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as has been said,

The parliamentary ombudsman's second report, "Injustice unremedied: the Government's response on Equitable Life", is scathing about the inaction on her initial recommendations from July 2008. Indeed, she said in that report:

as my hon. Friend the Member for Cannock Chase pointed out,

I said that I would take a little of the House's time in highlighting some of the cases that have been brought to my attention by constituents. I want to concentrate on one case only, which I am sure will ring a bell with many Members. This particular lady, Mrs. H of north Leeds, told me that her modest income of £200 a month was reduced overnight to less than £100, although she now receives about £120. She is 83 years old. She was dependent on that £200 each month, so when it was initially reduced by more than half, she found it hard to cope financially. It was only the help from her ex-husband
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that kept her going. However, she still struggles every month, owing to the continued shortfall in income.

Why, then, is the regulator to blame? We have heard a number of views on that this afternoon. Surely investors must have understood that their investments could decrease as well as increase. How could Equitable Life maintain a rate of return and a guaranteed annuity rate beyond those of any competitor in the market? Those are the questions that Ann Abraham addressed in her initial report of July 2008, which took four years to complete. Her answers are at the heart of the anger expressed by investors through the Equitable members action group. At the core of the problem is the fact that Equitable simply could not meet its obligations-obligations that it had made for itself, because it had made no provision for guarantees against low interest rates on policies issued before 1988.

We know also that, following the House of Lords ruling in July 2000, the society stopped taking new business in December of that year, which effectively spelled the end for Equitable. More than 1 million policyholders found that they faced cuts in their bonuses and annuities, which caused a huge loss of income-income on which many of those small investors depended. After all, the average investment for the 500,000 individual policyholders was just £45,000, which even at its height yielded no more than £300 a month, according to EMAG.

As has been pointed out, we in this country, along with many countries in the western world, have a growing problem: the problem of an ageing population that needs to be encouraged to make greater provision for its retirement and old age, as the state will simply not have sufficient resources to provide enough money in statutory pension payments. That is a controversial issue and a source of great debate. The problem will only become worse as the years pass and the proportion of younger people in work declines in relation to those in retirement.

It is already clear that my generation-those in their mid-50s-will have to work longer before retirement, whichever party wins the next general election. However, unless we can save more and see our savings grow securely, there will be little confidence that there is any point in saving at all. I believe-many other Members have also expressed this view-that the Equitable Life scandal has severely reduced the confidence that the people of this country have in the principle of saving for retirement.

Anne Milton: Does the hon. Gentleman agree that there are two emotions? The first is the anger of the policyholders, who are angry that they have been let down by a system that they believed in, and the second is the one that he is talking about, involving trust. There has been a huge loss of trust, not only in the Government, but in the ability of those in this House to bring such matters forward, as the hon. Member for Cannock Chase (Dr. Wright) pointed out earlier.

Mr. Hamilton: I agree; indeed, the situation is much more serious. People always lose confidence in the Government of the day, because they blame them for everything. However, people have enormous trust in this House. They may not like MPs or Parliament generally, but they like their constituency MP. They look to us to come here and use this House to redress injustice. It is the loss of trust in this House that worries me far more than the loss of trust in the Government-a Government whom I, of course, wholeheartedly support.

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Robert Neill (Bromley and Chislehurst) (Con): I follow the hon. Gentleman's interest in such matters. Following that point, does he agree that the loss of trust is compounded in this instance? Not only is there an appearance of failing to take on board the recommendations of independent adjudicators, but people still have some trust in the courts system, and the condemnation in Lord Justice Carnwath's judgment of the stance taken is comprehensive. If the House ignores the judgment of distinguished lords justices sitting in the divisional court, it will make people's lack of faith and trust in the House even worse, and compound this very real problem. As the hon. Gentleman says, it will create real difficulty for people on limited incomes.

