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Mr. Byrne: As I promised, I asked Sir John Chadwick's advice on interim payments following our October debate. The difficulty is that when a scheme is produced there will be a cap on it-to cap liabilities to the public purse more generally. The difficulty with making interim payments is that it is impossible to estimate, until the final scheme is designed, whether the person has too much, too little or about the right amount. I would not want to embark on an exercise where people were being overpaid, because
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it would be impossible, and quite wrong, to ask them for money back; that would be seen as reprehensible by all Members of this House. Sir John Chadwick therefore examines in his report a proposal for potentially expediting payments to particular groups once the scheme design is finalised, and suggests two such groups, as the hon. Lady will have seen.

Anne Main: I was pleased that when the Minister came to see the all-party Equitable Life Policy Holders group, he said that the election date would not delay the proceedings that are going on in the background. However, the all-party group also heard from some of the victims, who asked why no work was being done in parallel to clean up the data, as that would speed up delivery once the decision was made on the criteria for who was going to be eligible. Could he give us a little more information about why that work is not being done? That work would ensure that, having stopped one set of proceedings, we do not then come up with another lengthy procedure that needs to be gone through before anyone gets a penny.

Mr. Byrne: That is an excellent point, and I will try to ensure that we respond to it over the course of the debate. Some preparatory work is ongoing-for example, discussions with the DWP about possible delivery options. I have also asked the Treasury to ensure that any clearing of the ground that is required for a procurement process is undertaken.

Ms Sally Keeble (Northampton, North) (Lab): Has the DWP talked to the Financial Services Compensation Scheme, which has enormous experience of data cleansing and rapid processing of large volumes of claims, as with the Icelandic banks?

Mr. Byrne: Let me seek to provide an answer over the course of the debate.

I want to turn to two important points that hon. Members raised earlier. The first, which also came up in the all-party group, is whether payments should be made to the estates of policyholders who have passed away. As promised, we have reflected on this. Based on the evidence that I have seen to date, I feel strongly that they should be included in any scheme. I cannot see any rationale for treating their estates differently from those of any other policyholders. I think that is a view that the House will share. We cannot pronounce on this categorically until we see the final design of the scheme, but I thought it important for the House to know the direction of travel.

Secondly, several hon. Members have asked about means-testing. My assessment so far is that means-testing would be neither administratively feasible nor desirable. It would be an unwelcome complication that cannot, at this time, be seen in a positive light. Again, a final conclusion has to await Sir John's final report, but I do not think that means-testing should be our direction of travel.

Robert Neill: I am grateful to the Minister for having gone as far as he has. However, given that the Public Accounts Committee said that compensation was not a matter of charity but a matter of justice to rectify a
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wrong, would it not be right for him to rule out means-testing at this stage instead of giving qualifications about awaiting Sir John's report?

Mr. Byrne: I am being a realist about it. Having contemplated what kind of administrative procedure would have to be put in place to go through means-testing, I cannot see how in the world we would do it.

The third question, to return to the point raised by the hon. Member for Richmond Park (Susan Kramer), was about urgent payments. In the final scheme design, we should prioritise payments to those who have been particularly severely impacted by what has happened. In his latest report, Sir John Chadwick provisionally identified two groups: trapped annuitants and late joiners.

That is all that I wanted to say by way of response to the hon. Member for Fareham.

Sir Paul Beresford rose-

Mr. Byrne: Before I conclude, I will give way one last time.

Sir Paul Beresford: The Minister has nicely said, as far as I can tell, that he is not interested in means-testing. However, does he envisage a payment that is directly related to that which the policyholders anticipated but did not get, even if it is a proportion of the amount, or does he have some other artificial way of changing it?

Mr. Byrne: The answer is yes-Sir John Chadwick has tried to compare the relative losses of different classes of policyholders.

Let me conclude by saying that all Members of this House will have constituents who have been affected by the injustice of Equitable Life, which now stretches back almost two decades. We are committed to acting urgently and fairly, even in the current fiscal climate. That approach is reflected in the Government's proposed amendment to the motion.

Rob Marris rose-

Mr. Byrne: Before I finish, I will give way one final time.

Rob Marris: Forgive me, because I may have missed it, but can my right hon. Friend say when he expects payments to start and when he expects them to be finished?

Mr. Byrne: As I said a moment ago, I cannot this afternoon set out when payments will start, or when they will finish, but I can commit to ensuring that the Government's response to the John Chadwick report, which will be published within two weeks of the report being handed in, will include a delivery timetable, which will answer that question.

We have drafted the proposed amendment in a way that reflects the debt that we owe to the ombudsman and accepts the obligations of the Government, but that none the less reaffirms our commitment to an approach that we think will remedy this injustice as rapidly as possible.

