mrs. Jacqui Lait (Beckenham) (Con):
I add my congratulations to my right hon. Friend on obtaining this very important debate. The whole issue of implementing
regulations is the crux of how a modern society develops. If the bad faith shown by the Government in relation to implementing the ombudsman’s report is not dealt with, we will find the whole of UK administration shaking on its foundations because we do not have a robust regulatory structure.
David Davis: I agree. In some respects, it indicates a lack of faith by the Government in their own regulatory structure. That is one of the worst outcomes in the long term. It relates to the point made by my hon. Friend the Member for South-West Bedfordshire about saving and making provision for oneself. We are now in a position in which making provision for one’s own future is almost financially irrational for certain categories of people. The issue that we are discussing today reinforces that problem.
The ombudsman raised three major concerns about the Government’s proposals. First, she said that by making ex gratia payments rather than paying compensation, they had
“broken the link between injustice resulting from maladministration and the provision of any remedy.”
Secondly, she raised the lack of clarity and a timetable in relation to Sir John Chadwick’s work. Thirdly, she referred to the misleading and disproportionate use of the Penrose report in the Government’s conclusions.
The lack of any urgency on the part of the Government to bring this saga to a conclusion was highlighted last weekend in The Mail on Sunday. It pointed out that, far from acting with all due expediency in his considerations in this matter, Sir John Chadwick has had just one single hour-long meeting with the Equitable Life board members and has spent two weeks recently in the Caribbean in his role as president of the Cayman Islands court of appeal. He has also—[Interruption.] Let me say to hon. Members that I do not intend this as a criticism of Sir John Chadwick; I just think that it indicates the effect of the lack of urgency put on him by the Government.
Steve Webb (Northavon) (LD): I congratulate the right hon. Gentleman on a very powerful contribution. In terms of speeding things up, we will obviously have a new House of Commons within a year, and I imagine that all those considering whether to elect us will want to know where we stand, and rightly so. Can he assure us that he has received a cast-iron guarantee from the shadow Chancellor of the Exchequer, the hon. Member for Tatton (Mr. Osborne), that in the event of a Conservative Government, the ombudsman’s recommendations will be honoured in full and unequivocally?
David Davis: I have not asked for that cast-iron guarantee, but I hope that my hon. Friend the Member for Fareham (Mr. Hoban) will give us the Conservative line on the issue when he speaks later in the debate. I have to say, however, that I want that cast-iron guarantee every bit as much as the hon. Gentleman.
The Equitable Members Action Group has launched a claim for judicial review, following the Treasury’s depressingly predictable failure to take action on the ombudsman’s call for a scheme to assess all claims
within two years, and we may, of course, arrive at that review in the sort of time scale that the hon. Gentleman has mentioned.
The Equitable board has also condemned the Government. The chairman, Vanni Treves, described the Government’s response as “scandalous”, adding—this is the point made by the hon. Member for Romsey (Sandra Gidley)—
“why haven’t our policyholders been treated as well as Northern Rock and RBS depositors have...At any other time this would have been regarded as an absolute scandal”
Charles Thomson, the chief executive, went further. In a recent interview, he said:
“Disappointing is the easy word. Appalling is closer to the reality...I can’t think why it”—
“has been so stubborn and pig-headed. You just throw your hands up in horror...If you have got an ombudsman, are you prepared to let government ride roughshod?”
The Government are attempting to undermine the parliamentary ombudsman. It is shabby and inappropriate.
Policyholders have described the response as “a complete joke”.
Andrew Selous: Will my right hon. Friend give way?
David Davis: If my hon. Friend will forgive me, I will not. I am trying to give way to as many people as possible, but once each. I am keeping a tally.
Paul Braithwaite of EMAG said:
“The proposed hardship scheme is totally inadequate, will take years to implement and looks like leaving 90 per cent. of victims out in the cold...Our members are truly outraged that this Government’s shabby response is continuing to treat us with contempt...We are bewildered at the hypocrisy of its latest £1.6 billion bailout”—
for the Dunfermline building society—
“while we have been left to twist in the wind.”