Mr. Hamilton: That is why I agree with many right hon. and hon. Members-especially my hon. Friend the Member for Cannock Chase-that the decision on how we should respond must be a matter for this House. The hon. Member for Reigate also made that point. I fully accept that there are huge implications for the Treasury and for taxpayers' money, but we have seen far greater sums of money being used in the past 12 months to rescue our banking system-rightly, in my opinion. Surely, Equitable Life investors who have lost out as a result of regulatory failure deserve the justice not only that the courts have said they should receive but that the ultimate court in the land, this House, thinks they should have. I urge the Government to allow sufficient Government time for a full, proper debate on this matter, with a free vote, so that we can make our views as Members known to our constituents and give our constituents the justice that they deserve.

If investing a large proportion of earnings results in that money either disappearing or being greatly reduced in value, the resulting lack of trust in the system will lead to increased poverty in old age. It will also remove any incentive to make personal provision from a lifetime's earnings. In the end, the state will have to foot the bill, thus increasing the cost to us all through taxation.

It has been said that this is a scandal that affected only the well-off, and that ordinary people with relatively small savings were not involved. Let me remind hon. Members and the Government that EMAG told the Public Administration Committee that

Daniel Kawczynski (Shrewsbury and Atcham) (Con): I am grateful to my fellow co-chair of the all-party parliamentary group on Equitable Life for allowing me to intervene. His comments about Members of Parliament scrutinising this issue resonate with me. Does he agree that it is important for outside bodies-and for Sir John Chadwick in particular-to come before the House and to be held to account? Does he share my concern that Sir John Chadwick has refused to come to Parliament to interact with members of the all-party group?

Mr. Hamilton: My honourable co-chair makes a good point. It has already been pointed out that, since Sir John Chadwick was appointed, he has refused to come to the House or to deal with individual Members. It is time that members of the all-party group, on behalf of all
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Members, were able to meet him and question him on the way in which he is setting about the business of remedying this injustice. I urge him from these Benches-I hope on behalf of all hon. Members-to talk to Members of Parliament as soon as he possibly can. It is important that he should be accountable to us, and that our constituents should be able to see that he is not refusing to talk to us.

I conclude by once again asking the Exchequer Secretary to the Treasury to answer the four questions that I put at the end of my Adjournment debate on 24 June. I hope that the House will forgive me for reiterating these points. Sadly, she ignored them completely at the end of that debate, and I hope that she will be able to respond to some or all of them today.

First, will she amend Sir John Chadwick's terms of reference to include all the recommendations of the parliamentary ombudsman's report, "Equitable Life: a decade of regulatory failure"? Secondly, will she agree to implement EMAG's proposal that Parliament set a total amount of compensation for individual policyholders affected by the collapse of Equitable Life, then allow the proposed tribunal to get on with the job of distributing that money quickly and fairly? Thirdly, will she accept that the delay caused so far has meant that many policyholders who suffered through no fault of their own have either endured financial hardship or died in the meantime? My understanding is that 15 such policyholders die each day. Fourthly, does she accept that, for many, the phrase "injustice unremedied" has real meaning, and that it is about time that the hundreds of thousands of investors received real justice?

If the Minister can answer these questions positively, this injustice could be brought to an end rapidly and the Government would receive the credit for its resolution. If not, I fear that the resentment and bitterness will continue, with huge cost to the individuals who have suffered and to the country as a whole. I remind the House that justice delayed is justice denied.

2.45 pm

John Barrett (Edinburgh, West) (LD): I shall not take the full allocation of my time in the debate, to ensure that all my colleagues who wish to speak can also get in. I should like to thank my hon. Friend the Member for Twickenham (Dr. Cable) for his opening speech, and I shall try not to repeat the points that he made. I advise anyone reading this in Hansard that his speech is worth reading from start to finish.

