1.51 pm

Gordon Henderson (Sittingbourne and Sheppey) (Con): Much of what I wanted to say has been mentioned already by other hon. Members, including my hon. Friend the Member for Harrow East (Bob Blackman), who has been a fierce and consistent champion for Equitable Life policyholders. I wish to make very clear my continued support for the Equitable Life policyholders in my constituency, and I believe the best way to do that would be to resurrect some comments I made in a speech in this House almost six years ago. That speech was one of my first after being elected in 2010, and it brings into sharp relief just how long some of us have been trying to get justice for those of our constituents affected by the collapse of Equitable Life, some of whom lost thousands of pounds.

I pointed out the following in that speech:

“Several hon. Members have suggested today that the Equitable Life scandal—and a scandal it was—is complicated, but for me it is actually quite simple. It is about fairness to a group of people who were badly let down by the regulatory failures of their Government. I went into the recent general election supporting a Conservative manifesto that made a promise to Equitable Life policyholders in my constituency. It said:

‘We must not let the mis-selling of financial products put people off saving. We will implement the Ombudsman’s

11 Feb 2016 : Column 1797

recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure.’”

Daniel Kawczynski (Shrewsbury and Atcham) (Con): My hon. Friend refers to that manifesto commitment in 2010. May I tell him that in the previous Parliament I helped to set up the all-party group and that we interviewed the then shadow Ministers at that juncture and they promised they would do everything to help the people affected? My constituent, Mr Meinertzhagen has lost half his pension as a result of this terrible tragedy.

Gordon Henderson: I am grateful to my hon. Friend for bringing that to my attention.

I continued that speech by saying:

“I wish to take this opportunity to assure policyholders in my constituency that I for one do not intend to go back on that election pledge.

Most people accept that Equitable Life policyholders were the subject of Government maladministration, and that is certainly the view of the ombudsman, Ann Abraham. There is some dispute on all sides, however, about the level of compensation that should be paid to policyholders. Sir John Chadwick’s report established that the relative loss suffered by Equitable Life amounted to between £4 billion and £4.8 billion, and the Financial Secretary, in his statement to the House this July, supported that figure. However, Sir John then used a series of convoluted calculations and speculative assumptions that allowed him to suggest a cap on the total amount of compensation that should be paid. He then went on to reduce that cap figure to just 10% of the relative loss figure that he himself originally calculated.

One of Sir John’s most telling assumptions was that the majority of policyholders would have invested in Equitable Life irrespective of maladministration. That is a very big assumption that cannot be proved or disproved…

Like many Members, I have been in touch with many of those policyholders, and all they want is fairness, because they are fair-minded people. However, they are not stupid people, and they recognise that in these times of austerity even they must shoulder some of the burden needed to bring down the country’s massive debt mountain.”—[Official Report, 14 September 2010; Vol. 515, c. 834-35.]

That was my position in 2010 and that position has not changed.

The Government went some way towards compensating those who lost money in the Equitable Life scandal, but that compensation met only part of the loss, so the Equitable Life investors in my constituency received partial justice. In truth, partial justice is no justice at all, and I urge the Government to give people justice now.

1.56 pm

Mike Weir (Angus) (SNP): It is a somewhat novel experience for me, as a Scottish National party Member, to stand up to support a motion that starts by saying

“this House congratulates the Government”.

However, I do so because this matter has been dragging on for a large number of years. The hon. Member for Sittingbourne and Sheppey (Gordon Henderson) said that he had been dealing with this for six years. I was first elected to this House in 2001, and I have been talking about it for coming up to 15 years now. This all started when the policyholders won their case before the House of Lords in 2000, so they have been fighting this for 16 years. Many Administrations refused to take it seriously, but I give the coalition Government credit

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for finally grasping the nettle and introducing a scheme. We may not agree with all the terms of the scheme, but that Government did do something about this. I see from a note I received from the Library that it appears that, when the scheme closed on 31 December, some 125,000 policyholders had not come forward to submit a claim. That is a large number of people who have not even got any money out of the existing scheme.

It took a report from the ombudsman to get the ball rolling on compensation, and I suppose the reason we are still debating it today was her conclusion:

“the diversion of scarce public resources is a relevant consideration which should be taken into account and weighed in the balance along with other relevant considerations”.

In introducing this debate, the hon. Member for Harrow East (Bob Blackman) said that the agreed sum outstanding was some £2.5 billion, but it is not entirely straightforward to see exactly what sum is required to put the policyholders back to where they would have been in terms of the relative loss. I have seen figures of up to £5 billion and as low as £500 million in this regard. First, we have to be clear exactly what the figure is. The Government, policyholders and the Equitable Members Action Group must agree what the figure is, because at the moment a large range of figures are being talked about.

The action group has consistently campaigned for full compensation. It is a disgrace that people have got less than a quarter of what they should have received, all because of the Treasury. That is where I disagree slightly with the hon. Member for Bromley and Chislehurst (Robert Neill), who said that the Government stand behind the regulator, as in this case the Treasury was the regulator for the relevant period during the 1990s. The Government have a direct responsibility for what went wrong in this case, which is why compensation is due. As has been pointed out, many policyholders have received compensation amounting to only about 22% of the losses.

Over the years, like many Members, constituents, many of them elderly, have come to me about this matter. Sadly, time has whittled down their numbers. One constituent, a Mrs Smith from Arbroath, told me the other week that she did everything she should have done. She made provision for what she expected to be a relatively good retirement not reliant on Government funds, but she was robbed of it because of a regulatory failure. Equitable Life was touted as a long-established, steady company. I used to be a practising solicitor and remember it well—not that I ever put any money into it, thankfully—but no one then realised the problem lurking below the surface.

The Government need to grasp the point about what happens from hereon in. We are now asking people to make greater provision for their own pensions, but that will work only if people are confident they will get the pension they are investing in. Equitable Life and other such scandals have greatly undermined that confidence. We need to show that when something goes wrong, through the fault of the Government, compensation will be available to put people in the position they would have been in. If we do not, the danger is that people will not be convinced to invest in the new pension landscape. In the future, the Government might face a much higher bill, because if we do not encourage people to invest in their own pensions, the state will inevitably have to step in. I urge the Minister to reconsider, given the confusion about the figure.

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Several hon. Members rose

Madam Deputy Speaker (Natascha Engel): Quite a few people have not turned up whose names were on the list, so I am revising the speech limit up to seven minutes.

2.1 pm

Caroline Nokes (Romsey and Southampton North) (Con): I can reassure Members that I probably will not take up seven minutes.

I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) not just on securing this important debate, but on his tireless work on Equitable Life since he entered this place in 2010. This sorry saga has been extremely long running. The hon. Member for Angus (Mike Weir) indicated that he had been speaking about Equitable Life in this place for 15 years. I know from EMAG, which has also worked very hard and diligently provided information to Members, that every constituency has roughly 2,000 people affected by Equitable Life. I wanted to highlight that figure.

When I was first elected in 2010, I could reliably expect about 20 or 30 people to contact me about Equitable Life every time it was raised in the House. Ahead of today’s debate, the number of constituents who either emailed or came to see me in my surgery dwindled to just half a dozen. I found that interesting but also incredibly sad. There are many reasons why our constituents are no longer contacting us. First and foremost, there is the sad truth that many have passed away, and some are too frail to make contact. They might not have easy access to email. They might be in care homes or reliant on family or carers. For them, it is not simply a case of popping off a quick email. In many ways, however, the saddest cases are those who have simply given up and no longer see the value in contacting us because they do not expect anything to change. Those who were once optimistic they would recover their losses now no longer come to our surgeries because they do not expect to get anything.

Those who remain in contact, however, are forceful in their arguments. One reason they feel so aggrieved is that, as we have heard repeatedly, they acted responsibly and did the right thing—or thought they had. They made provision for their retirement and took out policies they expected to provide them with a comfortable old age and the means to support themselves in their retirement. The Government need to encourage and incentivise people to do exactly that. Equitable Life was a very sorry saga indeed, and one that has left a legacy of suspicion and mistrust. Those who invested bitterly regret their decision, but it has longer tentacles than that. Even today people point to Equitable Life as a reason not to bother saving for their future. We must not allow that to happen.

I do not intend to repeat the comments of the chair of the APPG or other hon. Members. They have already set out the case in the motion. Instead, I want to highlight the difficult circumstances of some of my constituents—good decent people saving for their retirement. For them, a foreign holiday is now out of the question. They are reliant on public transport in an area that has little of it, because they cannot afford to run a car. They expected their retirement to be comfortable; they did not expect still to be working—in many cases, well into

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their 70s. Eight years after the ombudsman’s report, they remain of the view that the compensation they have received is not adequate.

I know what my hon. Friend the Minister will say: he will highlight the element of the ombudsman’s report emphasising that the Government had to recognise fairness to the taxpayer as well policyholders. I do not regard £1.5 billion as “diddly squat”, as one of my constituents described it. It is an enormous sum, and I welcome the Government’s efforts to identify and compensate policyholders. My one request is that, for the sake of the Equitable pensioners, he keep the situation under review. I know the scheme is closed, but should public finances permit it, he should consider reopening it.

2.6 pm

Crispin Blunt (Reigate) (Con): I declare an interest: I invested in Equitable Life while a special adviser. I cheerfully put 17.5% of my salary into an Equitable Life scheme over four years, when I worked for Malcolm Rifkind, and then watched, after I was elected to this place, as the whole Equitable debacle developed over the next decade or so. But at least I was sharing the pain of many of my constituents—well north of 3,000, according to an estimate given to me. The situation that my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) laid out is exactly my experience. To start with, there was a substantial lobby, but that dwindled, although there remain some persistent people—I have their letters—who lost hundreds of thousands of pounds, and they come from all classes of annuitants and policyholders.

Tom Tugendhat (Tonbridge and Malling) (Con): I welcome this debate. Does my hon. Friend agree that some people, like him and my father, did at least have time to make up the shortfall, but that others, including many of my constituents, simply did not have that time? Will he mention the fact that some people did not have the opportunity to recover their losses?

Crispin Blunt: My hon. Friend makes an extremely pertinent point.

On being returned in 2010, I found myself a member of the Government and obliged, at one level, to support their decision to limit the compensation to £1.5 billion. At the time, as the Prisons Minister, and the prisons budget being rather less than the total compensation required, I could understand, in the circumstances, why they decided to limit the overall compensation. I resolved, however, to speak in this debate and to re-examine the letters I sent out defending the Government’s position, and to re-evaluate my position to see whether it was reasonable.

I was much taken with the comments from the hon. Member for West Bromwich West (Mr Bailey), the former Chairman of the Business, Innovation and Skills Committee. This is about confidence in the entire savings system. I can remember Labour’s first Budget in 1997 and the consequences—unreported from the Dispatch Box—of IR35, which saw £5 billion cheerfully lifted from investors in pension funds through a tax on dividends. If a £5 billion change can be made in a Budget, announced not in the House of Commons but by press release, we need to be aware that we are dealing with vast numbers when it comes to pension policy. I tell the Economic

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Secretary, who is replying to the debate, that I believe we are on the verge of a substantial—and, for me, very welcome—change in pension policy. As part of that, we need to acknowledge the point made by the hon. Member for West Bromwich West that this issue is about confidence in the system as well as fundamental fairness to our constituents.

I congratulate my hon. Friend the Member for Harrow East (Bob Blackman), who introduced the debate so effectively, on securing it. I also congratulate my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) on setting up the all-party group in 2006-07 to reinforce the efforts that were already under way. He attempted to corral those efforts, make them more effective and secure from the Conservatives and the Liberal Democrats an undertaking that the issue would be addressed in their manifestos leading into the 2010 election. It is important to highlight that as a simple issue of fairness we need to revisit the sum of £1.5 billion and decide whether or not we have discharged our duty.

