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3.23 pm
Lorely Burt (Solihull) (LD): I shall be very brief, as I know that other Members wish to speak.
I fervently hope that we are now reaching the end of this decade-long saga, in which 30,000 people have died waiting for justice. One million investors have lost up to half their pensions, amounting to an estimated £5 billion, and they were people who did the right thing: they saved for their retirement, but they have been let down by a series of regulatory failures by this Government.
What does this mean in human terms, however? I shall explain by recounting just two stories that west midlands Equitable Life investors have told me. It means a couple having to sell their lovely retirement bungalow and move into a caravan. It means that instead of going to the shops with enough money to be able to enjoy the experience of shopping and buying what was described to me as "nice things", they have to scratch around for the cheapest reduced items just to make ends meet. It may not mean destitution in many cases, but for most of such people it means the destruction of a quality of life that they saved for, made sacrifices for and deserved.
My hon. Friend the Member for Twickenham (Dr. Cable) has outlined the history of this sorry episode and I will not repeat it now. I do not want to dwell on the shameful history of how this Government have prevaricated ever since the publication of ombudsman Ann Abraham's report in July 2008, so aptly subtitled "A decade of regulatory failure", although I entirely share her frustration at the prevarication of the Government in their response, which prompted her to take the unprecedented step of issuing a second report this May, called "Injustice unremedied". I am not going to dwell on the Government's response, which was to attempt to exclude up to 90 per cent. of pensioners from any compensation at all, but I do wonder how a Government who purport to be a compassionate Government could allow so many people to suffer for so long, ignoring the ombudsman's findings and trying to evade paying compensation.
I welcome the decision of Lord Justice Carnwath and Mr. Justice Gross backing the decision of the ombudsman that compensation should be paid back to 1991, not 1995 as the Government wanted, and I implore Sir John Chadwick to come up with a compensation scheme with the utmost urgency so that as few more pensioners as possible have to die without ever seeing justice in their lifetime.
I ask the Minister to say what will happen in respect of pensioners who have died. My understanding is that their money will be forfeited altogether, so that neither they nor their surviving relatives will ever benefit. If this is the case, is there any provision for making some compensation available to their estate even when, because of the great length of time this has taken, it is not only they but their families who would otherwise lose out?
Finally, as a final act of compassion, I ask the Government to ensure that a compensation scheme will be in place and payments will already be being made by the time they leave office and we have a general election next year.
3.27 pm
Daniel Kawczynski (Shrewsbury and Atcham) (Con): I apologise for not being present at the start of the debate; I had to attend a pressing constituency meeting.
I set up the all-party group on justice for Equitable Life policyholders primarily because of my belief in the parliamentary ombudsman system. We must protect the ombudsman's findings, and she has stated unequivocally that there has been regulatory failure. We as parliamentarians have to do everything possible to ensure that her findings and her position are respected in this House.
As a constituency MP, I rely on ombudsmen on many occasions to assist me with difficulties that constituents are facing. The ombudsmen work so hard and do such sterling work that I wish to pay tribute to all of them. If their views are ignored, that simply chips away at their position and undermines them.
The all-party group has become very large, as many Members of Parliament have joined it. I wish to pay tribute to the hon. Member for Leeds, North-East (Mr. Hamilton), who is my co-chairman, to the hon. Member for Richmond Park (Susan Kramer), who plays an active part in the group, and to my right hon. Friend the Member for Haltemprice and Howden (David Davis), who takes a great interest in it and comes to our meetings. Some 42 Labour Members of Parliament have joined the group, some of whom represent key marginal seats. I will be watching closely how they vote this evening, because they have joined an all-party group that seeks justice for Equitable Life policyholders and I do not see how someone who is a member of such a group can vote against this Liberal Democrat motion. As has been stated on many occasions, Equitable Life policyholders have suffered terrible financial problems and are very frustrated by the lack of action. As we have also heard today, every day 15 of those policyholders die.
My other main gripe is with Sir John Chadwick. I do not mind telling you, Madam Deputy Speaker-although I will probably get into terrible trouble for saying this-that I have called for his resignation, such is my frustration with him and with his refusal to interact with the all-party group. I get very concerned when people who have been appointed by the Government, and who have such extraordinarily important roles to play and who are working on issues that affect so many of our constituents simply refuse to come to the House of Commons to interact with parliamentarians. We are trying to represent our constituents by trying to lobby Sir John. He has stated that we can write to him like anybody else-but that is simply not enough. As a democratically elected
parliamentarian who represents 74,000 constituents, I demand to have the opportunity to call him before us and to engage with him. His approach shows great arrogance on his part, and I very much regret that.