I am delighted to have been called to speak today. I remind the House of a previous Liberal Democrat Opposition day motion on an issue of fairness and justice. At that time, many MPs from all parties got together and did the right thing. That day, it was for the Gurkhas, and common sense and decency prevailed. Equitable Life policyholders, who I am sure will be following today's debate, will be hoping for more of the same from the House today. Parliament was in the news last week for all the wrong reasons, and today's debate gives us a chance to show this place at its best.

It is a scandal that we even need to have this debate. Quite apart from the number of times we have spoken about this issue in this place and in Westminster Hall over the years, we have also had an ombudsman's report, a damning Public Administration Committee
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report, an almost unprecedented special report from the ombudsman and now a High Court ruling, all of which concluded that there is an injustice that needs to be remedied quickly. It seems that it is only the Government who do not get the message.

Today's debate takes place in the context of last week's court ruling. Treasury officials tried their best to spin the outcome, but it was clear to everyone, including the judge, that the policyholders were the principal victors. I was glad to hear yesterday that the Government will not be seeking to take the decision to appeal. Of course, we should remember that, were it not for the tenacity of EMAG in bringing the case to court, it is likely that the Government would have got away with their inadequate response to Ann Abraham's initial report. That raises this question: what use is an ombudsman, if they are simply ignored by Ministers and the Government? The fact that the ombudsman felt that she had to issue a special report to highlight the Government's inaction is a disgrace. This is only the fifth time in 42 years that the ombudsman has felt moved to use the so-called nuclear option, and it shows how serious the Government's negligence has been.

Daniel Kawczynski: The hon. Gentleman paid tribute to EMAG, and I echo that sentiment. Will he join me in particularly congratulating Mr. Paul Braithwaite, who has spearheaded this campaign? He has been to the House of Commons on many occasions to interact with the all-party group on Equitable Life, and he has really driven the campaign forward.

John Barrett: I am happy to concur with that.

A lobby of Parliament by Equitable Life policyholders is scheduled to take place next month. I have read that the lobbyists will be drawing our attention to the fact that 15 policyholders die each day waiting for justice while the Government drag their heels. It is a great testament to the policyholders that they are prepared to keep fighting for the cause not only for themselves, but for those who are no longer with us. Let us be very clear, however: they should not still have to be fighting.

Like all hon. Members, I have a great many constituents who been affected by the collapse of Equitable Life. They include Ian Fairweather, John Stepney, James Michael Morton, Hana Hornung and John Smith, among many others. Those people did the right thing and made provision for their retirement. The proposed payout scheme looks as though it will leave 90 per cent. of policyholders with little or no help at all. That is simply not good enough. In fact, it makes me think of my constituent, Joe Shepherd, who has been fighting for justice in pensions-not against Equitable Life-for 19 years. He has gone through three MPs and when I stand down at the next election, he will be into his fourth. He is now in his 80s and he is the last pensioner from the relevant company left, yet he has still not had justice. I dread to think how many Equitable Life people will be in the same position.

If Equitable Life policyholders are left with nothing, what message does that send out to the next generation, who are already reluctant to save towards their pensions? My constituents who have lost significant sums of money are justified in asking why Equitable Life is treated so differently from a failed bank. I have no good answer for them. At today's Prime Minister's Question Time,
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the Prime Minister responded to one of the later questions by saying that not one saver had lost money in a British bank. We in this place have to ask why the Government are not giving the same pledge to Equitable Life savers.

My hon. Friend the Member for Twickenham mentioned earlier that some Members were not elected to this place when the whole saga started. Many Members, for the same reason as me or for other reasons, will not be in this place when-hopefully-the payments start to go through. In my own city of Edinburgh, which has seen many Equitable Life members badly hit, I believe that a number of MPs, including a number of Labour MPs, will lose their seats at the next election. I think that they will have let down Equitable Life policyholders.

The treatment of Equitable Life policyholders is one of the great injustices of this Parliament. It is a mess of this Parliament's making and we need to sort it out and to do it quickly. The Government have just over two weeks to give their response to the High Court ruling. The great tragedy is that for too many policyholders, time has already run out.

