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I have been in regular correspondence with a number of my constituents affected by Equitable Life. There are about 50 or so of them, but I well know that there are many more in my constituency who have not contacted
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me about it. They have contacted EMAG and may be cynical about whether they will ever get the resolution they want and deserve. In every one of our constituencies, there are so many people affected, and they are watching what we are discussing here this afternoon.

I spoke to a couple of constituents this morning. What touched me is that they both prefaced their remarks by saying, "Others are far worse off than I am. Others are going to be affected worse. My retirement plans have been affected, as has my ability to do things like replace my car, which is currently on its last legs, but I have lost only £9,000"-and in the other case, it was between £13,000 and £14,000. Those are significant sums for those people, but I thought it revealing that they adopted the approach of talking about others who were even worse off than themselves.

We clearly need a scheme that is reasonable and takes account of the constraints on resourcing, but it must also compensate properly and it must not be a token effort. In order to be reassured that that is the case, it needs to be overseen, as my hon. Friend the Member for Twickenham said earlier, by an independent tribunal. He set out how that could happen without setting aside the work put in up to now.

Robert Neill: I very much agree with the hon. Gentleman, whose experience in his constituency is similar to mine. Is not the conclusion he advances reinforced by the findings of the Public Administration Select Committee, which rightly made it clear that compensation was

Should that not be the principle that underlies any decision taken on this matter?

Dan Rogerson: As ever, the hon. Gentleman speaks with great authority, and I agree with his comments. As many hon. Members have said, we must consider an approach that is based not on issues of hardship and on means-testing, but on justice. The Government's written responses have not contained a good enough apology for the failings that occurred, and it would reassure people to see that in writing. We need a fuller apology, something that provides hope for those Equitable members who are affected, and genuine measures that offer them justice.

Earlier, I probed those on the Conservative Front Bench on their proposals, and I completely understand their desire to push forward and criticise the Government for the speed of their response. However, bearing in mind that they have added their signatures to the motion tabled by my right hon. and hon. Friends, which is welcome, I am disappointed that they are stepping back a little from an independent tribunal, which is crucial to reassuring Equitable members that their interests are being looked after.

Mr. Denis MacShane (Rotherham) (Lab): The hon. Gentleman makes his case calmly and fairly, and it will have an echo in my constituency. It is good that he is putting ideas in front of us. Obviously, in the Division, which will be on party political lines, we will vote as we will. May I say that I hope the Government take on board some of the ideas put forward, because an injustice was done and needs to be put right? I congratulate him on his thoughtful and measured case.

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Dan Rogerson: I am grateful to the right hon. Gentleman for his kind remarks, although I am perhaps slightly disappointed by the signal he has sent as to which Lobby he might find himself in later. I hope that he will take the chance to reconsider that on the basis of further contributions.

John Barrett: Will my hon. Friend expand on why the decision ought not to be made on party political lines?

Dan Rogerson: Many hon. Members have served in local government, where, when difficult decisions are faced, administrations often talk about being above, and not wanting to get into, party politics. However, when the boot is on the other foot, they are quite happy. When the courts have handed such an issue back to the House, for it to respond to the ombudsman, hon. Members must take a view based on the interests of Equitable members in their constituencies, irrespective of which party has put forward the proposals. I hope that they will do that later, and as has rightly been pointed out, many Members signed the early-day motion and put their comments on the record. Therefore, if they decide to vote with us, it should be easier for them to justify that decision to their Whips.

My hon. Friend the Member for Edinburgh, West (John Barrett) also drew a strong parallel with an earlier Liberal Democrat Opposition day vote on the Gurkhas. I had the honour of being a Teller on that occasion, and in what I hope is a sign of things to come, I delivered the verdict to the House. Tonight, I hope that hon. Members across the House will unite to send a strong signal to Equitable members and the Government that the Government's proposals are inadequate, that we need to focus on what the ombudsman, EMAG and people across the country have said would be the right, meaningful compensation, and that we need to do that quickly.

