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"the majority of Equitable Life's policyholders had modest sized pensions and were not 'fat cats' who 'risked their money to get above average returns'. In particular, the average investment of the half million individual policyholders amounted to £45,000 each, which in today's money would buy a pension paying around £75 per week".
That is why it is so important that EMAG continues to support, lobby, push and, ultimately, try to obtain justice.
Martin Horwood: The hon. Gentleman has praises EMAG. Does he share its concern about the way in which the Chadwick process is evolving? That is underlined by its submissive language, which refers to
"what factors the Government may wish to take into account when considering which policyholders have experienced disproportionate impact".
That does not sound as directive as we would wish. We may end up with a process that will not lead to the quick resolution that we all seek.
Mr. Hamilton: I hope that the hon. Gentleman is wrong, and I hope that EMAG is wrong. I was about to say that I did not approve of EMAG's recent action in pulling away from the Chadwick process. I think that many Members share my belief that, however much we regret the fact that the Treasury introduced the process, the fact is that we have the process now and we must see it through to its conclusion. I believe that that is the only way in which we can secure the compensation that policyholders need and deserve as quickly as is humanly possible from this moment onwards, whatever has happened in the past.
Anne Main: I asked the Chief Secretary why there was not a parallel process of cleaning up the data, but I did not receive an answer. The hon. Gentleman praises the Chief Secretary for trying to put things right. Cleaning up the data would be a simple way of trying to put things right. A Labour Member-the hon. Member for Northampton, North (Ms Keeble)-asked whether the Treasury was liaising with the Department for Work and Pensions, but again there was no answer. There are more things that could be done. Let us be critical about this, in a cross-party way.
Mr. Hamilton: I entirely agree. I am not suggesting for a moment that everything that the Chief Secretary has done is perfect. The cleaning up of data was raised at the all-party group meeting, but we have not received a definitive answer, and we need one. I hope that we will be given that answer in the winding-up speech, because it is important that the data is cleaned up so that the people who need and deserve compensation receive it when we finally have a scheme. The issue today, however, is what resolution we secure in the House, what debate we engage in and what decisions we make will best achieve our common aim, which is to ensure that compensation is paid as rapidly as is humanly possible from this day forward.
We have not yet had an answer on when the scheme will begin and end. The Chief Secretary made it clear that he could not answer that question until he had seen Sir John's final report, which is a great shame.
Stephen Hammond (Wimbledon) (Con): The hon. Gentleman says that we do not know when the Chief Secretary will be able to give an answer, but the Government's amendment contains a commitment that they will
"respond with details of a payment scheme within two weeks of receiving this advice",
and we are due to receive that advice at the end of May, are we not, whatever the failings of the process?
Mr. Hamilton: I apologise if the hon. Gentleman has misunderstood the point I was trying to make. I am very pleased that the Government are committed to giving a response within two weeks, but my point is that we do not yet know when the payments will begin-indeed, we will not know that until they begin-or when they will be completed.
I recently met Chris Wiscarson, the new chief executive of Equitable Life, and I know that other Members have also met him. I thank him for his engagement with Parliament and hon. Members in order to ensure that, as leader of Equitable Life, he is focused on the policyholders and on trying to reduce his overheads and what he calls the bottom line-the expenses involved in running the organisation-to the absolute minimum, so that the maximum amount is available for policyholders. I commend him for that.
Turning to the Chadwick process, Sir John will give his final advice to the Government in May. He is looking into the details of 2 million policies, so he has to get this right. As we are dealing with about 2 million policies, the data must be clean. The Government said they will respond to Chadwick within two weeks of receiving his report, but a literal interpretation of the ombudsman's findings would mean excluding at the very least trapped annuitants, which-
Mr. Deputy Speaker: Order. I must interrupt the hon. Gentleman's speech now. He was, perhaps, a little too generous in allowing interventions.
5.27 pm
Mr. Edward Garnier (Harborough) (Con): I shall endeavour not to use up my nine minutes, but let us see how we go.
First, may I declare an interest? I am a current Equitable Life policyholder, and also a former one, in that I held other policies that I managed to extract from that bottomless pit and move to other pension providers. Like so many other Members, I also represent a large number of constituents who have been grievously affected by this saga. Although I speak with a degree of disappointment on my own behalf, I speak with a great deal of anger on behalf of my constituents, many of whom have very little apart from their defunct Equitable Life pensions and other small pension entitlements from either the state or company pension schemes. They are on their uppers. They are really struggling to make ends meet, and they are having to do so at a time when interest rates are historically low and therefore such other savings that they have are producing a very low return. That is the backdrop against which my constituents are having to watch the Government continually delay this process.