2.51 pm

Dan Rogerson (North Cornwall) (LD): I start by congratulating my hon. Friend the Member for Twickenham (Dr. Cable) on introducing the debate and making use of this Opposition day to outline, as other hon. Members have said, what could have been done differently by the Government. It is very important to have this debate, carrying on from our previous debate in Westminster Hall. I thus congratulate my hon. Friend on his use of Opposition day time and, of course, on his excellent introduction and the way in which he framed this afternoon's debate.

I also pay tribute, as have others, to the Equitable members action group, to the all-party group and the Select Committee, which has examined the issue in detail. I also mention the work of the ombudsman: although at least one other hon. Member has commented on how long that took, it is nevertheless part of the process of getting us to where we are today.

Hon. Members of all parties have been assiduous in pursuing this issue on behalf of individual constituents, but also because most of us are motivated, I hope, by a sense of justice in all we do. I sometimes think that there is little more than a great injustice-whether it be to an individual or to a whole group of people-that can motivate MPs in taking hold of particular issues and not letting them go. This situation falls into the category of a whole group, as many people across the country are affected by the issue and they will continue to be affected by it until they have some form of resolution.

I am pleased that so many Members have had the courage of their convictions and signed early-day motion 1423, which I hope is a statement of intent for later today. What we are debating today is essentially the same principles as are in the motion. Although I understand that Labour Members find themselves in some difficulty in thinking about how to vote on an Opposition day motion, I hope that they can set it aside, because, as has been said, today provides our only opportunity. While many hon. Members have expressed a hope that the Government will bring something forward to return to the issue later on, I have to say that the evidence thus far does not lead me to the conclusion that that will happen.
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This may well be the only opportunity that the House has in the near future to get something on the record and have a vote on this crucial issue. I urge Labour Members-I understand their difficulty-to carry through what they have already done in signing the early-day motion.

In 2000, what happened through Equitable Life's default was hugely painful for all those who had invested, but those involved in the mismanagement of the funds are not solely to blame. The Government as a regulator and the agencies that the Government established to regulate financial matters have been shown, sadly, to have failed time and again in recent years. We must be absolutely clear that those failures were under the watch of this Government and their predecessor, as they looked into what was going on in Equitable Life. The people who invested in good faith expected the regulatory mechanisms to guarantee their interests, so they feel very let down. They have, of course, been let down particularly badly.

What action, then, can we take finally to offer some justice? The Government say that ex gratia payments are an adequate mechanism for providing that, but I am not convinced that they are. Members of the action group, who have acted very effectively on behalf of all the Equitable members, certainly do not feel that that is the case. Of course, whatever happens will cost money, but as other hon. Members have said, the Government have found the money in other circumstances-to bail out the banks, for example. My hon. Friend the Member for Twickenham made the point that investors in banks found their interests protected and he asked why Equitable members should not also find their interests protected in the same way.

Money has also been squandered in other recent Government pet projects-on big IT projects and certain foreign adventures that have been launched against the demonstrated will of the people living out there in the relevant countries. Money has been found for those things, but not, it seems, in this case. It may well be painful to find the resources to provide this measure of justice, as we are being invited to do, but however difficult it is, the central issue is natural justice and it must be met.

At every turn, the Government have dragged their heels. Many Members have sought to focus on the imperative to get this issue dealt with as soon as possible because some of the people involved are, sadly, no longer with us-and there are others who, sadly, will not live to see the benefit of any compensation scheme. We must not allow any imperative to act against the issues of fairness that EMAG has raised all along.

In other fields, I know that the Government have sought to speed the processes up. Sometimes, in my view, they have done so against the interest of securing the right resolution. In a planning Bill of a couple of years ago, for example, there was an absolute dedication to getting all major infrastructure planning issues sorted out in six months; what is important to me, however, is reaching the right decisions in these circumstances. Yes, time is important, but it is not the only thing that we have to consider.

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