3.3 pm

Mark Durkan (Foyle) (SDLP): Other right hon. and hon. Members have rightly raised the issue of the proper standing and treatment of the parliamentary ombudsman by the House and by Government. At a time when the House's reputation has taken all sorts of damage over expenses, we need to remind ourselves that people have a more fundamental question about not the expense but the worth of the House. When Equitable Life policyholders see the clear findings of the ombudsman evaded and dismissed, and the work and worth of the ombudsman's report denigrated by Government, that raises questions about the credibility of the parliamentary apparatus.

Given the number of Members who have signed early-day motions and written replies to Equitable Life policyholders, those policyholders know that a clear majority in the House wish to see proper remedy for their injustice. But when we allow ourselves to be frustrated by procedural chicanery, they question the worth, relevance and responsiveness of the House. If even a Select Committee being clear in its findings and conclusions on the issues can count for little, we should join the public in being worried about the role and relevance of the House.

It has taken a court case to bring acknowledgement of the kind that we have seen from the Government this week, in accepting findings of the ombudsman that they had previously resisted and rejected. I say to hon. Friends who approve of the terms of the Government's amendment that we should remind ourselves that those
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terms would probably be different had last week's court case not taken place, and the Government not moved to accept the findings in the way that they did.

I am also a little perturbed that the Government have sought to downplay the scale and nature of some of those findings, and to minimise the court's findings and the fact that it came down heavily against the position taken persistently by the Treasury. For the Government to say, "It was only on this thing that the court came down against us, and they were for us on something else," is like trying to pretend that a tyre is only flat at the bottom. It is simply not a credible position. Thankfully, the House has the benefit of that important judgment, and the Government are now showing the wisdom and responsiveness at least to accept key aspects of the judgment, which I welcome.

However, we know from the written ministerial statement and some of what was said today that serious questions still arise. I listened to the Chief Secretary tell us that the Government's ex gratia payment scheme, based on Sir John Chadwick's proposals, will be up and running by spring. Therefore, we must ask ourselves: what exactly does "up and running" mean? Does it mean that the scheme is coming soon, or will be open for business soon? I hope the Exchequer Secretary will tell us later.

Mark Lazarowicz: I hope the Exchequer Secretary will clarify that point, because my understanding was that the scheme would be available by the spring, not that money would be going out by then.

Mark Durkan: I thank my hon. Friend for amplifying my question. We all want to know what "up and running" means. We also heard the Chief Secretary, in reply to a question, say that he had spoken to Sir John Chadwick, either before the summer or in early summer. Another hon. Member asked whether Sir John Chadwick had adequate resources or needed more. Since the judgment, however, the scope of Sir John Chadwick's work has expanded. Instead of going back to July 1995, it must go back to July 1991. I wonder whether the Chief Secretary should be talking to Sir John Chadwick again to see whether, in the light of the judgment, he has sufficient resources. If, as the statement admits, his work has additional scope, does he not need additional resources? As other hon. Members have raised the failure of Sir John Chadwick directly and sensibly to engage with the all-party group or any other Member, such engagement might be usefully explored, so that we fully understand the implications of the court case for his continuing work.

Sir John Butterfill (Bournemouth, West) (Con): The hon. Gentleman will know from my previous interventions on the subject that many of my constituents, including members of my own family, have been affected. Does he agree, however, that it is strange that the Government should still hang on to some vestige of a means test for people who have suffered so badly? During the banking crisis, they did not means-test those who might have lost their money in a bank; they paid up. Why should this be different?

Mark Durkan: The hon. Gentleman has made his point very eloquently. Many of us have questioned the Government's announcement that ex gratia payments will be made to people who have suffered "disproportionate impact". I understand why the Chief Secretary or other
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Ministers may be unwilling to give a single example of disproportionate impact, and probably cannot provide a comprehensive definition of everyone who has suffered one, but could we at least be given a definition of a proportionate impact? That would enable us to identify those who might be counted out, although I have certainly not heard from anyone who feels that he or she has suffered proportionate impact.

