Northern Rock

Debate between Lord Beith and Mark Hoban

Monday 21st November 2011 Commons Chamber

[Mr Hoban]

There is a good deal for the foundation. There was no obligation on Virgin Money to continue the deal beyond 2012, but it has agreed to extend it to 2013, and it wants to ensure that Virgin Money Giving works with the foundation to enable it to continue its work. One of the challenges for the hon. Gentleman and his colleagues from the north-east is to work with Virgin Money and to persuade it of the merits of continuing to fund the foundation.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

My constituents who have worked for Northern Rock, and people throughout the north-east who care about the new institution having its headquarters there, will be astonished at Labour’s opposition to the deal, as it is designed to give a future to a bank that failed on Labour’s watch, when guarantees were not worth the paper they were written on.

[Mr Hoban]

My right hon. Friend makes an important point. As someone who was born and brought up in the north-east, I understand how important Northern Rock is to the fabric of the region, and how important it is as an employer and as a sign of prosperity. That is why I was keen to ensure that we got a good deal, not only for the taxpayer but for Northern Rock and the north-east. I am disappointed that so few voices from the Labour Benches have spoken up in support of what is a good deal for Northern Rock and its employees.

Equitable Life (Payments) Bill

Debate between Lord Beith and Mark Hoban

Wednesday 10th November 2010 Commons Chamber

[Mr Hoban]

My hon. Friend makes an important point. There are two aspects to it. First, in respect of Equitable Life, the speed with which we have acted demonstrates our commitment to a resolution of the problem. The second is a forward-looking and prospective issue, which is why we have brought forward proposals to improve the regulation of retail financial services through the establishment of the new Consumer Protection and Markets Authority. That will be a boost to regulation and give confidence to savers that the market will be better regulated. It is important, and we have introduced measures recently, to ensure that if anything goes wrong, there is a proper process in place to tackle that.

I was commenting on the scheme appeals mechanism, which will be published before the scheme begins making payments and will be made available for parliamentary scrutiny. If a policyholder believes that the rules of the scheme have been incorrectly applied to their data, they will be able to raise a query with the delivery body, stating the nature of their concern. The query will be pursued by the delivery body.

If there is merit in the challenge and it is upheld, a recalculation will take place. If the challenge is not agreed by the delivery body, the policyholder will have the option of taking their case to the review panel. The review panel will consider the case in full and be able to make a fresh decision based on the facts of the case. It will be independent of the original decision-making process. If a complainant’s case is upheld, the review panel will ensure that a recalculation is carried out. If the complainant remains unhappy with the review panel’s decision, they will be able to challenge that decision in court by way of judicial review.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

My hon. Friend referred to cases in which the rules of the scheme might not have been correctly applied, but such are the complexities of Equitable Life policyholders—for example, a constituent of mine whose policies were additional voluntary contributions in a pension scheme which has been wound up—that someone might wish to argue that their particular type of case had not been envisaged in the way the rules were formulated, and that a specific decision needed to be made in that case. Will the scheme be wide enough to make that possible?

[Mr Hoban]

My right hon. Friend makes an important point. I would expect the payments commission to design a payments scheme that would be sufficiently comprehensive to ensure that all groups of policyholders were covered by it, so any appeal would be on the basis only of any data used to calculate the losses, rather than an appeal in principle against the design of the scheme. I will bear in mind the point that my right hon. Friend makes and encourage the commission, when it takes representations from people, to think as widely as possible about the different groups of policyholders that need to be taken into account.

--- Later in debate ---

[Mr Hoban]

I thank my right hon. Friend. When designing the scheme, we considered seriously how to ensure that policyholders would benefit as much as possible from the payments. If we had been less generous, we would have been accused of clawing back money through the back door, and that is an impression that we want to dispel.

[Sir Alan Beith]

I welcome that announcement, but there is a group of people who are affected in multiple ways: those who have funds in Equitable Life that are not yet in payment and who have been given transfer values substantially below what they believe the fund to be worth, even now. If they are waiting up to three years, and take the money out, accepting the transfer penalty, will they invalidate their entitlement under the scheme?

[Mr Hoban]

That is an important point. I am sure that a range of issues will emerge as we move through the scheme’s design to payment. People who have had Equitable Life policies throughout the period and bought them post-September 1992 will receive compensation even if they have exited from Equitable Life’s current arrangements. I hope that that provides clarification.