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Several hon. Members rose -

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Before I call the hon. Member for Twickenham (Dr. Cable), I had better advise the House that the 15-minute limit on Back-Bench speeches is no longer appropriate in the light of the numbers of hon. Members seeking to catch my eye, so I give notice that it will be reduced to nine minutes.

5.6 pm

Dr. Vincent Cable (Twickenham) (LD): I will try to make your task a little easier, Mr. Deputy Speaker. I had the privilege of introducing a debate on this subject on 21 October 2009, when I set out in considerable detail the Liberal Democrats' views on how the problem should be dealt with, and I do not need to rehearse those arguments and the history again. There is a fair degree of consensus, which was summed up by early-day motion 1423 in the last Session. The motion was signed by 351 Members, from all parties, which I believe is the largest support for any such motion. On my quick arithmetic, that means that 70 per cent. of Members who are not on the Government payroll supported it. A considerable amount of work has been done since by the all-party group to reinforce that.

I shall first discuss the practical issues raised by the exchanges between the hon. Member for Fareham (Mr. Hoban) and the Chief Secretary. Since October, as the Chadwick process has ground on-we have now had the third interim report-and in the past few days, there has been a breakdown in the relationship with the policyholders group, which has consistently defended the interests of policyholders throughout the process. Initially, it worked in a constructive and positive way with Sir John Chadwick despite having reservations about how the process was being conducted, but that relationship has now broken down. I do not believe that the Minister addressed that problem.

I have two suggestions for the Minister. First, nobody is suggesting that we now go back and throw the work of the Chadwick commission into the waste-paper basket and start all over again. To be fair, as the hon. Member for Fareham said, we are where we are and we have to operate from the current position. The legitimate concern of policyholders is the lack of independence in the process and the role of the auditors, which I believe are appointed and paid for by the Treasury. If there were greater confidence that that process was genuinely independent, much of the lost confidence could be restored. Will the Minister consider how independent auditors who have the confidence of the policyholders can be introduced to the process, perhaps alongside those already designated by the Treasury, to bring the policyholders group back on board in the process?

We can argue whether it would have been better to have gone down the tribunal route than the ombudsman report route, but the policyholders group vehemently denies that matters are as complicated as the Minister made out. We can go over the history, but-given where we are-the key need is to establish the independence and integrity of the process. Confidence has broken down, and we need to find a simple way in which that can be remedied.

The other issue that has arisen-and it is an immediate and practical one-is that of interim payments. All three of my colleagues who have intervened-my hon.
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Friends the Members for Cheltenham (Martin Horwood), for Richmond Park (Susan Kramer) and for Solihull (Lorely Burt)-made that point, and I heard the Minister's reply. I can understand the theoretical problem-that the interim payments might collectively be greater than a cap that might be imposed-but it is a rather academic objection. We are, after all, talking about a narrow category of people whom we all agree should be compensated-the trapped annuitants and the late entrants. Nobody is now disputing that. It also concerns a modest part of the compensation to which they will ultimately be entitled. So it is not clear why this relatively modest but rapid intervention of making interim payments should hit the financial ceiling, unless the Government envisage a ceiling that is ridiculously and unreasonably low. I hope that the Government will take a fresh look at the interim payment issue, because the objection advanced is not very credible.

If those two steps could be taken-a greater degree of independence in the auditing process, which is very complex and which no hon. Member is equipped to deal with technically, to restore the confidence of the policyholders, and the introduction of an interim payments scheme-much of the current suspicion about what is happening would be defused, and we would be back on track. That is the substantive point that I wish to make, but I shall briefly summarise the two overriding concerns that Members have expressed throughout the debate.

The first is the cumulative delay. We can argue about whether a particular step was reasonable or not, but it is the cumulative impact of a decade of delay that has caused so much anxiety and anger. The second is the integrity of the ombudsman process and our responsibility as a House for upholding the ombudsman's authority.

On the first issue, it is worth-without going into the long and sordid history-recalling the milestones in this decade-long process. We had the four years to Penrose, who indeed criticised the delays in establishing his report. Then there were the three years to the ombudsman's report and then the 18-month delay in the publication of the ombudsman's report through the Maxwellisation stage, followed by the Government's response, which was not satisfactory. Then came the ombudsman's response to the Government, then the various challenges, including judicial review and the Public Administration Committee's report. Then we had the six-month delay until the Chadwick process got under way, and the next series of steps that we are now encountering. Any one of those delays could be excused and explained, but the cumulative effect of the Treasury foot-dragging is great ill will and is the reason why Members on both sides of the House keep returning to this issue. It is also why the 1 million people affected by this issue are so frustrated.