Daniel Kawczynski: I just wanted to remind my hon. Friend of my constituent Mr Meinertzhagen, whose living standards are suffering. He is now worried about the consequences for his wife when he departs from this world. It is a real struggle for him, and I hope my hon. Friend will join me in urging the Economic Secretary to find money and set it aside to help these people in desperate situations.

Crispin Blunt: My hon. Friend is entirely right. This is why these artificial divisions—between 31 August 1992 and 1 September 1992—are so unfair on the people involved. My constituent Derek Burton estimates his losses at around £175,000 as a consequence of his having invested before the cut-off date in 1992. That shows the impact on him of the changes that were subsequently made. These are enormous sums of money that have destroyed the planned retirements of thousands of my constituents—an average of 2,000 of every Member’s constituents have been affected.

Frankly, we have to grasp this problem and address it. I hope it can be done through the Budget and through further substantial and welcome changes to pension policy, on which the Chancellor absolutely deserves our support. By those means, he can address this lingering unfairness so that people can be given the confidence to invest in pensions again. The lesson I took from my little episode with Equitable Life was that I was simply not going to undertake any extra investment in pension schemes thereafter.

On the figures, I do not know whether we will get an answer from the Minister on whether £2.7 billion remains the sum required to put this right. In trying to do the mathematics, that figure does not seem to work out precisely to me, given that about £1 billion went to 890,472 policyholders who received only 22.4%. Provision should now be made for us to address this issue.

Maladministration was recognised and a clear recommendation was eventually made by Ann Abraham in her report, after various other people had looked at the problem. I have a lingering sympathy for some of the Equitable Life administrators at the time. The original legal challenge to their policies always struck me as

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ludicrous. It lost at every conceivable stage until the last one, when there was no possible course of appeal. Provision had not been made, as it should have been, for the possibility that they might lose the action. That was how the maladministration came to be identified in all the reports.

If we—the system—have overseen people not doing their job properly and not protected people who were wholly innocent, including those who were investors before 31 August 1992, it is right that we do our duty —out of fairness to them and to restore confidence in the whole pension system. If people find that they have invested resources other than their house in the biggest single asset they are going to invest in, and encountered circumstances utterly beyond their control, or utterly beyond any reasonable duty of care they would have taken to find out about what they were investing in; and given that Equitable Life was the most reputable pension provider around at that time, we need to put things right. We are now able to afford to compensate these people, and we should be able to do so by continuing significant pension reform to put this right properly and fully.

2.16 pm

Antoinette Sandbach (Eddisbury) (Con): I pay tribute to my predecessor, Stephen O’Brien, who fought tirelessly on behalf of Equitable Life policyholders in my constituency. I am grateful to my hon. Friend the Member for Harrow East (Bob Blackman) for securing this debate.

The Minister may be surprised to know that some of my constituents who have received support from the compensation scheme have recognised the role of the coalition Government and want me to pass on their thanks to that Government for setting up the compensation scheme that has allowed them to salvage a little from the shipwreck that Equitable Life has in effect been. They fully recognise the good intentions of the last coalition Government in attempting to do something, when nothing had been done previously. I want to put that on the record.

Victoria Atkins (Louth and Horncastle) (Con): Does my hon. Friend agree that the dignified yet forceful way in which EMAG has conducted itself—Mr David Wakerley in my constituency has been involved—shows the realistic view it has taken of what has been done so far, but this in no way addresses the needs of those left behind?

Antoinette Sandbach: I entirely agree with my hon. Friend. A constituent of mine who wrote to me has lost 75% of his life savings. He is living on a pittance by contrast with the position he would have been in if Equitable Life had not gone under. There is a broad recognition among Equitable Life policyholders of the stresses and strains that the last coalition Government faced, particularly with a severe economic crisis and a ballooning deficit.

Of course, we are now seeing the impact of the long-term economic plan. When the Government were in difficulties and faced stark choices, I believe that my constituents recognised that and were grateful that the Government were willing to act. Now they can see that circumstances are changing, they are asking the Minister to keep this matter under review, as my hon. Friend the

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Member for Romsey and Southampton North (Caroline Nokes) suggested. We are in a different economic situation from that when this fund was originally set up.

Mr Laurence Robertson (Tewkesbury) (Con): My hon. Friend is making a powerful point, as indeed have others. I do not wish to be pedantic, but when we talk about “keeping the matter under review”, we must remember that pension holders are dying, which makes the matter very urgent. My hon. Friend is right to say that the economy has improved to the extent that the Government can afford to pay full compensation, but beyond that I think there is a moral duty. There was regulatory failure, so whether or not they can realistically afford it today or tomorrow, do the Government not have a duty to pay this money?

Antoinette Sandbach: I am grateful to my hon. Friend for his intervention, because his point about regulatory failure is absolutely key. Had the regulator been doing its job properly and effectively, we would not be in this situation. That is what lies behind the requests for fairness, justice and equity for the policyholders, who were entitled to believe that proper, appropriate and fit regulation was in place and would keep their policies safe. That is the inherent injustice about which those policyholders are rightly aggrieved. As my hon. Friend the Member for Harrow East has said, it is unarguable that the unspent £139 million must be distributed among the pre-1992 policyholders.

Chris Leslie (Nottingham East) (Lab/Co-op): I am listening carefully to the hon. Lady’s argument. I think that all Members want to find a constructive, positive approach. It occurs to me that a number of those who are not eligible for compensation might be falling on social security benefits, which, of course, is a cost to the taxpayer. Perhaps this is too difficult for us as individual Members, but I wonder whether it would be possible to do some modelling in order to see whether that accruing cost to the taxpayer would justify changing the compensation profile at this early stage. If we are trying to find ways to find money to improve the compensation offer, perhaps that would be an option.

Antoinette Sandbach: I am sure that the Exchequer Secretary has listened to the hon. Gentleman’s submission and I have no doubt that he will pay due regard to it. The Government have announced that payments to non-profit annuity policyholders who are on pension credit will be doubled, so some action has been taken, but we will not get to the heart of the unfairness until the regulatory failure has been properly addressed. That is what I am arguing for on behalf of my constituents.

We know that there are difficult spending decisions to be made, but these people trusted the system and paid in, in good faith, over many years, only to find that there has been consistent, repeated and unwarranted failure of regulation, and that it was so bad that there was found to be maladministration. In such circumstances, our constituents should not be having to pay the price for the failure of Government.

David Mowat (Warrington South) (Con): My hon. Friend has mentioned difficult spending decisions—which is true, to an extent—and the £139 million, which has already been voted through by Parliament. It would be

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completely wrong for that not to be used for additional policyholders, if they can be found. Indeed, if it were not used for that purpose, it would represent a windfall for the Treasury in this fiscal year, which cannot be the right answer. I am as interested as my hon. Friend is to hear the Exchequer Secretary explain the plans for that £139 million.

Antoinette Sandbach: The Exchequer Secretary would be in danger of undoing all the good work the coalition Government did in setting up the fund in the first place if he were seen to be mealy-mouthed, if I may put it that way—I know he most certainly is not—and were to withhold those funds and to seek to bring them back into the Treasury, given the huge injustice suffered by the policyholders.

I am not going to take up much more time, Minister, because I know that you have other Members to hear from. I urge you please to look at the settlement and at what you can do to support those who are in desperate straits, including constituents of mine, and to do the right thing.

Several hon. Members rose

Madam Deputy Speaker (Natascha Engel): Order. Before I call the next speaker, may I remind Members that they are speaking through the Chair, so when the hon. Lady says “you”, she is speaking directly to the Chair?

2.24 pm

Peter Heaton-Jones (North Devon) (Con): I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on securing this incredibly important debate. In common with Members on both sides of the House, I have received a considerable amount of correspondence on the issue and met people in my surgeries who have been affected by it.

Other Members have mentioned this, but I want to pay particular tribute to the Equitable Members Action Group, which has done extraordinary work to highlight the issue and to represent members who have suffered as a result of the unfairness. The group members are persistent, dogged and effective campaigners and lobbyists. I have had the pleasure of meeting the EMAG chairman who covers the whole of the south-west. He is an extraordinarily effective campaigner.

As many Members have said, this is an issue of fairness. Policyholders who were doing the right thing and saving for the future have found themselves in an awful position. We need to take account of that. They have our sympathy, without doubt. Whatever solution we find, however, we also have to keep it in mind that we need to be fair to taxpayers as a whole. Although £2.6 billion is a considerable amount of money that would plug the gap and ensure that those who lost out are compensated in full for their losses, it does, none the less, place a burden—it is a big ask—on the taxpayer and the Treasury to find it. We need to be aware of that.

I am glad that the Treasury has responded to a number of letters from me. There has been a considerable amount of correspondence back and forth. I am particularly happy to have received a letter from a Treasury Minister, which addresses the need and, indeed, the desire to keep

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the matter under review. As my hon. Friend the Member for Tewkesbury (Mr Robertson) says, time is short, so I urge the Treasury not only to keep the matter under review, but to bear it in mind that, sadly, the passage of time means that it needs to be addressed quickly. The letter, which I received in response to a letter I wrote on behalf of the chairman of EMAG in the south-west, makes it clear that the Treasury welcomes submissions and ideas for my right hon. Friend the Chancellor to include in the Budget statement. I am sure that the Treasury is taking account of all those submissions.

It is worth bearing in mind that the Chancellor has already announced—and I am sure he will announce more—extremely welcome changes and reforms to the pension system. I hope we can look at the issue as part of that wider package of reforms.

Tom Tugendhat: As the Treasury looks at that wider package, may I urge it to ensure that helping the EMAG pensioners is very much part of setting the conditions for other people to save? If people feel that their savings will go unrewarded, that undermines the tone that the Chancellor and the Economic Secretary have rightly set in the various pension arrangements they have made, helping people to realise that pensions are worthwhile and will help them in the future.

Peter Heaton-Jones: My hon. Friend makes a very good point. That is, indeed, the tone of the pension package reforms that the Chancellor and the Treasury have made and will continue to introduce. The Equitable Life policyholders need to be part of that wider package.

Mr Robin Walker (Worcester) (Con) rose

Crispin Blunt rose

Peter Heaton-Jones: I give way to my hon. Friend the Member for Worcester (Mr Walker).

Mr Robin Walker: I am grateful to my hon. Friend for giving way and apologise to my hon. Friend the Member for Reigate (Crispin Blunt) for rising at the same time. My hon. Friend the Member for North Devon (Peter Heaton-Jones) is absolutely right to say that this is part of a wider package relating not just to pensions, but to the savings culture more generally. Does my hon. Friend agree that the Exchequer Secretary has done fantastic things to support savers, particularly small savers, in his championing of the credit union movement? Any move in the direction of further support for Equitable Life savers would take that legacy further.

Peter Heaton-Jones: I entirely agree. The Government have done a great deal to support savers and to support and encourage those who invest for the future, and have done a great deal for pensioners as well. That is undeniable. I hope that, as part of the package, there will be some movement on the issue, and that it will be kept under careful consideration.

The letter that the Treasury Minister wrote to me in response to the letter that I wrote on behalf of the EMAG representatives in my constituency contains the welcome information that she is open to submissions in relation to the Budget. She also points out that the Parliamentary Ombudsman’s report was published in 2008, and that—as

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we heard from the hon. Member for Angus (Mike Weir)—it is only since the Conservative-led coalition Government came to office in 2010 that any compensation has been paid. It is important to remember that this Government started the ball rolling.

George Kerevan (East Lothian) (SNP): I appreciate everything that the hon. Gentleman is saying, but there is clearly a difference between banks that have been mis-selling having to pay up for their misdeeds, and the Treasury, regardless of party—and the state, regardless of who are the Government of the day—paying for a regulatory failure. It is not a question of charity from a Government to the individuals who have suffered under Equitable Life. People suffer as a result of a regulatory failure, and therefore it is the Treasury’s duty to pay full compensation, just as it is the banks’ duty to pay full compensation to those who have suffered as a result of mis-selling.