Daniel Kawczynski: The hon. Gentleman mentioned the resources that Sir John Chadwick had at his disposal, and that is critical to the speed with which the issue will be resolved. However, EMAG has expressed the fear that some of the resources may be inappropriate, because one of Sir John's most important advisers has been seconded by No. 10 Downing street. EMAG feels that that constitutes a conflict of interests.

Mark Durkan: Obviously there are various arguments to be made about foxes and chickens, but, given that the Government have accepted the court judgment, I think we should be asking how we get to where we need to be from here, rather than necessarily testing any of the personnel who have been involved so far.

This situation, which long predates my time in the House, has continued for far too long and affected far too many people. Those people were bemused by jargon; then, just when the way seemed clear, there was obfuscation and evasion. It has been like one of those Homer Simpson nightmares. Every time people think that the nightmare is reaching a conclusion, there is some new twist, and off it goes in another awful direction. They are left bewildered, and with a further sense of loss, suffering and frustration to add to their ongoing loss. We need to bring this scandal to an end by providing a remedy for the clear injustice that has been identified.

As the hon. Member for Edinburgh, West (John Barrett) pointed out, people are particularly at a loss to understand why their situation has dragged on for so long, and why the Government have been so intensely resistant when it is possible to apply so many measures to underwrite the losses-or potential losses-faced by others such as Icelandic banks. People will inevitably and sensibly draw those comparisons. It is not a matter of their being jealous or unduly concerned about themselves. Those are natural questions asked by policyholders, and asked by us, as public representatives, in the House.

If it is right to underwrite others in the context of the banks because we want to underpin the stability of the finance system, surely it is right to provide a proper remedy for these policyholders so that we can underpin confidence in the pension system in the future. If we want to encourage people to save for their pensions, and if we want to encourage them to become involved in schemes such as this-as we are doing increasingly; indeed, we are imposing on them a requirement to become involved-we must at least give them some basis for confidence. That is why we need to move further and faster.

We know that EMAG has said that, for the purpose of an overall outcome, it wishes the House to identify a sum that would be available to remedy its members' plight. In the context of either an outright compensation scheme or the ex gratia payment scheme to which the Government have referred, I hope that the Exchequer Secretary will tell us whether, if the scheme is to be up and running by next spring, the Government will announce
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a clear quantum sum that will be available. Will we hear from them by the time of the pre-Budget report, for instance? If in telling us that the scheme will be up and running by the spring of next year, the Government want us to believe that money will be paid out during the next financial year, when will we hear what quantum will be available? If the Government continue not to give any indication of the amount that they intend to make available, we shall inevitably have doubts about their real intent.

I know that the issue of the money will be difficult, but in a sense it brings us to the real issue of what is or is not considered by the Treasury to be disproportionate. When a Treasury statement talks of policyholders suffering a disproportionate impact, we know that the Treasury's real motivating concern is fear of the disproportionate impact of a compensation scheme on the public purse. If that is the real fear, let the debate be clear about that, let the Government be clear about it, and let the Government be clear about what they think would be a proportionate sum of money to offer. The rest of us, having considered the issue properly in today's debate, can then decide whether that amount is adequate, realistic or meaningful.

3.15 pm

Mr. Mike Weir (Angus) (SNP): As a number of Members have observed, this matter has been dragging on for many years. After all the years that I have spent dealing with it, I have a file full of letters and reports that would choke an elephant. Like other Members, I have many elderly constituents who are affected by the collapse of Equitable Life, and, sadly, some have died waiting for justice. Other Members have also made a point with which I strongly agree: that the Equitable Life crisis is part of a much more general crisis of confidence in savings and pensions. If we do not get this right-if we do not demonstrate that people can expect justice when things go wrong through regulatory fault-we shall have a serious problem with persuading people to save for pensions and their own future.