The other thing that I wish briefly to say is how disappointed I am with the right hon. Member for Rotherham (Mr. MacShane), who is no longer in his place. He intervened on the hon. Member for North Cornwall (Dan Rogerson) to say that tonight's vote would, of course, be on party lines. What a disappointment that is. The right hon. Gentleman must have Equitable Life policyholders in his constituency who have been affected by these events, and one would think that Labour MPs would, as happened in the Gurkha debate, show conviction by voting against the Labour party. I have voted against the Conservative party on one occasion-over the privatisation of Royal Mail-although it is difficult to vote against one's own party and it takes a great deal of courage. I might write about it in my memoirs-
Daniel Kawczynski: Indeed. As long as one is not rebelling against one's party all the time, the Whips realise-
Madam Deputy Speaker: Order. Perhaps the hon. Gentleman could face the Chair; it assists not just the occupant of the Chair, but the Hansard writers.
Daniel Kawczynski: Forgive me, Madam Deputy Speaker. I was just saying that it is very important, on occasion, to vote against one's party and to rebel.
I shall end my contribution by saying that I received a letter from the Equitable members action group containing the response from one Labour MP. That MP, who is a member of the all-party group, had said, "No way am I voting on this Lib Dem motion. This is just party politics by the Liberal Democrats and I am not prepared to support them." I disagree with that Labour Member. Although I am not a great fan of the Liberal Democrats, I believe that on this occasion they are raising something on one of their Opposition days that is of vital importance to our constituents. It is not politics on the part of the Liberal Democrats, because I feel just as passionately as they do about seeking justice for Equitable Life policyholders. I urge Labour Members to think about the ramifications here. If they are members of the all-party group, they should show respect to their decision to join the group and to their constituents, and they should remember that at the next general election, a lot of the policyholders will be voting on the basis of how their Member of Parliament votes tonight.
3.34 pm
Julie Morgan (Cardiff, North) (Lab):
I am thankful for the opportunity to speak briefly in this debate. First, I pay tribute to the Cardiff and south Wales committee of EMAG. Many of my constituents in north Cardiff and the surrounding area are affected by the issues we have debated today. I have had meetings in the constituency with EMAG and have met many individual constituents on the issue, too. I am also a signatory to early-day motion 1423. Let me repeat that I know that we are not
talking about wealthy, rich people. The people whom I have met are suffering because of what has happened to Equitable Life.
My concerns relate partly to the position of the parliamentary ombudsman. I am a member of the Public Administration Committee, so I have been part of the process and a contributor to the reports that the Committee has produced. I support the comments ably made by the Chairman of that Committee, my hon. Friend the Member for Cannock Chase (Dr. Wright). I believe that it is very important to preserve and support the position of the ombudsman. My hon. Friend said that he considered this matter to be House business, although he did not think that the Whips would approve of that. I am thinking about it in the same sort of way. It is very important that we should support the ombudsman in her findings.
I am also concerned about the decision as to who will be disproportionately affected-an issue that other hon. Members have mentioned-and the means test. I am very concerned about the situation. If someone has lost money through accepted maladministration, after we have removed the effects of the market and mismanagement by Equitable Life, should a means test apply in deciding what compensation should be paid to those members? I am concerned about what "disproportionate effect" means.
I welcome the Government's decision to accept the court's ruling and extend the number of people who could be eligible for payment. However, I am also concerned that that might mean smaller payments. Could the disproportionate impact consideration be applied more stringently? I welcome the decision, but I am concerned about those implications, too.
As a member of the Public Administration Committee and as someone who has signed the early-day motion and wants to support members of the scheme strongly in my constituency, I feel that I will be unable to support the Government this evening. I understand the dilemma for the Government about having to pay out large sums of money, but I have a duty to my constituents, as well as to the role that I have played on the Public Administration Committee, to follow that course of action.
3.37 pm
Mr. Jeremy Browne (Taunton) (LD): This has been a high-quality and important debate and I congratulate my hon. Friend the Member for Twickenham (Dr. Cable) on kicking it off and setting exactly the right tone for the subsequent deliberations. All hon. Members who had the opportunity to participate-my hon. Friends the Members for Solihull (Lorely Burt) and for North Cornwall (Dan Rogerson) among them-spoke movingly about how these issues affect real people. It is easy to get wrapped up in the process and in which Committee said what about which report, but we should always remember that hundreds of people in each of our constituencies have had their quality of life materially affected by the matter that we are deliberating this afternoon. Others touched on the role of the ombudsman and the importance that we should all attach to upholding the integrity of that position. That point was made by the hon. Member for Cardiff, North (Julie Morgan), but it was also made by the Chairman of the Committee on which she serves, the hon. Member for Cannock Chase (Dr. Wright).