Peter Heaton-Jones: I take the hon. Gentleman’s point, but let me return to a point that I made earlier. He refers to the Treasury paying compensation. The Treasury has no money; it is all taxpayers’ money. We need to strike a careful balance. There must be fairness, not only to Equitable Life policyholders but to taxpayers in general, because it is they who will ultimately have to foot the bill for any compensation.

Crispin Blunt: May I briefly make the point that there is a taxpayer interest here? If the savings culture is undermined, the taxpayers’ interests are absolutely at stake. We need people to invest in pensions to ensure that they are not dependent on the taxpayer in their retirement.

Peter Heaton-Jones: That is a good point, and I do not think that it is wholly at odds with the point that I was seeking to make.

I shall not delay the House for much longer. We all recognise that Equitable Life policyholders have found themselves in an impossible position—and, again, I pay tribute to all the work that they have done—but it should also be recognised that asking the taxpayer to provide £2.6 billion of compensation, if that is indeed the figure, is a big ask. Let me say to the Minister that that I acknowledge that balance, and I hope that we can find a way along what is a difficult path. I welcome the Treasury’s assurance that it will entertain all submissions from Members of Parliament, members of EMAG and members of the public, and will keep the matter under careful consideration so that we can resolve it in a way that will satisfy both Equitable Life policyholders and the interests of the wider taxpayer.

2.33 pm

Huw Merriman (Bexhill and Battle) (Con): I thank my hon. Friend the Member for Harrow East (Bob Blackman) for initiating the debate, and I have been asked by my constituents to thank him for everything that he has done on their behalf over the years.

In 2010, when standing for election in North East Derbyshire, I engaged with many Equitable Life policyholders. They were your constituents, Madam Deputy Speaker, and they were full of praise for the work that you had done on their behalf. I added that to a lengthy list of reasons why you were returned and I

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was not. Having served my apprenticeship, I put some of those best practices to good effect when I was selected for the constituency of Bexhill and Battle, and was subsequently elected.

All the constituents with whom I have interacted have put their positions with clarity and with understanding of the economic challenges that the Government face in balancing the books. Given that those people had planned to save so sensibly for their own retirement, it is clear that prudence and budget-planning were second nature to them. I pay tribute to my hon. Friend the Economic Secretary to the Treasury, who has responded to my numerous items of correspondence on this subject both in person and in writing. Her explanations, and the time that she has given to explaining, have helped me to communicate with my impacted constituents, and for that I am very grateful.

As I interpret a recent letter from the Treasury, prompted by one of my constituents, I understand that the Government have closed the scheme to new compensation claims, and will reallocate unclaimed moneys remaining in the pool to policyholders who are receiving pension credit. I had understood the words

“I am sorry to say that no changes to the funds allocated to the Scheme are planned”

to mean that no new moneys would be added to the pool, and that the £1.5 billion paid out would be the final payment, in the light of the Parliamentary Ombudsman’s direction that the Government should have regard to the impact on public finances. However, one of my more eagle-eyed constituent policyholders has read those words to mean that, while the manner in which the funds within the pool are to be allocated is fixed, that does not expressly rule out the possibility that new funds could be added to the pool, and go towards the £2.6 billion shortfall, during the current term.

I should be grateful if the Minister would make clear whether any further funds for the pool are expressly ruled out for this term, so that I can pass on that clarification to my constituents. It may sound perverse, but many of them would accept that position, because they have reached a stage at which they would like to have absolute finality, and to know whether it makes sense for them to continue funding the fight.

I also want to say something about the stated position for with-profits policyholders. The letter that I received from the Treasury states that they were compensated in full. I understand that the proxy value of the pensions of pre-1995 with-profits policyholders was calculated by virtue of a benchmark from the Prudential, which was considered to be a similar proxy for their own policies. However, I understand that in the case of post-1995 with-profits policyholders, the proxy value was calculated by the benchmarking of not only Prudential, but Scottish Widows. The appropriateness of the latter as a benchmark was disputed by some of my constituents on the grounds that it was a poorly performing policy. Those policyholders dispute the claim that they have received full value, and have drawn distinctions between their own policy and that of the Prudential, and the policy of Scottish Widows. I should like the Minister to tell me whether my understanding is correct. Perhaps he will also comment on why the Scottish Widows policy was seen as a fair benchmark for this exercise, if my contention is indeed along the right lines.

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I should add that I empathise hugely with all the policyholders who have been impacted by the losses to their policies. However, I am also conscious that this matter was determined before my election, and that I was elected on a manifesto which promised to deliver a budget surplus. Adding a further £2.6 billion would mean that other constituents of mine would have to provide for it. I have explained that difficult concept in person to my impacted constituents, because I believe in being direct when a resolution is unlikely to be arrived at, and I am indebted to them for the manner in which they have responded to my direct approach.

George Kerevan: Is the hon. Gentleman saying that he prefers delivering a budget surplus to delivering justice?

Huw Merriman: I was elected on the basis that there would indeed be a budget surplus. I think that it would be wrong of me to stand up and try to proclaim—this was mentioned earlier—that £2.6 billion could be found down the back of the sofa. If only it were that easy. I also believe in being direct and straight with my constituents, and I hope that the hon. Gentleman thinks that I am doing so now.

I support the Government in their approach to this difficult issue. Let me end by asking the Minister, on behalf of my constituents, whether the funding of the scheme is indeed final for this term, and whether the use of the Scottish Widows policy benchmark was justifiable.

2.39 pm

Ian Blackford (Ross, Skye and Lochaber) (SNP): It is a pleasure to sum up the debate. I warmly thank the hon. Member for Harrow East (Bob Blackman) and those who signed the motion. As has been pointed out, the wide-ranging all-party parliamentary group has 195 members from all parties, which demonstrates the interest hon. Members take in this matter. It was also said in the debate that, in each of our constituencies, there are around about 2,000 Equitable Life policyholders, which shows the scale of the problem we face and why we must take the matter seriously. I am delighted that we are having this debate today.

The hon. Gentleman talked about the outrageous scandal, which is exactly the point. He went on to talk about the perceptions of market risk—markets going up and down—and the promises that were given to Equitable Life policyholders. However, in the main, we are not only talking about promises, because Equitable Life gave guarantees to its policyholders. We ought to reflect on that point, particularly in the light of what he said in the debate about who knew within the company, the regulator and the Government. Ultimately, the Government must stand behind the regulator when there is market failure of the degree that took place with Equitable Life. That is their responsibility.

The hon. Member for Bexhill and Battle (Huw Merriman) spoke at the tail-end of the debate. I say to him that everybody understands that all parties want a balanced budget, but we also have a moral and ethical responsibility to protect the consumer interest. That is what we are talking about today. I ask the Minister to reflect on what was said by the hon. Member for Harrow East and others on looking for those who have pre-1992 annuities and considering what can be done for them.

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Two broad themes have been mentioned time and again in the debate: fairness, which was mentioned by the hon. Members for Sittingbourne and Sheppey (Gordon Henderson) and for North Devon (Peter Heaton-Jones); and regulatory failure, which goes back to the Government’s ultimate responsibility, and which was mentioned by the hon. Member for Eddisbury (Antoinette Sandbach).

The hon. Member for Romsey and Southampton North (Caroline Nokes) made the point about the 2,000 members and the fact that all hon. Members are still getting letters from constituents. Many of my SNP colleagues have had them in the past few weeks.

One of the most important points was made by my hon. Friend the Member for Angus (Mike Weir) and others. We must have confidence in the financial markets. If we are not going to stand behind the policyholders in this case, that undermines the savings culture that we want. We want people to invest in pensions and know that there is consumer confidence problem. We must tackle that.

I want to put this debate in the context of the good debate we had just a couple of weeks ago on the Financial Conduct Authority. One much-discussed theme was the importance of consumer protection and trust. On the back of scandals such as those involving Equitable Life policyholders, it is clear that many consumers are concerned about whether they can trust the providers of financial services products, whether they can trust the regulatory regime to protect them, and whether the Government will discharge their obligations to protect the consumer interest. The significance of that cannot be overstated.

Brendan O’Hara (Argyll and Bute) (SNP): Given that the regulator was there to protect consumers and that the Government were standing behind the regulator, does my hon. Friend agree that, when that regulator failed to protect the consumer, the Government had a moral obligation to step in and protect policyholders?

Ian Blackford: I strongly agree. I can hear my hon. Friend the Member for East Lothian (George Kerevan) commenting in the background—he made that same point in the debate, as did the hon. Member for Reigate (Crispin Blunt). There is unity in the House on wanting a savings culture. We want people to retire with decent pensionable income, but we will create that confidence only if we show that we are prepared to stand behind the Equitable Life consumers. They were let down by the company and the regulator, and the Government have that moral and ethical responsibility to step in. That should not be underestimated.

Kevin Foster (Torbay) (Con): Does the hon. Gentleman agree that this is partly about building intergenerational confidence? We want people to start saving for pensions in their late 20s and their 30s. They need to have confidence that that money will still be there in a pot in future, and that there is a proper system of regulation. This is about building confidence for those who will save in future, and not just about the Equitable Life policyholders who have been affected in this instance.

Ian Blackford: I strongly agree with the hon. Gentleman and am happy to associate myself with his comments. It is about creating that long-term stability in the financial services industry and ensuring that we have the right

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regulatory regime. We must have the right architecture for both private and public pension provision in this country. I hope all in the House have a shared interest in doing that. That is why the debate is so important, and why the Government must respond in the correct manner. How we deal with the long-running saga of Equitable Life is important in the context of his intervention.

Let us remind ourselves of the background. Equitable Life was a major provider of with-profits pension plans. A minority of policyholders invested in policies that offered a guaranteed annuity rate. That rate was set below the normal historical rates, but towards the end of the 1980s, that “normal” changed. Increasingly, the guaranteed annuity rate was over-generous and ultimately unaffordable to Equitable Life in the long run. In response, Equitable stopped sales and reduced the capital value of the pension pots by reducing discretionary bonuses. Guaranteed annuity rates were thus maintained only because the capital sum was far lower than had been expected.

Ultimately, GAR holders took legal action to stop Equitable from rigging pension payouts and won in the House of Lords in 2000, as my hon. Friend the Member for Angus mentioned in his speech. That judgment increased the financial burden on Equitable by about £1.5 billion, a sum that threatened its solvency. Equitable Life hoped to fill that gap by suspending distributions to policyholders and by selling the business, but it was unable to find a buyer. It ceased all further business and became a closed fund. It also had to reduce policy bonuses, and hence the ongoing pensions of investors. Pensions reductions of up to a third were common. It was a perfect storm.

Policyholders have long tried for compensation. Two ombudsman reports concluded that there had been maladministration and that injustice had been suffered. We should remind ourselves of what was said in the second ombudsman report. The conclusion stated:

“the Government should establish and fund a compensation scheme, with a view to assessing the individual cases of those who have been affected by the events covered in this report and providing appropriate compensation.”

I emphasise “appropriate compensation”.

Margaret Ferrier (Rutherglen and Hamilton West) (SNP): I want to highlight the case of my constituent, Mary, an ex-machinist, and her husband, an ex-electrician’s mate. They worked all their lives contributing to our society and economy for decades and opted to invest a substantial amount of money in a scheme—an Equitable Life scheme. Due to years of negligence by the company and different Governments, the money was snatched away. Sadly, Mary’s husband passed away last year and she was given only a small amount of compensation. Her husband is not here to see justice being served. Surely we must act for Mary and other Marys across the UK?

Ian Blackford: I wholly concur with my hon. Friend and her constituent. Other Members have made the point that there is a sense that the Government must act quickly because the policyholders are dying. We have a responsibility to deal with the problem in a timely manner.