This entire episode is not only bad in respect of the facts of what has happened, but it stands as a metaphor for the way in which this Government behave. We have a Government who appear not only to be prepared wholly to ignore or sideline the decisions of the ombudsman, an office set up by Parliament to protect the interests of the citizens of this country. They are also prepared to suggest in their amendment that the Government recognise-although they pretend that it is the House that recognises this-
"the vital role the Ombudsman plays in public life"
"the duty of Parliament to support the office of the Ombudsman".
If that were actually true-if the Government actually believed what they had written in the motion-we would not be where we are now, as this matter would have been resolved, if not in exactly the same way that the ombudsman suggested, at least through something a little more similar to it and many years ago.
Not only are we left waiting for Sir John Chadwick's final review to report-I appreciate that a number of interim reports have been published-but, as I said to the Chief Secretary to the Treasury, the Government have cynically adjusted the timetable so that the review will be published or will apparently at least come to be considered by the Government after the likely date of the general election. Nobody is in any doubt as to the likely date of the election, nor have they been for many months. I have no doubt that the Treasury, at both official and political level, has so adjusted Sir John's timetable and so constrained his remit to enable the Government to shuffle off into opposition after 6 May with a view to washing their hands completely of this terrible saga.
Meanwhile, my constituents and those of many other hon. Members will have to deal with the human problem: the loss of their pension rights and their investments, which they so carefully placed into Equitable Life. These people are not spendthrifts; they have deliberately attempted to save for their old age. These are the people this Government have let down. One again places this issue in the context of the first decision made by the then Chancellor of the Exchequer when he arrived in No. 11 Downing street in 1997 to adjust-I put that neutrally-the whole matter of advance corporation tax. That, together with what has happened in this case, illustrates this Government's view of the private pensions sector.
When one looks at our motion, which I wholly support, one sees a collection of facts, at the end of which one sees a conclusion based on those true facts. The conclusion is that an "injustice" has been done and it needs "remedying". The Government seem to be reluctant to do anything practical about it. The anger, frustration and the slow process that the public suffer as a consequence of the Government's cynical attempt to delay things until after the election is not just something that comes out as a rhetorical flourish during the debate-it is real. I suggest that those on the Treasury Bench should acquaint themselves with what the public actually feel. Given the all-party concern about this issue, I suspect that plenty of these poor Labour Members of Parliament who represent the governing party but who have the honour to represent people whose Equitable Life investments have been completely scythed are having to describe to their constituents what the Government are doing in words in which they have little faith.
The Chief Secretary, in his usual way, spoke quietly and with apparent understanding of the plight of policyholders, but if one analyses what he said during the 20 or 30 minutes of his speech, one finds that he said nothing. A proper deconstruction of his speech will lead one to the conclusion that he was almost playing a game with the public and policyholders; it was as if somebody was reaching for a prize only to see it pulled a little further away each time they got within six inches or so of it. Likewise, we see the outcome of the Chadwick review being pushed and pushed further away from not only resolution, but from this Government's responsibility. I suggest to the House that the Government's conduct is not just cynical, but irresponsible, and deliberately so.
There is no question but that much of what the Government say in their amendment is deeply questionable. I have already referred to the cynical way in which they have attempted to support the ombudsman, despite the fact that their actions demonstrate an entirely different motive. However, the amendment goes on to state that the House
"notes that Sir John expects to produce his final advice in May"
"welcomes the Government's commitment to respond with details of a payment scheme within two weeks of receiving this advice".
My suspicion-I have some knowledge of the workings of government-is that Sir John's recommendations will be known to the Government in advance of the general election. They will be preparing their response-probably now, in advance of Sir John's recommendations being produced-but they will stick it in a cupboard and wait to see what the result of the election will be. If they win, they will further delay the Government response and produce a timetable for implementation that will take us still further away from May. If they lose, they will be able to say, "Well, we are no longer the Government. It is up to the Conservative Government." It will be up to my hon. Friend the Member for Tatton (Mr. Osborne) to sort this out, and the Government will swing quietly off into the distance. The Government kindly state that they note that
"to abandon the Chadwick process so close to completion would add delay and hardship for policyholders".
We know that that is impractical. There is no way an incoming Conservative Government could in fairness or in practical terms do away with the Chadwick process.
This whole saga demonstrates to me a lack of good faith, a lack of planning and a lack of appreciation of the plight of innocent policyholders. It is utterly shaming.
5.36 pm
Barry Gardiner (Brent, North) (Lab): This Government have done many, many things of which I am immensely proud. They have done nothing of which I am more ashamed than their handling of, and prevarication over, Equitable Life. The problem with Equitable Life was always to balance speed with fairness and to ensure that the scope of the compensation was correct. The hon. Member for Fareham (Mr. Hoban), who spoke for the Opposition, was correct to criticise the Government's failure adequately to grasp the urgency with which the Government ought to have responded to the ombudsman's report in July 2008.
The Government amendment states that the
"establishment of an ex gratia payment scheme, and the terms of reference given to Sir John Chadwick were a rational response to the Ombudsman's report".