There are several precedents where the Government made payments to savers in such collapses. Since the ombudsman’s report in July 2008, the Government have acted to protect money held in Icesave and the Dunfermline building society, as well as introducing various bank bailouts. However, they still refuse to ensure that justice is done for the policyholders of Equitable Life. Why?
The Government stand alone in their position on this issue. Given the evidence, their stance is unjustifiable, and it is unsupported by anyone who has considered the issue to any great extent. It is clear that their action is driven by a concern to avoid spending money—the expectation is that the costs will be between £3 billion and £5 billion. It is understandable that the Government want to balance the extent to which the taxpayer and various agencies pick up the risk, but their action leads us back to where I started. There is an unbreakable chain between a finding of maladministration, a finding of injustice arising from that and the need for a compensation scheme that will, in practical terms, deliver justice for those people, 15 of whom are dying every day. Those people will suffer not only financial but emotional distress because their situation has not been properly recognised, which is why I introduced this debate.
Mr. Bill Olner (in the Chair): Order. A considerable number of Members want to participate in the debate. I will try to call as many as I can, but Members will obviously need to keep their comments fairly brief because the winding-up speeches will start at 12 o’clock.
11.23 am
Daniel Kawczynski (Shrewsbury and Atcham) (Con): I congratulate my right hon. Friend the Member for Haltemprice and Howden (David Davis) on securing this timely debate.
In December, on the Floor of the House, I asked the Prime Minister whether the Government would make a statement before the recess in response to the parliamentary ombudsman’s report, and he assured me that that would happen. Of course, it did not and, as my right hon. Friend said, we had to wait until the early part of this year before the Chief Secretary finally gave her derisory, short response to this mess. That brief example of the Prime Minister promising me a statement, but that promise not being fulfilled, just shows that the Government’s policy on this issue has been drawn up on the back of a fag packet. I am disappointed by the lack of seriousness with which they are treating the emotion and anger that my right hon. Friend so aptly described.
Quite extraordinarily, the parliamentary ombudsman, Ann Abraham, has issued a report under section 10(3) of the Parliamentary Commissioner Act 1967, and that has happened on only four occasions previously. That shows how angry she is that her report has been so flagrantly dismissed and that the issue has not been taken care of.
Stephen Hammond (Wimbledon) (Con): My hon. Friend raises an important point. A number of constituents have corresponded with me about the failure of Equitable Life and about their troubles. However, other constituents have also corresponded with me about the Government’s failure to observe the recommendations that the ombudsman set out in the nuclear option. It is not only the poor policyholders affected by the Government’s decisions who are scandalised, but other people, who have nothing to do with Equitable Life.
Daniel Kawczynski: Absolutely. All parliamentarians have a responsibility to protect the parliamentary ombudsman. She plays a very important role, and if we do not do everything possible to ensure that the Executive fulfil their obligation to listen to her, we are not doing our duty as Members of Parliament.
Andrew Selous: Does my hon. Friend agree that the Government’s treatment of the ombudsman is in fact a form of contempt of Parliament because the ombudsman is an Officer of this House?
Daniel Kawczynski: I totally concur. Although I am, of course, interested in my Shrewsbury Equitable Life policyholders, the treatment of the parliamentary ombudsman is precisely the reason why I set up the all-party group on justice for Equitable Life policy holders. I wanted not just to help policyholders, but to ensure that our parliamentary ombudsman’s findings are listened to and that her position is respected.
As of yesterday, more than 100 Members of Parliament had joined the group. If the Minister looks at the list of their names, he will be startled to see the number of
Labour MPs who have joined. His Government have a relatively small majority, which has decreased recently, so he should bear in mind the extent of anger among his colleagues and how determined they are to see justice.
I pay tribute to EMAG and Mr. Paul Braithwaite, whom I have asked to be the group’s secretariat—they do an excellent job. The hon. Member for Norwich, North (Dr. Gibson), who is a Labour MP, is my co-chairman, and the hon. Member for Richmond Park (Susan Kramer), who is a Liberal Democrat, is the group’s secretary. Would any Members who have not joined our group please see me afterwards? This issue is very important, and I have come here today to publicise the all-party group, because we must increase its membership.