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I am conscious of time, so I will try to wrap up quickly. The 2008 report also stated that regulation was not implemented properly, meaning

“consistently, fairly, and with proper regard to the interests of those directly affected”.

We understand that that involved previous Governments—the Minister will be pleased to hear that not even I would blame the current Government for this one—but we do have a responsibility to reflect on what has been said and what actions we should take as a consequence.

All the parties involved accepted the ombudsman’s second report and accepted the case for compensation. During the inquiry, EMAG told the ombudsman that it had calculated the loss for those investing after 1990 at £3.2 billion if they remained with Equitable as against £4.6 billion if they had invested elsewhere. The final conclusion from the ombudsman states:

“The government should establish and fund a compensation scheme. The aim of such a scheme would be to put those who have suffered a relative loss back into the position that they would have been in had maladministration not occurred.”

We have all reflected on what the Government did with the £1.5 billion, but it is the issue of fairness that we keep coming back to.

This has already been mentioned, but it is worth stating again that before the 2010 election, the main Equitable Life policyholders’ action group, EMAG, lobbied MPs to seek support for compensation for its members. Perhaps as a result, the 2010 Conservative manifesto included this brief comment:

“We must not let the mis-selling of financial products put people off saving. We will implement the Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure.”

It has been said today that the Government could not go beyond the £1.5 billion because of the financial circumstances at the time. Let us take this opportunity today to right that wrong and to plug some of that gap. I appeal to the Government to listen to all the points that have been made across the Chamber today and to do the right thing for the policyholders of Equitable Life.

2.50 pm

Rebecca Long Bailey (Salford and Eccles) (Lab): I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this important debate today and on the articulate way in which he described the events that many of our constituents have faced. He touched on many of the issues that I will highlight in my speech. And of course it is always a pleasure to stand opposite the Exchequer Secretary to the Treasury, the hon. Member for East Hampshire (Damian Hinds).

I would also like to thank the various Members who have spoken today. I will not go through them one by one as I know we are pushed for time, but there were several emotional contributions that I would like to highlight. My hon. Friend the Member for Great Grimsby (Melanie Onn) told the story of the lady in her constituency who lost £40,000 and got only £12,000 back. The hon. Member for Romsey and Southampton North (Caroline Nokes) said that she had noticed a decline in the number of constituents visiting her to discuss this issue and that, sadly, it was because many of them had either passed away or given up hope.

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The fate of Equitable Life and those who invested in it has been debated in this House for more than 15 years by Members on both sides. I commend the work of the Equitable Members Action Group, which I will call EMAG for the sake of expediency. I would also like to thank the many Members of this House who have campaigned tirelessly on behalf of their constituents to ensure that this issue is not kicked into the long grass. It is difficult not to sympathise with the anguish and worry that many of those investors have experienced. Many have seen their nest eggs disintegrate, and they feel cheated. Over the years, it has become clear that, despite all the efforts to review the issue, there is no one universally agreed strategy to compensate them. It has therefore been difficult to establish a course of action that will truly put the matter to bed.

Along with many other Members, I appreciate the action that the Government have taken to compensate those who were disproportionately affected by this sorry affair. However, as we have heard today, concerns remain about the management and assessment of compensation payments. More than 90% of Conservative Members in the last Parliament signed the following pledge:

“I pledge to the voters of this constituency that if I am elected to Parliament at the next general election, I will support and vote for proper compensation for the victims of the Equitable Life scandal and I will support and vote to set up a swift, simple, transparent and fair payment scheme—independent of government, as recommended by the Parliamentary Ombudsman.”

The Prime Minister, the Chancellor of the Exchequer and the Exchequer Secretary to the Treasury signed that pledge to provide proper compensation for those affected by the events at Equitable Life. It would be helpful to ascertain whether the Minister feels that the pledge has been fully met today.

The assessment of compensation payments—and the amount allocated by the Government—is not a simple matter. At the time of the second ombudsman’s report, EMAG estimated the losses incurred by policyholders investing after 1990 at £3.2 billion if they remained with Equitable Life and at £4.6 billion if they had invested elsewhere. In comparison, the 2010 Chadwick report assessed the loss at £500 million on the basis of assessing maladministration. There is therefore a clear difference between the principles used to calculate the EMAG estimates and those used to calculate the Chadwick estimates. All those figures are of course different from the £1.5 billion and the subsequent £500 million top-up offered by the Government. EMAG states that, according to its own calculations, the outstanding figure is between £2.6 billion and £2.8 billion.

I should also like to address the administration of the scheme generally. The National Audit Office reported in 2013 that the scheme had faced a number of administrative issues. The NAO appreciated, as do I, that the task of setting up the scheme was a difficult challenge. It was a complex operation undertaken in quite a short period of time. However, it noted that the scheme had significant issues with tracing the identity of some policyholders, as the data provided by Equitable Life were out of date. Following the publication of the findings, the Public Accounts Committee undertook its own report into the administration of the scheme and concluded that the Treasury had

“not used all information available to trace as many policyholders as possible”.

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In April 2013, the NAO reported that only 35% of payments had been made and the PAC quoted that the Treasury estimated that it may not trace 17% to 20% of policyholders. As of 30 December 2015, the scheme had issued payments to 915,453 policyholders, representing 88% of those eligible—only a slight improvement since the PAC’s critical findings. Given that the scheme closed for new claims on 31 December 2015, will the Minister tell us how many of the remaining 12% of eligible policyholders were found? At the time, it was also recommended that the Treasury and National Savings and Investments would

“work with the Equitable Members’ Action Group to explore options for utilising data to contact policyholders who have not yet received payment”.

Will the Minister confirm, therefore, that the recommendations of the PAC with regard to that were acted on and that all reasonable steps were taken to contact eligible policyholders?

The NAO and the PAC also found that some policyholders were dissatisfied with the responses to their queries and complaints. They included policyholders receiving duplicate requests for the same information and generic responses in relation to specific queries. Will the Minister outline what steps were taken to ensure that customer service has improved since the reports and that it will remain at an adequate level for those policyholders who are still in receipt of annuity payments from the scheme?

The next concern I wish to raise with the Minister is the amount of money it has cost to administer the payment scheme. National Savings and Investments, an executive agency of the Treasury, was tasked with operating the scheme. It originally outsourced to Siemens, whose contract was then bought by Atos. The PAC expressed concern in 2013 that the Treasury was not achieving value for money in the contract with Atos to deliver the scheme. The contract was based on time and materials, and it is argued that there was a vast amount of waste of taxpayers’ money as a result. The total budget for administering the scheme was set at £57 million. In 2013, National Savings and Investments estimated that the cost would go £4 million over budget. Will the Minister confirm whether the payment scheme was delivered on budget, and, if not, by how much it overspent?

Finally, the PAC recommended that the Treasury undertake a lessons-learned exercise, as it felt the failures of previous Government compensation schemes had not been addressed when setting up the Equitable Life payment scheme. The Government accepted that recommendation and confirmed that they would produce two reports: one in November 2013; and a final report, to be shared with the PAC, the NAO and the Major Projects Authority in early 2016. Will the Minister take this opportunity to update the House on the progress of the second lessons-learned report?

On the subject of lessons learned, it is, above all, incumbent on us to ensure that future such scandals do not take place. Will the Minister tell us, therefore, what measures the Government have put in place to stop this happening again? In particular, pension fund providers and their fund managers continue to resist calls for transparency of costs and performance, so are the Government taking any steps to ensure that they inform

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pension scheme members of the true costs of investing? What plans do the Government have to review the governance arrangements for pension funds? Will he confirm that governance committees are currently without a fiduciary duty to their members in contract-based pensions and have they given any consideration to changing that?

It is clear that that although some progress has been made to address the anguish and loss caused by this matter, a number of questions remain. I look forward to the Minister’s response.

2.59 pm

The Exchequer Secretary to the Treasury (Damian Hinds): This is an extremely important subject, and I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on securing the debate and bringing it to the Floor of the House today. His tireless work and that of other colleagues has been of great importance to many of our constituents. There are many human stories, and we have heard a number of them today from colleagues across the House. I am grateful to have the opportunity both to set out what this Government have done to address this long-standing issue and to set the record straight on some of the background.

Equitable Life has been a very sorry tale, and we all share sympathy for those affected by it. As the motion notes, this Government have taken action to resolve the long-standing issue, which is something that previous Governments failed to do, as noted by my hon. Friends the Members for Eddisbury (Antoinette Sandbach) and for North Devon (Peter Heaton-Jones).

Although Equitable Life remains a going concern and continues to trade, its problems in the 1990s and at the turn of the century caused a great many of its policyholders to suffer financial and emotional distress. Many different factors contributed to the losses suffered by policyholders. The ombudsman’s 2008 report established the part played by the then Government.

When we came to government, we committed to implement the ombudsman’s recommendation that the Government should make payments to Equitable Life policyholders in recognition of the part that was played by the Government at the time. We took swift action, introducing the Equitable Life (Payments) Bill in 2010, with payments starting to be made to policyholders in June 2011, six months after the Bill received Royal Assent.

Mr Charles Walker: My hon. Friend knows that the thrust of this afternoon’s debate is a request for additional money to be made available on top of the money that has already been earmarked for compensation to Equitable Life policyholders. Will the Government be able to find additional money?

Damian Hinds: I will have to disappoint my hon. Friend, because the public finances remain in a very difficult state. Although the economy and our public finances have improved compared with where they were, money is still extremely tight.

We established a set of rules for the payments, based on the Government’s full acceptance of the parliamentary ombudsman’s findings. The scheme was based on the assumption that all policyholders considered the incorrect

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regulatory returns when making their investment and would have decided not to invest in Equitable Life had those returns been correct. Obviously, those are quite conservative assumptions. The Government used the ombudsman’s findings to calculate the resulting individual loss by assessing the Equitable Life returns against those of comparator companies. That led to an assessment of the loss from Government maladministration of £4.1 billion.

Despite the constraints facing the public purse, the 2010 spending review announced that up to £1.5 billion would be made available for payment to eligible policyholders. Out of that sum, following consultation, we decided to pay the with-profits, or trapped, annuitants in full. As a result, this group of policyholders will receive an annual payment for life, and the actuarial assessment of those payments is that the Government will be making payments to this group well into the next decade and probably beyond.

The total cost of those payments is assessed to be around £625 million—though that is dependent on how long policyholders live. Importantly, the £100 million contingency fund, to which my hon. Friend the Member for Harrow East referred, is an accounting provision to provide a safety net in case the annuitants live longer than the central forecast. The remaining £775 million of available funding was distributed pro-rata to other policyholders on the advice of an independent commission, and that resulted in a figure of 22.4 pence in the pound of their relative loss.

Of course I know that that was deeply disappointing to many, but these were difficult decisions that were taken in the light of the position of the public finances. As I said just now in reply to my hon. Friend the Member for Broxbourne (Mr Walker), public finances remain in a very difficult position, and we have to take decisions in the interests of overall fairness to all taxpayers.

Margaret Ferrier rose—

Damian Hinds: I hope that the hon. Lady will forgive me, but I will make some progress, as time is short.

Margaret Ferrier: On that very point—

Damian Hinds: I will take the point.

Margaret Ferrier: With the Government preparing to usher in the successor to the Trident nuclear weapon system, which is estimated to cost £167 billion, I call into question the Cabinet’s priorities. If the Government can find money for that, they can find money to pay Equitable Life policyholders.

Damian Hinds: The hon. Lady’s definition of “on that very point” has a degree of elastic in it.

The motion notes that the ombudsman recommended in her report that policyholders should be put back in the position that they would have been in, had Government maladministration not occurred. What the ombudsman went on to say just after this recommendation, however, is that it was appropriate also to take into account the impact on the public purse when considering the funding of payments.

