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Even last year the Prime Minister promised that the next stage of the process would be completed by the end of 2008. That is the report to which we keep referring, which came in the middle of January 2009. One should be extremely cautious about accepting the timetables
put forward by Ministers. The fact that the Chief Secretary stood before the House today and implied that policyholders should express gratitude for the swiftness of the Government's response compared with the other potential solutions on offer stretches credibility to the very limit.
Bill Wiggin (Leominster) (Con): I have signed the hon. Gentleman's early-day motion and I shall support his motion. My constituents are grateful for the chance to get that on the record. Will the hon. Gentleman say something in his closing remarks about the role of Sir John Chadwick? I am afraid I disagreed with the comments of my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski). I think Sir John is a fantastic gentleman with a first-class mind.
Mr. Browne: I would love to be able to comment on Sir John Chadwick in greater detail, but I have not had the opportunity to meet him. I suppose that was the point being made by the hon. Member for Shrewsbury and Atcham (Daniel Kawezynski). Sir John should meet Members of Parliament. We were elected to represent our constituents and that would aid the process. I have no reason to doubt that he is an honourable person.
In the last few minutes available to me, let me deal with the way forward. The Minister said that we should be looking at a timetable based on spring 2010. Some people will be worried that that is an elastic date. He was notably evasive when it came to offering a specific date when people could expect to see some payments made, not just further progress made. Even if that were spring 2010, hon. Members should remember that at current rates another 3,000 or so Equitable Life policyholders will have died between now and then.
A policy process that does not recognise the acute needs of the individuals concerned will cause a huge amount of distress. There was no talk about interim payments. There was considerable concern about the expression "disproportionate loss" used by the Government. We need to make it clear that this is not some form of means-tested benefit, but recognition of the actual losses experienced by real policyholders.
Everybody accepts that there was fault on the part of the people who ran Equitable Life. Of course market forces have an impact on the value of policies, but the ombudsman's report was concerned with the regulatory failure. The Government need to accept the ombudsman's report, give a straight response about a reasonable outcome and, most of all, reassure people across the country that speed is of the essence, that the Government understand their immediate human concerns, and that they will respond to those as a priority.
The Exchequer Secretary to the Treasury (Sarah McCarthy-Fry): I thank all hon. Members for their comments during this informative debate. The continuing scrutiny of our position is an important part of our parliamentary process, and I welcome it. This has also been the first occasion for a debate since the judgment in the judicial review that was brought about by the Equitable members action group.
First, I refer to a point that I think the hon. Member for North Cornwall (Dan Rogerson) made about the Government's failure to apologise. I do not know whether he noticed, but one of the first things that the Chief
Secretary to the Treasury did was to reiterate the Government's apology. Certainly, when I took part in the Westminster Hall debate on 24 June, it was the first thing that I did. I am more than happy to reiterate, once again, on behalf of public bodies and successive Governments who were responsible for the regulation of Equitable Life between 1990 and 2001, the apology for the maladministration that they accept took place. That will be on the record once again.
Mr. Lindsay Hoyle (Chorley) (Lab): Does the Exchequer Secretary not feel that we are in danger of rehearsing the Gurkha escapade, whereby the Government give a little bit more, then a little bit more? Why can we not be up front and say, "We are going to pay those people who have missed out on the Equitable Life situation and the compensation scheme at the earliest point possible"? Then we can all be happy.
Sarah McCarthy-Fry: I do not know whether my hon. Friend has been listening to the debate, but one point on which the whole House agrees is that it is very important that we obtain a speedy resolution. We all have constituents who are affected, and I reiterate that we remain committed to achieving a speedy resolution.
In the time available to me, I hope to cover as many as I can of the points raised by the hon. Member for Fareham (Mr. Hoban), who spoke for the Opposition; my hon. Friend the Member for Cannock Chase (Dr. Wright); the hon. Member for Richmond Park (Susan Kramer); my hon. Friend the Member for Leeds, North-East (Mr. Hamilton); the hon. Members for Edinburgh, West (John Barrett) and for North Cornwall; my hon. Friend the Member for Foyle (Mark Durkan); the hon. Members for Angus (Mr. Weir), for Solihull (Lorely Burt) and for Shrewsbury and Atcham (Daniel Kawczynski); my hon. Friend the Member for Cardiff, North (Julie Morgan); and the hon. Member for Taunton (Mr. Browne).
I had better clarify matters up front, because there were some misconceptions about the scheme being up and running by spring 2010. The Chief Secretary said that there would be a scheme design by spring 2010, and we will move with all speed to set it up thereafter.
On our relationship with the ombudsman, I reiterate that we still rebut any suggestion that there was anything improper, dubious or shabby about the manner of our engagement with the ombudsman. The Government have a great deal of respect for the ombudsman, but we also have a duty to consider the wider interests of the taxpayer.
Geraldine Smith: It is important that the Minister takes note of the ombudsman. However, it is equally important that we introduce a scheme as quickly as possible to help as many people as possible. No one has mentioned the financial cost, but that must be a consideration.