How weak. They were a "rational" response. They were not appropriate, or sympathetic, or moral, but they were rational-if the end that one wished to achieve was to minimise the cost and delay the payments. Rationality is always important and necessary, but it is scarcely ever sufficient in matters of public policy.
In 2002, I believe, I spoke in the first debate on Equitable Life and urged swift action then. In 2008, when the ombudsman presented her report, the Government were wrong to consider that it was reasonable to delay a further six months before responding and then to challenge her findings in the court. The Government acted as though they believed that the clock started when the ombudsman produced her report in July 2008. In fact, for policyholders the clock had started in 2001. It has now been running for nine years and during that time many policyholders-some 40,000, according to Treasury advice-have now died. The Government have suggested in their amendment that
"there is a strong case for policyholders who have passed away to be included".
It is of course right that the estates of the deceased should benefit, but that is of little comfort to those who each month draw closer to the end of their lives without the financial means for which they had prudently planned and saved.
The hon. Member for Fareham has indicated that he accepts that we are, in his words, "where we are". He also made it clear that an incoming Conservative Government would accept and continue with the Sir John Chadwick process. Insofar as that is the case, I find the Opposition motion as it stands to be somewhat confused, because it refers to implementing "the Ombudsman's recommendations".
Earlier, I asked the hon. Member for Fareham to clarify the matter by saying whether his party intended to do anything in addition to Chadwick, perhaps by implementing elements of the ombudsman's recommendations on top of Chadwick. I also asked what the timetable might be. The answer that I received was that it would be Chadwick, and that implementation would occur early in the life of the next Government. That strikes me as the common position of both the Government and the official Opposition. That being the case, I would simply press for additional steps to be taken, and in particular for interim payments to be made to surviving policyholders as soon as possible after we have all seen the Chadwick report.
5.41 pm
Daniel Kawczynski (Shrewsbury and Atcham) (Con):
Many of my constituents in Shrewsbury who are Equitable Life policyholders have come to see me in my surgery. Their sheer frustration and misery as a result of what has happened led me, together with the hon. Members for Leeds, North-East (Mr. Hamilton) and for Richmond Park (Susan Kramer), to set up the all-party group for justice for Equitable Life policyholders. I am very grateful that various people have referred to the work that we have tried to do on a cross-party basis to bring this issue to the forefront of parliamentary debate. I am particularly
pleased that we are having this debate today, and that the Conservative party should have used one of its Opposition days to enable us to discuss these issues still further.
To begin with, I was extremely concerned that Sir John Chadwick would not come to see us and interact with us. I was appalled that a person in his position could disregard Parliament and parliamentarians and behave in such a way, but we finally managed to get him and the Chief Secretary to the Treasury to speak to the all-party group on 24 February.
I have never seen a room more crowded than on that day. It was standing room only. It was so encouraging to see how many Members of Parliament, from all political parties, tried to attend the meeting on behalf of their constituents. They wanted to put questions directly to the Minister and Sir John Chadwick, and I am very pleased that we have been able to distribute to every Member of Parliament copies of the questions posed and of the replies that we received from the Minister.
What concerned me profoundly is that, when the Minister left the meeting, we then interviewed the current chief executive of Equitable Life, Mr. Chris Wiscarson. He said, in front of all of us, that he had written repeatedly to the Minister asking to interact with him and his Department. He wanted various forms of communication to take place between Equitable Life and the Minister's Department, but he told all of the MPs assembled that not only had he received no reply, he had received no acknowledgement whatsoever.
The Minister stood at that Dispatch Box this afternoon and said repeatedly how important the process is, and how passionately he believes in trying to resolve it in a speedy and timely manner. However, if those are his genuine views, he needs to sit down with Mr. Wiscarson very soon: he must afford the current chief executive of Equitable Life the opportunity of a meeting to put forward his concerns and suggestions.
Anne Milton (Guildford) (Con): Does my hon. Friend agree that that only adds to the anger, frustration and increasing cynicism of my constituents and many others around the country?
Daniel Kawczynski: Yes, absolutely. Far more transparency is needed throughout the process.
We saw what happened when the Government decided to bail out the individuals, councils and other institutions who had invested in an Icelandic bank-Icesave. Huge amounts of effort went into supporting those individuals and organisations. I simply do not understand why that level of urgency and commitment has not been forthcoming on this issue.
I pay tribute to Mr. Paul Braithwaite of EMAG. He is a gentleman with whom I have interacted repeatedly on this issue and I pay tribute to his hard work and dedication in pursuing this matter. He has sent me a few points which I should like to raise in the debate. EMAG issued a press release, explaining why
"we are walking away in disgust, after active engagement for months acting in good faith, from 'The Chadwick process'."
"walking away in disgust".
The word "disgust" is critical.
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