Mr Laurence Robertson (Tewkesbury) (Con): Will my hon. Friend give way?

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Damian Hinds: If my hon. Friend will forgive me, I must make progress. I know there is another debate to follow and I am time-limited.

The ombudsman has written to the all-party parliamentary group on the funding and said that the Government’s decisions on affordability and eligibility cannot be said to be incompatible with her report.

As announced in the summer Budget, and following more than four years of operation, the scheme closed to new claims on 31 December. As part of that closure, we did find a way to double the payments received by investors who had previously received the 22.4% of their losses, but who were also in receipt of pension credit. These further payments started just before Christmas and will be completed shortly.

There have been many representations regarding the group of policyholders known as the pre-92 annuitants. Although they were not included in the payment scheme for well-established reasons that have been debated on in this House, the Government recognised that they were not receiving the income they expected from their annuities. Although that is not due to Government maladministration, in late 2013, those policyholders received a payment of £5,000, or £10,000 for those in receipt of pension credit.

The Government have also received representations about the fact that, as the economy improves, further funding should be made available to the payment scheme. The improvements our economy has made since 2010 are greatly to be welcomed and show that the Government’s long-term economic plan is working, but the plan is not complete and we have some way to go to fully restore the public finances. Based on latest outturn data, the deficit was £89.1 billion last year. This is why we have no plans to reopen the payment scheme after more than four years of operation. So apart from the ongoing payments to annuitants, which will continue for many years to come, our focus now is to complete the orderly wind-down of the scheme by summer this year.

We do not yet know what the final picture will be, but we expect that by the summer, close to 950,000 policyholders will have been paid around £1.1 billion by the scheme. That is a considerable achievement, given the issues that the payment scheme faced in tracing policyholders, as mentioned by the hon. Member for Salford and Eccles (Rebecca Long Bailey), who speaks for the Opposition, and exceeds the expectations set out in the National Audit Office report of 2013, to which she referred.

I will respond briefly to a couple of points made during the debate. My hon. Friend the Member for Harrow East asked for a progress report on payments. As I said, we will know the final position on that by the summer and a report will then be published. We do not yet know the final position on the cash figures, but we expect the difference at the end to be lower than the £39 million that my hon. Friend referred to. The £100 million that I mentioned earlier, the contingency on the actuarial projections, is in a different category.

My hon. Friend the Member for Bexhill and Battle (Huw Merriman) asked for clarity, as did my hon. Friend the Member for Broxbourne in an intervention, on whether more money would be forthcoming. I wish I could say that was the case, but because of the condition of the public finances, that is not possible. My hon. Friend the Member for Bexhill and Battle also asked

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about the Scottish Widows benchmark. This is a complicated issue, but the core concept in the scheme was the concept of relative loss, which has to take a view of the investment’s performance, compared with similar investments available elsewhere. The Scottish Widows fund that he referred to was not available to invest in, I understand, before 1995, whereas the Prudential investment was.

The hon. Member for Salford and Eccles asked whether the Treasury had taken all reasonable steps to trace policyholders. There was national advertising and various other tracing methods, including through the Department for Work and Pensions, and also a data list that came from EMAG with members’ details to help trace them. In terms of the spend on administering the scheme, our forecast outturn is within about 3% of the original budget.

The hon. Member for Great Grimsby (Melanie Onn) alluded to the contrast with savers in the Icelandic banks. Of course, that was a very different situation, where ex gratia payments were made to UK depositors in those banks. That was done as a result of a decision by the previous Government to guarantee all qualifying deposits when there was a danger of not having financial stability in the UK. However, the Financial Services Compensation Scheme was loaned the money to facilitate those payments, in the expectation that the money paid to UK depositors would come back from those banks eventually.

A number of hon. Members have raised the issue of general confidence in financial institutions and encouragement to save. That is very important to the Government, who have helped more than 5 million people to save for retirement for the first time, or to save more, through automatic enrolment. Individuals now also have the freedom to access their pension from the age of 55 if they wish.

The Government have also acted strongly on reforming financial regulation to ensure that it is fit for purpose in future. The Financial Services Act 2012 dismantled the failed tripartite system and created a new architecture and approach for financial regulation. I am confident that our actions have provided a robust framework for the authorities to work within.

I reiterate my thanks to my hon. Friend the Member for Harrow East and other colleagues for securing the debate, which has given us another opportunity to discuss these important issues. I also recognise the hard work the all-party group has done.

I appreciate that many policyholders are not receiving the income they expected, but by paying more than

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£1 billion to more than 900,000 policyholders, we have taken action to resolve the Government’s part in the Equitable Life issue. We have been able to pay in full the losses of the most trapped policyholders and to double the payments to vulnerable non-annuitant policyholders, as well as providing a one-off payment to the pre-1992 annuitants, who, though unaffected by the maladministration, were recognised by the Government to be suffering as a result of their declining annuity income. In doing that, we have balanced the needs of policyholders against the need to reduce the deficit and repair the public finances.

3.12 pm

Bob Blackman: I thank hon. Members and all three Front-Bench speakers for the constructive and fair way in which the debate has been conducted. Almost 2% of the population have been affected by this scandal, and we have a duty to ensure that they are given full compensation for the loss they have suffered.

I thank the Minister for laying out his argument, and I thank those who have contributed on the personal views of different constituents. I listened carefully to the Minister, and the Treasury accepts that the compensation bill for Equitable Life policyholders is £4.1 billion. Of that, £1.5 billion has been paid out, which leaves a balance of £2.6 billion.

The Minister rightly said that compensation payments will be made well into the next decade for those who have suffered loss. It therefore seems reasonable to me and, I think, to Members across the House—the Chancellor will no doubt be listening to this—that as the economy recovers, our long-term economic plan comes to fruition and we reach a position where the budget is in balance, those who have saved for their retirement are given full and proper compensation.

As the economy recovers, therefore, the Government can top up the scheme if they choose to, and I urge the Chancellor to pledge to do that in his Budget speech on 16 March. As we reform pensions in other ways, we can then send out the signal to young—and not so young—people that it is right to save for the future and for retirement and that if such a scandal were ever to happen again, the Government would step in to protect the retirement incomes of those who do the right thing and save for their old age.

Madam Deputy Speaker (Natascha Engel): Order. Before we come on to the next debate, I inform Members that I am going to raise the speech limit on Back-Bench contributions to seven minutes, in order that they are aware that they have a little more time than is shown on the annunciator.

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Recreational Sea Bass Fishing

3.15 pm

Scott Mann (North Cornwall) (Con): I beg to move,

That this House believes that the recent EU restrictions on recreational sea bass fishing are unfair and fail to address the real threat to the future viability of UK sea bass stocks; and calls on the Government to make representations within the Council of the EU on the reconsideration of the imposition of those restrictions.

I thank the Backbench Committee for granting this very important debate. Let me place my cards firmly on the table: I am a recreational angler, and a very passionate one. I have cast from many a beach in Cornwall. I have fished with plugs and lures from rigid-hulled inflatable boats. I have regularly fished and ledgered on the Camel estuary and taken great pleasure in digging my own lugworms—big long trenches of lugworms—and ragworms. It is great to be on the coast looking out over Daymer bay and Padstow with the sun going down, the tide coming in and the lines dipping into the sea, waiting for that bite.

Mr Charles Walker (Broxbourne) (Con): Am I right in thinking that my hon. Friend enjoys visiting The Art of Fishing in Wadebridge—one of the best tackle shops in the country, let alone Cornwall?

Scott Mann: That is a shameless plug, but it is a fantastic fishing shop, I have to say. The chap there has some very good fishing rods and tackle that can be purchased at very reasonable rates.

I have set the scene for my fishing expeditions on the Camel. However, the situation this year is very different from that in previous years. For the first six months of this year, if I, as a recreational angler, caught a bass that was of legal size, I would not be allowed to keep it—I would have return it to the estuary—yet a commercial fishing boat that was netting on the estuary would be able to claim that fish and take it for the table.

Mrs Sheryll Murray (South East Cornwall) (Con): Does my hon. Friend accept that he has to differentiate with regard to commercial fishing nets, because driftnet fishermen are banned from landing any bass whatsoever?

Scott Mann: I will come on to some of the different elements of the fishing industry when I talk about the Cornwall inshore fisheries and conservation authority.

I am here today not just to speak for myself as a recreational angler but to speak up for the 900,000 recreational sea anglers in the UK. There are many parts of the fishing industry, as my hon. Friend the Member for South East Cornwall (Mrs Murray) pointed out. When I served on the Cornwall sea fisheries committee, we saw people with beam trawlers, people from the under-10-metre fleet, rod-and-line anglers, and many others who made a living out of fishing. There needs to be a properly managed inshore fleet so that we can have a sustainable future for our fishing industry.

Tim Loughton (East Worthing and Shoreham) (Con): As another MP with a coastline, may I ask my hon. Friend to acknowledge that not only are some 10,400 jobs dependent on sea angling, but there is a whole lot of leisure industry business that supports sea anglers—accommodation and everything else—with sea bass fishing

11 Feb 2016 : Column 1820

being, of course, the most popular form of sea angling? An enormous business worth over £1.2 billion, it is estimated, lies behind this.

Scott Mann: My hon. Friend makes an exceptionally good point, and I fully agree. I will go on to talk about some of the tourism benefits. We have seen some great uplifts in places such as Ireland and the USA, where there have been big recreational fisheries for a long time.

The crux of my argument is that it is grossly unfair to penalise rod-and-line anglers for the first six months of the year while commercial boats are allowed to operate in that period.

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): Does my hon. Friend recognise that there is a real need to have some data to support any action that is taken? Otherwise. it will be very difficult for us to work out a strategy as to what we should be doing.

Scott Mann: I agree with my hon. Friend that it is important to have data. The issue is that the data recently presented to the EU show that the bass fishery is in decline and needs to be managed effectively.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): I congratulate the hon. Gentleman on securing the debate and on being so generous with his time. He mentioned Ireland. My understanding is that following the depletion of sea bass stocks in the ’60s and ’70s, Ireland banned commercial fishing and concentrated on the recreational side, which has expanded its tourism base. Despite the expansion and re-strengthening of the stock of sea bass, Ireland continues to ban commercial fishing.

Scott Mann: The hon. Gentleman is correct. I believe that Ireland relies solely on the recreational sector, but that has been of huge benefit to the tourism industry. In the spirit of the Opposition, I will read not from Jeff or Rosie but from Paul. Paul is a sea angler in north Cornwall who wrote to me:

“After enjoying free and unfettered access to the inshore bass fishery for countless generations, it is understandable that many anglers feel aggrieved that they are suddenly having the right to take fish for the table so severely limited that in effect for many it will equate to zero.

What is not in doubt is that bass stocks are in serious decline and most anglers agree that steps should be taken to…reverse this situation. Despite the assertion that the cause of the decline has little or nothing to do with angling pressure, most anglers are content to accept reasonable reductions in the number of fish they can retain. Hence the widespread, uncomplaining acceptance of the three fish ‘bag limit’ introduced for recreational sea anglers in September 2015.

However, within the RSA community it was naively believed that the commercial sector would have been asked to make similar reductions in catch effort. No such drastic reduction in commercial effort was achieved. At this stage, many RSAs were both angry and perplexed”—

Mrs Sheryll Murray: Does my hon. Friend accept that the current proposals ban pelagic midwater trawling and impose a 1% bycatch limit on all mixed fisheries, including for fishermen who fish commercially from my hon. Friend’s constituency?

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Scott Mann: I am aware of those regulations, but I am also aware that gillnetting and commercial fishing are still permitted in bass nursery areas.