Anne Milton (Guildford) (Con): I congratulate my hon. Friend on establishing the all-party group. He will agree that many of my constituents can never be compensated for the anger and suffering that they have experienced. No compensation scheme ever fully gives people redress for the years of anger and sorrow that they have experienced as they have agonised over what happened to them. The all-party group is an important part of bringing those people and Members of Parliament together.
Daniel Kawczynski: I totally agree. The all-party group intends to use its position in the House of Commons to invite people to come to speak before us. We had a meeting yesterday with the communications director and other senior officials from Equitable Life. We will also be asking to see Sir John Chadwick and the Minister.
Mr. Hoyle: When the hon. Gentleman set up the all-party group, I was more than happy to say, “Yes, of course I want to be a member.” However—this has been said already, but it is worth repeating—the longer the compensation process takes, the fewer people will get the money that they deserve. Is it not time we used that old British fair play and put right the wrong?
Daniel Kawczynski: I agree: I was telling my constituents that British people are known around the world for having a sense of fair play. That is our branding, so to speak, in the international community. It is the lack of fair play that so irks many of us, and that is why we want justice.
Lastly, my right hon. Friend the Member for Haltemprice and Howden made a very important point about Sir John Chadwick. He is an eminent High Court judge but he has numerous other tasks. I have repeatedly asked the Government what resources they will give him to enable him to sift through the millions of documents that he will have to go through if a start is to be made on making payments. What resources is the Minister making available to Sir John Chadwick, and why has he engaged someone with so many other commitments when time is so pressing and every day 15 of the citizens concerned are dying? That is a scandal. We need far more attention and focus to be given to the issue. It must be resolved much more speedily.
Mr. David Burrowes (Enfield, Southgate) (Con):
This country may be known for fair play, but are not the Government increasingly known for rejecting ombudsman’s
recommendations? They have form on that. The court said there should be cogent reasons, but those have not been presented. All that we have is the back of a fag packet, without even an assessment of the impact of the hardship test.
Daniel Kawczynski: I totally agree with my hon. Friend. Time is pressing, and I want to end with a direct appeal to the Minister. This is not a party political issue. The Minister has seen how his hon. Friends feel. I will give him a list of Members of Parliament who have joined the all-party group. Many of them are Labour Members. I urge the Minister to do all he can to speed things up.
Ian Pearson: I agree with the hon. Gentleman that the issue is not party political. I strongly suspect that if the Conservative party were in the Government’s shoes they would take action similar to what the Government are doing. However, I particularly want to respond to the hon. Gentleman’s comments about Sir John Chadwick’s many other commitments. I have talked to Sir John; we talked about his availability before we made the appointment, and he is conducting his work as speedily as possible. I do not think that the hon. Gentleman should believe everything that he reads in the Daily Mail.
It is true that Sir John visits Grand Cayman for three short sessions of the Court of Appeal each year, and is required to be in Dubai for two single weeks in the year, but those are the limits of his commitments, and none of the other appointments occupies a substantial part of his time. I am confident that Sir John is on the case and is doing his work, and I hope to give an update on that.
Daniel Kawczynski: I thank the Minister. We shall call Sir John Chadwick to the group and ask him his views directly. Of course it is important for the group to establish whether he has the resources and time to enable him to carry out the work as speedily as possible. I do not doubt the Minister, but we want to ask him the question ourselves.
Mr. Gordon Prentice (Pendle) (Lab): I am wrestling with the Chadwick point. Sir John must interpret the disproportionate impact test, but we do not know which policyholders are wealthy and which are poor. Sir John Chadwick has access to the records of Equitable Life but not to those of Her Majesty’s Revenue and Customs. That is a real conundrum: how to come forward with a disproportionate impact test that is equitable and just.
Daniel Kawczynski: I totally agree with the hon. Gentleman. I suggest that if he has an interest in the issue—and he is clearly very knowledgeable about some of the issues—he should actively participate in the group, and come along to the meeting to which we invite Sir John. I shall check that he signs up to the group before too long.
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