Several hon. Members talked about the incentive to save and how important that is, particularly as over the years ahead we will move to having a higher proportion of people beyond retirement age in relation to those who are of working age, and how we as a country must ensure that people are given the greatest possible incentive to save and how that incentive is undermined if people do not feel that they have confidence in the mechanisms that enable them to save. That point was made by the hon. Member for Leeds, North-East (Mr. Hamilton), who plays a prominent role in the all-party group, and by others. Some, like my hon. Friend the Member for Edinburgh, West (John Barrett), talked about the wider economic context, including incentives to save. Finally, the hon. Member for Angus (Mr. Weir) spoke-accurately, in my view-about how many savers saw Equitable Life as a gold standard institution. These were not people who put their savings in a place where they expected to take a high risk to achieve a high return; they were seeking to be responsible in quite a cautious way, so it is particularly unfortunate that they should find themselves in these circumstances.
However, the one thing that I would say, respectfully, to the hon. Member for Angus is that I am not at all sure, were we to have independence in Scotland, that his constituents would be compensated any more speedily, if at all.
Sir John Butterfill: Does the hon. Gentleman agree that many of those who took out Equitable Life policies did so in order that they would not be a burden on their families or the state in old age? That has been frustrated.
Mr. Browne: I strongly agree, and that is why it is especially important that we consider seriously all the contributions made during the debate.
In summary, I want to speak about three matters-the motion before us, the Government's pattern of behaviour over recent months and years, and how we might go forward. First, hon. Members who have not had the opportunity to study the motion in detail will see that it is almost word for word the same as early-day motion 1423. It has been updated to reflect developments with the addition of a small clause that does not materially affect the direction of the motion or, I hope, anybody's willingness to support it.
Early-day motion 1423 was signed by 336 Members of this House. Given that Ministers on the whole do not sign such motions, that shows that a very high proportion of hon. Members felt able to sign this one. In addition, the total of signatories includes 113 Labour Members, many of whom have taken part in the debate. Therefore, I do not take the view expressed by some Labour MPs that this is a partisan, party political topic. The debate is about the integrity of the ombudsman and the material well-being of many hundreds of our constituents. I see it as an opportunity for MPs of all parties to follow through their convictions and vote for the motion.
Geraldine Smith (Morecambe and Lunesdale) (Lab): The costs are very important, as is the time scale involved. How much does the hon. Gentleman expect the proposal to cost, and according to what time scale does he see the money being spent?
Mr. Browne:
Those questions have been deliberated at length over the past three and a half hours, and I shall come to them in the third part of my speech, but I am currently dealing with the motion. My point is that
it is a straightforward motion, tabled by the Liberal Democrats on one of our Supply days. I am delighted that every Conservative Treasury spokesman, and the party's Chief Whip, have put their names to it, but it is not a party-political motion. I see no reason why Labour MPs who are members of the cross-party committee, or who have signed the early-day motion, should have any difficulty in supporting it.
My second point has to do with the conduct of the Government. For many of us, and for many of the people watching our proceedings either in person or on television, the way in which the Government have chosen to conduct themselves will have been a source of deep frustration.
Mr. Graham Stuart (Beverley and Holderness) (Con): We were asked a moment ago what the cost of the proposal would be, but does the hon. Gentleman agree that the cost to the country is the loss of dignity in old age for policyholders, and increased contempt for this place because of how the Government have behaved?
Mr. Browne: The hon. Gentleman is right that there is a cost beyond the financial cost, but in his opening remarks the Chief Secretary to the Treasury-
Mr. Browne: I do not think that the hon. Lady was present to hear the Chief Secretary's opening remarks. She may have been, but she certainly missed large portions of the debate. He coined an unintentionally laughable word that reminded me slightly of when Hillary Clinton said that she "misspoke" when she was caught out saying something fundamentally untrue, or of when Janet Jackson suffered a "wardrobe malfunction". It was an expression of that type. He said that he had under-celebrated the role of the ombudsman. That is one way of putting it.
Let me tell the House what the ombudsman said about the Chief Secretary. She stated on 20 August, only two months ago, in a letter to the Chief Secretary:
"I noted what you said in the House on 21 July and did not recognise it as a true representation of my position. That said this is not the first time that the Government has misrepresented my position in order to defend its own and I suspect it will not be the last."
I can see why the Chief Secretary is likely to under-celebrate her role, but it is part of a wider pattern.
In her initial report, the ombudsman said that the Department of Trade and Industry oversight had been
"passive, reactive and complacent",
and that Financial Services Authority regulation had been
"largely ineffective and often inappropriate".
The Select Committee on Public Administration, which has been referred to on a number of occasions, described the Government's excuses as
"shabby, constitutionally dubious and procedurally improper".
There has been a track record going back months-indeed, years-of the Government dragging their feet and behaving dishonourably.
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