Paul continued in his letter:

“The results of the negotiations are well known and in effect fall a long way short of the scientific recommendation…We call for an immediate review of the regulations in respect of the daily ‘bag limit’ for RSAs and a prompt correction of ill-judged legislation. It belies the intelligence of the EU commissioners not to recognise how illogical the rule is in its present form.”

Melanie Onn (Great Grimsby) (Lab): I want to make two points. First, the Commission has proposed the measures but does not decide on them. Those decisions are made by Ministers of national Governments, including our own Minister with responsibility for fisheries. Secondly, is the hon. Gentleman aware that last year, Labour MEPs, having received representations from recreational sea anglers, called for a multi-annual management plan for sea bass stocks that made specific reference to the importance of recreational fisheries, but UKIP and the Tories voted against it?

Scott Mann: I was not aware of that, and I thank the hon. Lady for making those points. I want to talk about some of the EU changes. I welcome the ban on French pair trawlers between January and April. They account for about a third of the bass taken in British waters, and many of the bass that they catch are spawning fish. Taking large spawning fish out of the ecosystem means there are no smaller fish to grow and become bigger fish. In the EU changes, we should be talking about reclaiming our territorial waters. The EU holds the common fisheries policy up as a shining example of joined-up thinking, but I am yet to find a commercial fisherman or a recreational sea angler who believes that the CFP is a good thing.

Huw Irranca-Davies (Ogmore) (Lab): I am delighted to be drawn into intervening by the hon. Gentleman. May I draw his attention to a 3-inch piece in a right-hand column in The Times about six months ago—a tiny little thing—which reported that the long-running battle to replenish cod in the North sea was being won? Cod stocks are growing bigger, as we can read in the press again today. North sea cod has been replenished because instead of cod wars we have agreements based on science to replenish the stocks. Those agreements are working.

Scott Mann: I will try to check out that column in The Times. It is not my regular newspaper—I normally read The Telegraph and The Sun—but I will go back and check it. Such agreements may be fine in other waters, but we should have an understanding that our territorial waters inside the 6-mile limit should be protected for our fisheries and our people.

Mr Christopher Chope (Christchurch) (Con): My hon. Friend is making a splendid speech, which I know will be much supported by Christchurch fishermen. Does he agree that Iceland decided to take control of its own fisheries and that those fisheries are a fantastic success?

Scott Mann: I welcome my hon. Friend’s intervention. I agree that many fisheries people feel that that is the case.

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Antoinette Sandbach (Eddisbury) (Con): Does my hon. Friend accept that the huge decline in cod stocks was initially caused by the highly discredited common fisheries policy implemented by the European Union?

Scott Mann: I thank my hon. Friend for her intervention. I recently read a book about the Bering sea and the mass stocks that it used to have. No fishery can be managed properly unless it is looked after effectively. We used to see huge shoals and salmon and sea trout regularly running the Camel, but such stocks no longer materialise.

Melanie Onn: The hon. Gentleman is being incredibly generous in giving way. One of the very significant reasons for the depletion of stocks is the advancement of technology in trawlers. The fact that deep-sea trawlers can go further using technologically very advanced sonar is one of the principal courses of depletion, not the common fisheries policy, as has been erroneously suggested.

Scott Mann: If our fishing boats have to go outside the 6-mile limit to catch fish, that surely shows that the fish are not actually within that limit and that fish stocks have been depleted over the years.

Recreational sea anglers fully accept that fishery resources are finite and that there should be controls on their activities—minimum landing sizes, bag limits, seasonal closures—to protect this public resource from over-exploitation. The Council of Minister’s recent decision to prevent recreational fishers from taking any bass for the first six months of 2016, while sanctioning commercial fishing for bass for the first four months, is irrational. The decision is a symptom of a fisheries management regime that is broken and a common fisheries policy that is unfit for purpose. The EU has displayed utter contempt for our recreational sea anglers and those whose livelihoods depend on recreational sea angling.

Huw Merriman (Bexhill and Battle) (Con): Will my hon. Friend give way?

Scott Mann: I will give way one more time, and then I will make some progress.

Huw Merriman: I thank my hon. Friend for securing this debate. Does he agree that, as those of us with coastal constituencies know, there is real anger about this interference? Does he also agree that we need to send a message from this House that we want locally line-caught sea bass back on our menus?

Scott Mann: My hon. Friend makes a very good point. Locally caught sea bass has a premium price. It can be sold in local restaurants, and local businesses can make a profit from it.

I want to point out the madness of the current situation. Recreational sea anglers are members of the public who equip themselves with the tackle and knowledge necessary to access and enjoy public fishery resources. They selectively retain some fish for their own consumption, just as other members of the public enjoy Dartmoor, the New Forest or the Forest of Dean to forage for wild mushrooms, nuts and so on for their personal use. I believe that the EU is preventing our UK anglers from exercising their right—the right of our ancestors—to claim fish for the table, which is very wrong.

11 Feb 2016 : Column 1823

My hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) made an interesting point about tourism, something I want to comment on. The Invest in Fish project, which was funded by the Department for Environment, Food and Rural Affairs, was launched in 2004 and ran until 2007. It was a multi-stakeholder steering group that included fishermen, restaurants, fishing producers, merchants, recreational anglers and a number of other organisations. The objective was to examine ways in which fish stocks might be restored. In the south-west, it covered Bristol, Cornwall, Weymouth and Dorset.

The project involved numerous work packages, one of which was a study of the demographics and economic impacts of recreational sea angling. I will give some of the figures. The south-west has 240,000 recreational anglers, who cumulatively spend £110 million on their pursuit. In addition, some 750,000 days are spent at sea and the visitor spend is about £55 million. Recreational sea angling across the south-west therefore generates a total of £165 million of expenditure on bait, clothes, charter boats, boat ownership, fees, travel and accommodation.

Some places have recreational angling only, and I want to outline the benefits that that has brought. In the USA, the striped bass recreational fishery attracts anglers from all over the world and makes an estimated economic contribution to the country in excess of $2.5 billion. We must learn from the good practice in the USA and elsewhere, which delivers agreed resource sharing by species in line with fishery management advice, the best scientific evidence and economic objectives, as was said earlier.

There are jurisdictions in the British Isles, such as Ireland, that have fishery management policies that operate in favour of the most sustainable forms of bass fishing and the conservation of stocks. Bass has been a recreation-only species since the 1990s in Ireland, as was illustrated by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). That delivers an estimated €71 million to the Irish economy annually and supports 1,200 jobs. The Isle of Man is about to change the legislation covering sea bass to include a ban on all commercial bass fishing within 12 miles of the coast. Changes are happening around the world and we seem a bit slow to keep up.

Many of the fishing ports of north Cornwall used to be utilised regularly for fishing. In Padstow, back in the ’80s and ’90s, many people used to sit around rodding and lining off the pier. We do not tend to see that as much nowadays.

There are huge economic benefits to recreational angling. There are almost 900,000 recreational anglers in the UK and they pump £1.23 billion into the economy. There are almost 11,000 full-time jobs in sea angling alone. The “Sea Angling 2012” report found that the direct expenditure of sea anglers, after deductions, was £831 million. English anglers pay as much into the Treasury as the entire value of English fish landings, but receive no consideration in the reallocation of resources.

Kevin Foster (Torbay) (Con): I congratulate my hon. Friend on securing this debate. Does he agree that we must consider not just the direct value of angling, but the wider impact on the economy? For example, those who come to Torbay for the sea angling will not only stay in a hotel, but buy a scone done in the correct way.

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Scott Mann: I thank my hon. Friend for making that point.

I will give two accounts from different parts of the sector before I wind up. The first is from a tour guide in the west country, who writes:

“About to start the new fishing season with a great deal of concern and trepidation for the future of recreational angling and how it may affect my business. Prior to the new rulings regarding Bass, I had a full diary for the year ahead, due to the uncertainty of our weather patterns in this country, this has proved to be an economic necessity as we lose so many days.

Now I find myself shielding daily emails from booked customers asking if the new rulings will apply to them, and would I consider turning a blind eye to the odd fish for the table as opposed to a cancellation!!!!”

I do not want anglers to be criminalised—that seems ridiculous. He continues:

“I consider myself as indeed are most of my customers to be conservation minded, but find these new rulings to be extremely harsh, especially when you consider that commercial fishing with rod and line and indeed netting will be allowed to continue within my ‘low pressure sector’. It is highly possible that I will be forcing anglers to return a fish right in front of a commercial line drifter”,

which could then keep the fish that has been returned. He went on:

“There is also the wider picture to consider, local cafes, tackle shops, bed and breakfasts”

and all the people who rely on that sector.

TV fisherman and bass guide Henry Gilbey—one of my personal favourite fishermen—stated:

“I am a full time fishing writer and photographer with a ridiculous obsession for bass fishing. I live within walking distance of the sea in south east Cornwall yet I spend more than two months each year in Ireland. Why? Because the bass fishing is better. I run guided bass fishing trips and I need as many photographs of bass fishing as I can get, and I would love to be promoting bass fishing in Cornwall. But I can’t. My local bass fishing isn’t good enough. The fact is that to access really good bass fishing I need to travel away from my home in Cornwall and help promote Ireland as a sport fishing destination. We could have bass fishing like they have in Ireland though…but we don’t. We need more and bigger bass for anglers to catch, and this can only come about via better management of the stocks. Bass are the king of our saltwater species and anglers want to catch them.”

They are simply being denied.

Melanie Onn: Will the hon. Gentleman give way?

Scott Mann: I will not give way because I want to make progress.

To conclude I will quote from John Buchan who said:

“The charm of fishing is that it is the pursuit of what is elusive but attainable, a perpetual series of occasions for hope.”

I do not want to take that hope away from our recreational sea angling community, and I urge the Government to do a few things. First, will they review this decision and reverse the unnecessary catch-and-release policy for recreational sea anglers? Will DEFRA consider making a study of how much benefit rod-and-line angling produces for British tourism industries, and will it consider a complete ban of gillnetting in bass nursery areas? I look forward to hearing the views of other hon. Members, and I hope to sum up the debate at the end.

3.37 pm

Jon Cruddas (Dagenham and Rainham) (Lab): It is a great pleasure to follow the hon. Member for North Cornwall (Scott Mann), who made a brilliant speech, and I congratulate him on securing this debate. I also

11 Feb 2016 : Column 1825

welcome him to the all-party group on angling, which is chaired by the hon. Member for Broxbourne (Mr Walker). I look forward to some pleasant days out.

I am a terrible fisherman, so restraints such as the 42 cm landing size, the one-fish-per-day limit, or the moratorium will not affect me because I do not actually catch anything. However, I have great affection for the recreational angling community, and this is a great opportunity to debate the issue. I do not think we have discussed recreational fishing since December 2014, when the hon. Member for Meon Valley (George Hollingbery) secured an Adjournment debate on bass fishing. After that debate we were optimistic about the future direction of travel of Government policy, but I am afraid we stand here today pretty disappointed about where we have got to.

Angling is one of the highest participant recreational sports across Havering, Barking and Dagenham, and in the country at large. If we joined conversations in recreational angling chatrooms, and talked to people from the Angling Trust and the Bass Anglers Sportfishing Society, we would quickly appreciate the concerns across the country. Anglers are desperate to help to rebuild bass stocks in a fair, efficient and proportionate way, and we were looking forward to making real progress at the December Council of Ministers meeting.

The basic problem now is that the recreational angler feels singled out and that EU fishing Ministers have unfairly targeted them in the new six-month moratorium. That moratorium risks criminalising thousands of law-abiding people, and it will be difficult to enforce without the active support of angling clubs, anglers and the Angling Trust.

Evidence suggests that charter boat bookings are already down, which will impact on tourism revenues and potentially put some operators out of business. Anglers fishing from April to June will have to return all their bass, yet a commercial boat can come alongside and catch and kill the same fish. Ministers have boasted that these supposed conservation measures will have little effect on commercial inshore bass fishing, while also claiming that they have secured a good deal for bass stocks. Those statements cannot both be true. We therefore need to find out what the actual Government position is.