Many of my constituents, like those of other Members, have approached me and asked, "If the Government can bail out the banks, why will they not do anything about my problem with Equitable Life?" We can argue about the macro-economics, the economy and the need to bail out the banks, but it is a reasonable question. However, there is a better analogy to be made, although I appreciate that it is not exact. The Government instituted the Pension Protection Fund. They rightly took action to help people who found themselves in danger of losing out when company pension funds were becoming insolvent-ensuring that they received a large proportion of the available funds so that they would not face poverty in retirement-and to shore up the sector.

It seems to me that the same principle should apply in the case of Equitable Life. Equitable Life was effectively a pension scheme for, in particular, many self-employed small business people. Those people invested in Equitable Life policies because Equitable Life was seen as a large and very sound company. Many financial advisers pushed those policies over many years, especially-as was pointed out by the hon. Member for Richmond Park (Susan Kramer)-to small business men. Now those people
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find that their pension pot has effectively disappeared, or at least been severely reduced. What is the difference between them and those whose company pension funds become insolvent, other than the fact that they are losing out partly because of a failure of regulation? Indeed, in many ways they are in a stronger position than others to demand compensation. That is particularly true in view of the fact that, at least for part of the time involved, the regulator of Equitable Life was the Treasury.

I was deeply troubled by what the Minister said in his opening speech. He said that there was no obligation for compensation to be provided. I cannot believe that that is the case, given that the Government were effectively the regulator for at least part of the time. I understand to some extent the Minister's concern about the impact on public funds of compensating all Equitable Life policy-holders who have lost out as a result of the failure of regulation, but I feel that to impose the scheme that the Government are proposing goes against natural justice. If a loss has been suffered through maladministration, surely the victim of that maladministration is entitled to compensation regardless of his or her personal circumstances.

There is a question that still hovers over this issue. It is to do with the possible means-testing of the victims of the Equitable Life collapse. The Minister has been asked on many occasions in the debate to define disproportionate loss. It is not at all clear what that means-how it will be determined and what it means for people. Given the Minister's comments, it seems to me that in the circumstances under discussion, the concept of disproportionate loss clearly amounts to a means test applied to the person who has suffered a loss from the failure of Equitable Life. Even if that is the case, it is still not clear how the concept is to be determined, so we need clarity. Is the Minister talking about a disproportionate loss on a particular class of investment or is this about the personal circumstances of an individual? We need to know.

The Minister said that the Government's position was an attempt to speed up the system, and after 10 years it could certainly do with some speeding up. He attacked the alternative system involving a tribunal by saying there would have to be a case-by-case investigation-but if the Government are determined to impose a concept of disproportionate loss and that is to be conducted through a means test on the individual, how will that be done unless each case is gone through separately, looking at the loss suffered and the personal circumstances of the individual? It therefore does not seem to me that imposing this strange concept, which is nowhere explained, will speed up the system at all. I fear the system will grind even closer to a halt.

Equitable Life policyholders have waited 10 years for some justice. We have inched forward slowly. In January, I spoke in a debate on this issue and I described the Government's position as being like that of an old lag appearing in a criminal court who starts with an outright denial, but as the evidence accumulates reluctantly accepts he will have to plead, and then makes a half-hearted plea and tries to wriggle out of the consequences of his actions later. That is exactly the position the Government are in. Even after the judicial review, they tried to spin things to suggest that they had in some way won it. It was very clear that they had not. The judge ordered that this matter be re-examined. The Government must throw
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up their hands and admit that there is a responsibility here, and introduce a system that is clear and fair, and will quickly deliver for Equitable Life policyholders.

I was disappointed in the comments of the hon. Member for Fareham (Mr. Hoban), who opened for the Conservatives, because their policy on this is unclear. From the comments made, it seemed to me that if by any chance they were to form the next Administration nothing much would change, because the hon. Gentleman was unwilling to answer straight questions about how they would deal with the situation. It seemed to me that if the Government manage to get a system up and running by the time of the next election, the Conservatives would just continue it. I ask the hon. Gentleman to make it clear what the Conservatives' position will be. If a system is up and running by that time, will they reopen it and look at the tribunal system, and give real justice to Equitable Life policyholders?

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