Sarah McCarthy-Fry: The ombudsman herself acknowledged that it was legitimate for us to take up the wider interests of the taxpayer and the issue of the public purse.
Constitutional matters were raised. The constitutional balance that the legislation reached, on the one hand, permits the parliamentary ombudsman wide jurisdiction and powers of determination, as well as the ability to make far-reaching recommendations, but, on the
other, permits a Government to reject findings and recommendations in certain circumstances. We did not depart lightly from the ombudsman's findings. After careful consideration of her report, we accepted some, but, where we believed that we had cogent reasons, we departed from others.
The recent High Court ruling upheld a number of those departures, and others have gone unchallenged. The Court found that the Government did not have cogent reasons for some departures, and we have accepted those findings and amended Sir John Chadwick's terms of reference to include them. Sir John is confident that that additional scope will not impact on the time scale for resolving his work.
At no time have we sought to delay matters. The ombudsman's report was the product of four years' work, and it raised a number of complex and difficult issues. None of the Government's actions has been motivated by anything other than the desire to achieve a fair resolution for policyholders and taxpayers alike. We continue to believe that this was, and is, the right approach.
Some Members, including the hon. Member for Bromley and Chislehurst (Robert Neill), suggested that the Court struck down our ex gratia scheme. That is not the case. It endorsed the Government's right to depart from the ombudsman's finding 3 and strongly rejected the challenge to the Government's decision to depart from her recommendation. That is not indicative of any lack of respect for the office of ombudsman or any disregard for the plight of policyholders affected by the events at Equitable Life.
Stephen Pound (Ealing, North) (Lab): May I assure my hon. Friend that many of us are desperate to vote for the Government's amendment and would happily do so if she could give us one piece of information: when will the payments be made?
Sarah McCarthy-Fry: The design of the scheme will be available by spring 2010, and we will move with all speed to get the payments made. The motion proposes the implementation of the ombudsman's recommendation for a scheme setting up a tribunal, which would mean that individual assessments took longer, and it would therefore take longer for the money to get through.
David Davis (Haltemprice and Howden) (Con) rose-
Sarah McCarthy-Fry: I cannot give way; I have only four minutes left.
I want to correct another assertion. The hon. Members for Solihull and for Edinburgh, West said that our original proposed payment scheme left 90 per cent. of policyholders without help. I do not recognise that figure, and I have seen no data to back it up. We have not analysed the policyholder data so we do not know exactly how many people are included. However, following our decision to include the findings previously not accepted by the Government, the period of injustice accepted goes back to the period covered by the ombudsman's report. Having considered the judgment of the Court, we think it right to accept its decision in relation to those findings. The key impact is that the terms of injustice accepted by the Government now extend from mid-1991 rather than mid-1995. One effect of that is that a large proportion of trapped annuitants
now fall within the scope of the period of injustice accepted; many hon. Members have voiced concerns about that group. About half those people fell within the scope of the injustice findings originally accepted by the Government, and the Court has now determined that the Government's interpretation of injustice was unduly narrow with respect to certain findings. We have accepted the decision, with the effect that most trapped annuitants now fall within that scope. Sir John Chadwick commented that that would not have happened even if all the ombudsman's injustice findings had been accepted.
Members heard my right hon. Friend the Chief Secretary explain the Government's approach to resolving the Equitable Life issue, focusing on the scope of our ex gratia payment scheme, the speed with which we can act and the fairness of our approach. We are clear that speed is of the essence in bringing this matter to a close.
Two points were raised on interim payments. We have asked Sir John to consider interim payments as part of the scheme. On payments to estates, that issue will be taken into account when deciding on the final terms of the payment scheme.
Sir John Chadwick is making good progress, and it is clear that the continuing priority is for Sir John and the Government to get on with the work required to deliver this ex gratia payment scheme. He has already published a further interim report on his progress and has invited representations on it by 27 October. He has also committed to providing a further update before the end of the year. I note that members of the all-party group on Equitable Life policyholders are concerned that he has not yet managed to find time in his schedule to visit them. I think that his priority at the moment is to get on with designing the scheme. However, I will pass on the comments made by the hon. Member for Shrewsbury and Atcham, who will know that I visited the all-party group and spoke to its members. Not many were there, but what they lacked in quantity they made up for with the quality of their questioning.
As my right hon. Friend the Chief Secretary said, Sir John faces a complicated task. We expect him to finalise the design of the scheme by the spring, and we will move quickly to consider his advice and announce a payments scheme that is practical to deliver and fair to policyholders and to the taxpayer. That is what we all want. I have said before that I cannot see how it would bring anything but further delay to accept the ombudsman's recommendations for a tribunal and a case-by-case individual examination. The amendment in the name of the Prime Minister urges an ex gratia scheme that is administratively quicker and simpler to deliver than that envisaged by the ombudsman, and that must be in the interests of policyholders. I therefore urge the House to reject the motion and support the amendment.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
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