DEFRA’s own “Sea Angling 2012” report shows that there are 884,000 sea anglers in England, who directly pump some £1.23 billion per annum into our economy. As the hon. Member for North Cornwall mentioned, bass are the most popular recreational species, and bass angling is worth some £200 million in England alone. Let us cut to the chase: for the past decade and a half, recreational sea anglers have been led to believe that their most popular sporting fish would be managed sustainably and be acknowledged as a valued recreational species. Why is that? It is because politicians of all parties have told them so.

In 2002, the Prime Minister’s strategy unit commissioned a report on the benefits of recreational sea angling. That report, “Net Benefits”, was eventually published in 2004, and it said:

“Fisheries management policy should recognise that sea angling may…provide a better return on the use of some resources than commercial exploitation.”

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The Environment, Food and Rural Affairs Committee report on “Net Benefits” said:

“We support the re-designation of certain species for recreational use and recognise the benefits that this can bring from both a conservation and economic point of view.”

In the 2014 debate, the hon. Member for Meon Valley, who is now a Minister, concluded his speech by saying this:

“does the Minister agree that the development of sea bass fishing as a recreational activity is the best long-term solution to both the ecological and the economic sustainability of the fishery, as proved by the Irish sea bass experience, the striped bass fishery of the north-east coast of the US and many other examples?”—[Official Report, 3 December 2014; Vol. 589, c. 119WH.]

Today, we ask the same question: what is the Government’s policy? We ask that as the derogations drive policy in the opposite direction to that argued for by the hon. Gentleman and the Government report in 2004.

Do not get me wrong, I am not attempting to make a party political point about this. For example, under the last Labour Government, the then Minister, my right hon. Friend the Member for Exeter (Mr Bradshaw), tried to increase the minimum landing size to 42 cm, but he was replaced by a new Minister who caved in to the commercial lobbying and annulled the statutory instrument that would have delivered this important conservation measure. My right hon. Friend was actively supported in those attempts to introduce that minimum landing size by the then Member for Reading, West, who, sadly, is no longer an MP, even though he is very much active in the Angling Trust and continues to lobby on behalf of recreational anglers.

There is a recurring theme throughout the past 20 years, whereby the ecological case has been consistently put by the recreational side, backed up by Government reports and all-party groups, and this has been accompanied by limited actions of Governments of various persuasions, given pressures from the commercial side. Here we are again today making the same points and trying to give voice to the recreational angling community.

In Ireland, bass has been designated a recreational species since 1990, delivering an estimated €71 million to the Irish economy annually and supporting more than 1,200 jobs. Ireland is also in the EU. The Isle of Man is about to embark on a similar policy. As well as highlighting the ridiculous anomalies with the current situation and the unfair treatment of recreational anglers, this debate today is really about trying to find out the longer-term thinking of the Government, so we do not have to return to this question again and again, whoever is in power.

3.43 pm

Mr Geoffrey Cox (Torridge and West Devon) (Con): I am not a recreational angler, but I have every intention of taking it up. It sounds an immensely enjoyable pastime and one in which all Members of Parliament should partake. I do, however, have an inshore fishing fleet to speak up for, and I have to say that one thing I am depressed about as a result of reading some of the briefings for this debate is the tone that is taken towards decent inshore commercial fishermen. These are men and women who have families to support. They are not large concerns. Having clung to a traditional fishing industry, in places such as Appledore, Bideford and Clovelly, they have found the rug gradually pulled out from under their feet.

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I agree with my hon. Friends and the hon. Member for Dagenham and Rainham (Jon Cruddas). We are dealing here with an insane, illogical, irrational, fatuous policy. It is absolutely crazy that anglers cannot take two or three fish home for the table, when, at the same time, the Minister, my hon. Friend the Member for Camborne and Redruth (George Eustice), has obtained derogations that allow netting to continue. Of course on the face of it, if we take the one, it is strange we do not take the other, but I propose a reason to the House. Ministers know, when negotiating in Brussels with their counterparts in other countries, that if they take away bass from the inshore fishing fleet, they will have nothing left to catch. In the north Devon industry, which I represent, they cannot catch spurdog; there is no cod, plaice or sole; no thornback ray; no blonde ray; and now there is a ban on small-eyed ray, which represents 40% of the take for the northern Devon fishing industry. Fishermen say to me, “What do we catch?”

Maria Caulfield (Lewes) (Con): Does my hon. and learned Friend agree that the ban is pitting the recreational fishermen against the under-10 metre fleet? I and my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) met our Sussex inshore fisheries and conservation authority last week and found out that, as a direct result of the ban on sea bass, there are now restrictions on shellfish.

Mr Cox: I do agree. The policy is crazy, and Ministers know it. They wrestle with their consciences, they feel guilty and they try to push the envelope for the inshore fleet, but they know that the situation is untenable. They know that decent men and women with livelihoods to protect cannot go to sea for more than a few days a year and cannot cover their costs. I sympathise with my hon. Friend the Member for North Cornwall (Scott Mann). Of course the position is crazy. It is an insane policy.

Of course the rod-and-line sea anglers must feel a sense of injustice. It is a direct and perverse consequence of a failed policy. That is the difficulty. How do I go back to Bideford and Appledore and say to my fishermen, “There’s nothing for you to catch”? Catching small-eyed ray, the last thing on which they depended, was banned in December. Why do we think my hon. Friend the Minister came back with derogations for gillnetting? It was because he knew that the small-eyed ray was banned, which meant 40% of the northern Devon fishing industry cut at a slice. Was there any consultation on that ban? No. Was there any warning? No.

The real injustice is the whole failed policy. It is time we got out of it. The people of this country will have the chance to withdraw us from it in just a few months. Then we can have a properly managed fishery in which the rod-and-line men and the sea anglers can be treated properly, and the inshore fleet, on which traditional coastal communities depend, can breathe again when we introduce common sense back into the counsels of our fishing policy.

Huw Irranca-Davies rose

Mr Cox: No, I am not listening to a former Minister who presided over this policy and went cap in hand to Brussels begging for scraps. It is time we took back our fisheries policy. That will bring justice to the people my

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hon. Friend the Member for North Cornwall spoke for and to the decent men and women who have nothing to fish for in the north Devon fishery.

3.49 pm

Mrs Madeleine Moon (Bridgend) (Lab): Oh dear, oh dear, oh dear! What are the Government doing risking Europe’s sea bass for their foolish, unfair, ineffective and fishy decision on sea bass fishing? Members might ask what I am doing here out of my darkened room—it is nothing to do with defence; I do not eat fish; and I am not an angler. Thanks to 40 years of living with an ecologist, however, I know an environmental disaster when I see one.

I have constituents who are sea anglers who came to my surgery and asked me to take an interest in sea bass fishing. Unfortunately for me, I happen to know the former Member for Reading, and when someone knows the former Member for Reading, it is very dangerous to ask him, “What is the issue about sea bass fishing?” because he will tell them.

Huw Irranca-Davies: You shouldn’t have done that!

Mrs Moon: I appreciate the comment from my hon. Friend the Member for Ogmore (Huw Irranca-Davies)—I should never have done it, but my constituents wanted to know, so I wanted to know, and thus I am here today. I am also a Member who has a coastal resort, in which sea bass fishing was a very popular activity, so I started looking at the facts.

Everywhere I looked, it was very clear that there was an urgent need to rebuild bass stocks—and nobody seems to dispute that. It is the core bottom line. It is an environmental and economic imperative, and everybody will agree on that. We know this because in 2014, the International Council for the Exploration of the Seas recommended an 80% cut in bass mortality across the EU area for 2015, following a rise in bass landings from 772 tonnes to 1,004 tonnes. We were taking more out of the sea than was sustainable. The bass stock in the North Atlantic fishery is 527 tonnes—well below the trigger point of concern for the exploration of the seas, which was set at 8,000 tonnes. Future regenerations of sea bass stocks are now in danger.

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rory Stewart): This is just a small point, but I think the hon. Lady meant to say 5,250 tonnes.

Mrs Moon: I thank the Minister for the correction; he is absolutely right.

In December 2015, the EU Fisheries and Agricultural Council met to formulate a package of measures and regulations, but the agreement that was reached was both unfair, ineffective and, quite honestly, unbelievable. The regulation of recreational and commercial bass fishing, which came out of that December meeting, has exposed a rotten relationship between the industry and Government, both in the UK and across the EU.

Antoinette Sandbach: Will the hon. Lady give way?

Mrs Moon: No, I would like to make some progress.

During the run-up to the December meeting, the Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Camborne and

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Redruth (George Eustice) who is responsible for farming, food and the marine environment, was lobbied from all sides, but from everything I have seen and all the evidence sent to me, preference seems to have been given to commercial lobbyists. I am told that recreational anglers were granted a 30-minute telephone conference call with the Minister, whereas commercial lobbyists seem to have been in contact with UK Ministers and officials throughout the negotiations. Members will be aware that if we are going to carry out a consultation, it needs to be open, honest and not biased towards an already decided outcome.

I believe that the initial proposals were well received by all sides, but particularly by recreational anglers. There was to be a complete ban on recreational and commercial fishing, including catch and release, in the first half of 2016; then, in the second half of 2016, a monthly 1-tonne catch limit for vessels targeting sea bass and a one fish per day limit for recreational anglers and the reintroduction of catch and release.

Antoinette Sandbach rose

Mrs Moon: I have already said no.

After lengthy conversations with the commercial sector throughout the negotiation period, EU Fisheries Ministers granted a surprise, namely a four-month exemption for commercial hook-and-line bass gillnet fishing, which accounts for 50% of bass fishing. The strict ban on recreational fishing will remain in place, and the monthly catch limit for commercial vessels has been increased from 1 tonne to 1.3 tonnes. Those outside this place who have never had the joy of seeing a gillnet should be made aware that it leads to the violation of EU fish-size regulations by allowing for the catch of undersized fish, which are then thrown overboard dead. They do not help conserve fish stocks, because the undersized fish—the next generation of fish—are thrown back dead.

I do not usually quote Christopher Booker of The Sunday Telegraph, but I agree with him that the EU is using a

“sledgehammer to miss a nut.”

Yet the regulation is endorsed and supported by this Government.

I may not be an angler, but I know nonsense when I hear it. The EU Fisheries Ministers, in conjunction with UK Ministers, are talking nonsense when they try to spin this fix-up as a considered and environmentally sound policy. They falsely claim that bass gillnet fishing has a minimal environmental impact; that the measures are beneficial both for the commercial fishing sector and for bass stocks; that, because drift netting has been caught by the moratorium, bass stocks will increase; and that drifting accounts for 90% of all bass fishing.

We need to know where the Minister got that 90% statistic from, because it is misleading and contradicts data published by the Government’s own Marine Management Organisation, which in 2014 stated that netting constitutes 62% of all commercial bass catches, with drifting responsible for only 20%.

How can this Government possible justify increasing conservation-damaging gillnetting, yet ban recreational angling? I had thought that the Minister had mistyped the policy and that he in fact intended to ban gillnetting

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and to increase angling, but that was not the case. Recreational angling represents the sustainable future of bass fishing and it should not be banned.

The Centre for Environment, Fisheries and Aquaculture Science—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. I call Charles Walker.

3.57 pm

Mr Charles Walker (Broxbourne) (Con): Thank you for calling me to speak, Madam Deputy Speaker. The Government negotiated a stunningly bad deal. I cannot think of a worse deal that they could have come back with for recreational bass fishermen in this country. It is no good beating around the bush.

I make no apology for enjoying visiting the website of the Art of Fishing in Wadebridge. I have never visited the shop, but I hope that my hon. Friend the Member for North Cornwall (Scott Mann) will send the team my regards when he sees them this or some future weekend.