The second overriding issue is the authority of the ombudsman. It is worth recalling that 351 of us said, when we signed the early-day motion, that this House

We can argue about whether the ombudsman's process was the best, but its principles were clear, and one of them was that compensation was right, and that it should take place according to the principle of remedies: we are not talking about arbitrary compensation with figures plucked from the sky, but about a carefully
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thought out procedure. The ombudsman also made the specific recommendation of an independent tribunal-like process. We know that the Government have rejected that, but the key point was independence, and that is what is lacking from the present proceedings. We then had talk about "rapid", "transparent" and "simple" solutions to compensation, but again, we have not had "rapid", we probably have not had "transparent", and we certainly have not had "simple". The question is: how do we get past that stage?

I will leave the Minister with the thought that introducing an independent element into the actuarial process at this stage may restore some of the confidence that has been lost. If the Government are now willing to look at interim payments through the Chadwick process, that would go some way-probably a limited way, but some way at least-to stemming the anger and frustration that a lot of policyholders feel.

5.15 pm

Mr. Fabian Hamilton (Leeds, North-East) (Lab): We are here again to debate Equitable Life because we all have constituents who continue to suffer, as hon. Members have said throughout the debate. However, I am a little dismayed and disturbed that the issue is becoming a party political football, although I suppose that that is inevitable with a general election fast approaching. I remind all right hon. and hon. Members present for the debate-instigated, I accept, by the Opposition-that we are here today for one reason: to ensure that those who have suffered as a result of the Equitable Life scandal are properly compensated and that they stop suffering. For the 15 policyholders a day who are dying- 15 policyholders who will never see justice-we know that their estates are compensated, as I believe the Chief Secretary indicated, and as the Government amendment certainly indicates.

It is a real shame that the issue has become so partisan. I thank the hon. Member for Fareham (Mr. Hoban) very much for his kind remarks, but he said that the Government were trying to block, frustrate and delay the process. That might have been the case in the early days, and we all regret that. I certainly made it clear in my Adjournment debate last June that I regretted it, and my hon. Friend the Member for Cannock Chase (Dr. Wright), the Chairman of the Public Administration Committee, has done so too. However, we now have a process that perhaps many of us would not have wanted, but which is none the less approaching its conclusion. I am glad that the hon. Gentleman made it clear that the Opposition would see that process through, should they win the general election.

We had an Opposition day debate on 21 October last year, to which the hon. Member for Twickenham (Dr. Cable) referred. My debate, which was an hour and a half long in Westminster Hall, was held on 24 June last year. The all-party group on justice for Equitable Life policyholders held a meeting on 24 February -less than a month ago-which Sir John Chadwick was able to attend, thanks to a little pressure from me and the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), co-chairman with me of the all-party group. Chadwick answered some questions-some Members got some answers-but I share the view expressed by the hon. Member for Twickenham that the lack of independence of which EMAG has been so critical was
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quite evident in Sir John's remarks on 24 February. It was a shame indeed-we have already made our view clear-that the room was so inconvenient that not all Members who wanted to ask questions were able to do so.

As hon. Members know, I have been very critical, but the aim of my criticism-I hope that this is the aim of everybody's criticism of the Government-is to improve the chances that those who have had justice denied as a result of what happened at Equitable Life will get that justice. That is what we are here to do, and we must not forget that.

Mr. Graham Stuart (Beverley and Holderness) (Con): I am grateful to the hon. Gentleman for giving way, but after 10 years of obfuscation and delay, which have caused mass injustice to so many people, is it not right that, as we approach a general election, people should be able to look at Labour's record on this issue and come to the same conclusion that we do, which is that if people want justice, they need to vote for a change? We have had 10 years of a failure of justice, and the hon. Gentleman has been honourable in pointing that out, but it is also worth pointing out that it is his party-the Government-who have carried out that injustice.

Mr. Hamilton: We now have a chance to put things right and do what we have not done so far. I think that that is finally happening on this side of the House, and that is why I want to see the Chadwick process completed. The question about timing that my hon. Friend the Member for Wolverhampton, South-West (Rob Marris)-who has now left the Chamber-put to the Chief Secretary is critical.

I thank the hon. Member for Fareham for his kind remarks about the work that the hon. Member for Shrewsbury and Atcham and I have been doing in the all-party group. I also commend the Chief Secretary on his openness. I think all Members will agree that he tried hard when he attended a meeting of the group. He listened to what we had to say, but it was clear that he was also attempting to make up for the years in which nothing had been done-although we should bear in mind that it took the ombudsman four years to complete her report.

I strongly support what the amendment says about compensation. It states that

That point also arose when the Chief Secretary addressed the all-party group. However, one word is missing from the amendment. It ends with the words

The missing word is "policyholders". We seem to be forgetting that individuals are involved, and we should not do so.

I thank EMAG because although-as the hon. Member for Twickenham reminded us-it has pulled away from the process following Sir John Chadwick's third interim report, it has constantly reminded every single Member that this is an issue for his or her constituents and is
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crucial to many of them. As I said during my Adjournment debate, EMAG told the Public Administration Committee that

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