Why was the Government’s deal so stunningly bad? They have come back and trumpeted a six-month closure. That sounds like pretty good news, until we realise that they have negotiated a four-month derogation for gillnets and hook and liners. Over the next 10 months, each of the boats will be allowed to take up to 1.3 tonnes a month—in other words, 1,300 fish a month, or 13,000 fish a year. Indeed, it is a 1 tonne increase on what they could take last year.

Let us be clear: anglers account for less than 10% of the bass killed and taken out of this country’s waters, yet the value of recreational bass fishing is estimated to be £200 million to the economy, while the figure for bass stocks landed by commercial fishermen is an estimated £7 million.

Mrs Sheryll Murray: Will the hon. Gentleman not acknowledge that, according to the European Commission, recreational sea anglers take 25% of the total stock caught, and that the International Council for the Exploration of the Seas has increased that figure to 30%?

Mr Walker: Only in the strange world of the European Union can a few thousand blokes with fishing rods—well, a hundred thousand-plus blokes—

Melanie Onn: Blokes?

Mr Walker: And ladies—account for 25% or 30% of all the hundreds of thousands, the millions, of bass that are taken. There they are, those recreational anglers, filling up their wheelbarrows and taking them down the high streets of our fishing communities! What a load of rubbish that is. It defies belief that organisations that pretend to be serious expect us to swallow such utter nonsense.

Let us be clear about this. The value of a bass on the dock is about £3.50. The value of that same bass to recreational angling is about £100. It is worth 28 times more to recreational anglers than it is dead on the slab, going to market.

Jim Shannon (Strangford) (DUP): The hon. Gentleman is making a very good case for getting out of Europe. Does he feel, as I do, and as many other Members in the Chamber do, that it is about time we had control of our

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fishing grounds around the shores and in the seas of the United Kingdom of Great Britain and Northern Ireland? We make the decisions, and let us do it ourselves.

Mr Walker: Of course I agree that we should have control of our fishing grounds, which is why I shall be voting to leave the European Union, but that is an argument for another time. I do not want to stand here and attack commercial fishermen who fish for bass, because I think that there is a golden opportunity here. As was pointed out by my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), there are very few fish left in the sea for inshore commercial fishermen to target.

Oliver Colvile: I thank my hon. Friend—my very good hon. Friend, whom I have known for many years—for giving way. Do we not need to ensure that a bass stock is available? That is key, because if there are no bass, there will be nothing for anyone to fish for.

Mr Walker: My hon. Friend has made an excellent point, although I do not think that the proposals that were negotiated, or agreed to, by the Government take us any nearer to that stage.

As I was saying, there are very few fish left in the sea for inshore commercial fishermen to target, and once they have finished with the bass, there will be nothing left. So here is the opportunity: let us create a recreational bass fishery that is the envy of the western world. In 1984, it was decided in the United States, on the east-coast Atlantic seaboard, that the inshore striped bass fishery would be recreational only. That fishery is now worth $2.5 billion to the economy, as people from around the world travel there, booking charters and staying in hotels in order to go out and catch those wonderful fish.

This is the opportunity that remains open to our coastal communities. As my hon. Friend the Member for North Cornwall said, it has been seized in Ireland, and that recreational fishery is now worth £71 million a year to the entire Irish economy.

Mr Cox: Does my hon. Friend agree that the fishing tackle industry, and the supply of fishing tackle, are vital to all these crucial areas? May I commend to him the Summerlands fishing tackle shop in Westward Ho!? It is a superb exponent of that particular art, and I hope that he will go and see it and buy something from it.

Mr Walker: I think that, during his speech, my hon. and learned Friend unwittingly invited my hon. Friend the Member for North Cornwall and me to join him for a bit of fishing. We shall be able to introduce him to the delights of recreational angling, and that fishing shop will be the first place that we visit after breakfast, at 9.30 in the morning.

But I want to be serious about this. There is a huge opportunity here. As I have said, the value of recreational fishing—bass fishing—to the Republic of Ireland’s economy is £71 million. The value of the entire commercial catch of bass in this country is £7 million. I put to my hon. Friends representing fishing communities that the real prize, the real money and the real future for their inshore commercial bass fishermen is being at the forefront of creating recreational fisheries. There is a laboratory—a live case study. We can forget Ireland and the USA because they are established and thriving. The Isle of

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Man has decided to pursue that route to create jobs for charter captains and fishing guides, and jobs in hotels and restaurants. That is the opportunity that presents itself.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): On the words expressed earlier about the Europe and the CFP, does the hon. Gentleman find it remiss of the Prime Minister that he did not prioritise fisheries in any part of his negotiations with Europe?

Mr Walker: I wish the Prime Minister would be more bullish when he comes to defend fishing interests. I remember fishing with the hon. Gentleman in Shetland. He was sitting on the side of a beautiful loch as it neared midnight on about 8 July. He said, “Charles, why are you using a fly and not a worm?” I leave him to justify his position in that matter with his own constituents.

Let us not make this a row between recreational fishermen and inshore fishermen, who have also had a pretty rough deal. Without threatening jobs, could we start to think collectively about creating a new opportunity for what remains of our inshore fleet to thrive and prosper, and about having a sustainable fishery and not one that is here today, gone tomorrow? As my hon. and learned Friend the Member for Torridge and West Devon made clear, many fisheries around his coast have been here today and gone tomorrow, and they are now in the last chance saloon.

I have spoken for longer than I thought I would, and I took a couple of interventions, which I greatly enjoyed, but be in no doubt that the Government will continue to be harried and harassed on this matter, because there is no other word to describe their dealings in the European Union but failure.

4.7 pm

Mrs Sheryll Murray (South East Cornwall) (Con): I congratulate my hon. Friend the Member for North Cornwall (Scott Mann) and thank the Backbench Business Committee for the debate.

Bass tastes great served at a dinner party or a simple supper. My mother had a very special way of cooking bass that was caught with a rod and line at Queener Point off Rame Head near my home. Bass has always been a highly prized fish. Some people dream of winning the lottery. My late husband Neil—my late, fantastic commercial fisherman—dreamt of catching a bag of bass.

I am here to talk about all fishermen, not just recreational sea anglers and not just commercial men. In addition to recreational sea anglers, two other groups are affected by such terrible measures: trip boats that work out of Looe and Polperro, taking groups of anglers out to sea with fish with rods and lines; and commercial fishermen who trawl or net for a living. Recreational sea anglers spend their leisure time fishing for hours, and it is only right that, when they get a bite and reel in their catch of bass, they can take it home for their supper. Recreational fishing is a very popular pastime for locals and visitors alike. Contrary to what my hon. Friend the Member for Broxbourne (Mr Walker) said, it is estimated that landings of recreational bass account for about 25% of the total. I have heard that the European Commission is challenging the UK because it is not recording the landings of bass in a reasonable way.

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Cornish mackerel handline vessels often use charter trips as a way of ensuring that they have an economically sustainable business. Commercial vessels from the south-west rely on bass in the winter months. To presume that they can make up the economic loss with other species shows a complete lack of understanding of the commercial fishing industry and its seasonal nature. It is essential to have joined-up fisheries management for all fishermen, and restrictions must look at the socioeconomic impact on coastal communities. Recreational fishermen provide support for tourism, and commercial vessels provide support for harbour repairs and local infrastructure.

In 2006, the Labour Government announced that the minimum landing size for bass would be increased from 36 cm to 45 cm. This was to apply only to UK vessels operating within the 12-mile limit. Labour reconsidered, however, and announced in October 2007 that the minimum landing size for bass would remain at 36 cm. The December 2014 Fisheries Council could not agree on bass conservation measures. The Angling Trust expressed its disappointment and called for domestic measures in UK waters, including raising the minimum landing size to 45 cm, strengthening the UK’s network of bass nursery areas, moving away from netting towards line-caught methods and limiting the catch per commercial boat. There was no mention of bag limits, I hasten to add. The Angling Trust should be careful what it wishes for when the European Commission is involved.

I am sure that the UK’s request for emergency measures on 19 December 2014 was made for genuine reasons, and all fishermen accepted that some conservation measures were necessary. Those emergency measures included a three-fish bag limit for anglers, and 18 kg a day limit for demersal boats—which was workable—and a ban on mid-water trawls until the end of April, which was accepted because that was the time at which the fish were spawning. In September 2015, the minimum landing size was increased to 42 cm, which was a sensible conservation measure. The International Council for the Exploration of the Sea published advice on 30 June 2015, before an assessment of those emergency measures. Its paper acknowledges that there were uncertainties in the assessment due to inaccuracies in historical landings.

To maintain a sustainable fishing industry—I include recreational sea angling in that description—I propose that in the short term our Minister immediately asks the European Commission to revert to those emergency measures, so that we can make a real assessment of the bass stock. I also propose that the bycatch for demersal trawlers should be increased from 1% to a workable 5%, because discarded bass do not survive. What is the point of throwing this stock back into the sea dead when it is not covered by the European landing obligation? Discarded bass would have a very low survival rate.

Mr Charles Walker: Does my hon. Friend agree that the great advantage of commercial hook-and-line fishing is that there is a greater chance of returning undersized bass or bass over a certain size that we might want to release for breeding?

Mrs Murray: I completely agree with my hon. Friend, but my point is that some commercial vessels rely on catches of bass and it is too costly for them suddenly to

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change their gear. Believe you me, I know about this because I spent 24 and a half years married to one such fisherman. Preventing drift netters from bass fishing is vindictive. They cannot catch any other species during their seasonal fishing, although they could of course simply add weights to their nets, fix them to the seabed and carry on.

Maria Caulfield: I completely agree with my hon. Friend on that point. There are fishermen in Newhaven in my constituency who invested in new nets just before Christmas. Because there was no notice of the ban, they had no way of planning for it, and this has decimated the fishing industry in Newhaven.

Mrs Murray: I could not agree more with my hon. Friend. I have seen how the industry and fishermen are affected by changes to the rules, and to introduce such a measure so quickly when it costs a lot of money to invest in gear is simply nonsensical.

I acknowledge that the Minister may need to ask the Minister of State, Department for Environment, Food and Rural Affairs to write to me on this matter, but will he please reveal why the ban on drift netting was not announced until after the Council meeting, and not at the end of the debrief with the industry? I am sure he did not intend to allow fishing representatives to believe that all static net fishing had an exemption.

This is a clear example of how the common fisheries policy has destroyed fishermen. The draconian CFP has caused fishermen from Looe and elsewhere to fish alongside French boats in the south-west 12-mile limit, and see those boats land about 10 times more haddock. Our fishermen have sent me images of their charts showing French fishing vessels inside our six-mile limit, while their path and speed suggests that they were actually fishing. To take this forward to prosecution under the CFP, the UK would need evidence of the gear in the water or confirmation from the fishery protection vessel.

I understand that the 2016 herring quota has been exhausted already and we are only in February. Sprat and Cornish pilchard boats cannot avoid catching herring and they are subject to the pelagic landing obligation. Will the Minister meet me and my hon. Friend the Member for Totnes (Dr Wollaston) to talk about that, because it is really important to our fishing industry?

Enough is enough. Fishermen are fed up. The UK has to get control of our 200-mile median line, so that our Fisheries Minister is able to make the rules without going cap in hand to the European Commission.

Several hon. Members rose

Madam Deputy Speaker (Mrs Eleanor Laing): I have to reduce the time limit to five minutes, because we are running out of time.

4.16 pm

Huw Irranca-Davies (Ogmore) (Lab): I will try to be quick so that others can speak, Madam Deputy Speaker. I hope Members will understand if I do not take interventions. I have been tempted into making some points. There have been some very good speeches by Members who know a lot more about the fishing industry than I do, but my opening point is that the Europe issue is a red herring.