Equitable Life

Debate between Lord Herbert of South Downs and Cheryl Gillan

Thursday 26th February 2015 Commons Chamber

[Nick Herbert (Arundel and South Downs) (Con)]

I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on securing this debate. I was pleased to support his application for a debate in Back-Bench time because of the importance of this issue to a large number of my constituents who, as Equitable Life policyholders, have suffered loss. They remain gravely concerned that, although in many cases they have been partially compensated for their loss, they have not been fully compensated or compensated at a level that they believe to be just. It is important to restate, as many hon. Members have done, that these are responsible individuals who invested and saved in good faith and with a reasonable expectation of a fair return. They have not in any sense behaved irresponsibly, and did not seek to make investment decisions that had an expectation of an element of risk. They found themselves suffering significant losses, many of which have resulted in hardship, through no fault of their own.

I wish to raise two points in addition to the excellent points raised by my hon. Friend and others. First is the issue of accountability. Regulatory failure was identified in the ombudsman’s report, and that single fact informs us all in this debate that there was maladministration. How is that regulatory failure to be dealt with, and how will future regulatory failure be prevented, if those who are responsible for that failure—ultimately in this case, the Government of the day—can evade liability for that failure? This is, of course, a matter of justice, as my hon. Friend the Member for Richmond Park (Zac Goldsmith) said, but it is also a matter of good governance and accountability, because when institutions for which the Government are responsible fail, the Government must accept responsibility.

The Government were, of course, obliged to step in when bailing out other financial institutions, because a risk to the economy would have arisen had they not done so. Nevertheless, for individual policyholders of Equitable Life there seems to be an unfairness, because while those who may have been depositors or shareholders in banks will receive compensation and redress, those who have saved in good faith but relied on the effective regulation of the vehicle in which they were investing are not receiving full compensation, and that cannot be right.

My second point is about reasonable expectation. It is not as if these policyholders have been told that they do not have a case; it is not as if we are coming to the House to plead, once again, on the issue of principle. The issue of principle has been addressed and settled. The ombudsman has said that there was maladministration, and the Government have accepted the issue of principle because of the level of compensation they provided.

We have the ombudsman’s report and the Conservative party manifesto that pledged compensation. I recognise that this Government set up the compensation scheme, and that they had to address the fiscal environment responsibly. Nevertheless, it remains a continuing source of concern that such a small proportion of many of my constituents’ losses have been addressed, and that they have complete uncertainty about whether there will be further compensation in future. Nobody turns around to my constituents and says, “We will not do this any more”, and they are left with the uncomfortable sense that it would be very convenient if they simply went away or, in many cases, actually died. Thousands of policyholders have died in the wait for compensation, and we have no finality to the situation. Given the reasonable expectation that was set up, the manifesto promise and the ombudsman’s report, it is entirely reasonable to ask on behalf of our constituents whether we can have a timetabled scheme to say, “We will bring closure to this matter.”

I am happy to stand up and say that that closure may not be for 100% of the losses accrued. Many of my constituents might disagree with that, but we must have regard to the fact that there is a continuing deficit and will be for the next three years, and that there are other spending priorities. Nevertheless, it seems that compensation of only 22%, and the ongoing uncertainty of whether there will be any further compensation at all, is deeply unsatisfactory.

[Mrs Gillan]

Does my right hon. Friend agree with my constituent who e-mailed me and stated:

“If we were to receive this money it would not be lost. I am sure it would soon find its way into the economy at large and would not languish in savings accounts because we’ve done the saving already!”?

[Nick Herbert]

My right hon. Friend’s constituent makes a good point and it is true that the compensation that the banks have had to pay, for example in relation to mis-selling payment protection insurance, has had a beneficial effect on the economy by putting cash into people’s hands, but that is by the bye. As many have said, this is a matter of justice, but also of accountability and good governance. We cannot allow a situation where the regulation of an institution such as Equitable Life fails and no one will step up to the plate and say, “We accept responsibility for that failure” even though thousands of people have been hurt by it. That is the long and short of the story. The Government have a duty. They had to balance the interests of taxpayers fairly, but there is a strong feeling in the House, and among many of my constituents, that more must be done.

Growth and Infrastructure Bill

Debate between Lord Herbert of South Downs and Cheryl Gillan

Monday 5th November 2012 Commons Chamber

[Nick Herbert]

My hon. Friend puts his finger precisely on the right point. If that balance were not achieved properly, it would be possible to come up with huge projected levels of housing in the areas I represent, because there is an almost infinite demand for housing from people wishing to come and live in West Sussex. Unless that balance is achieved, there will not be a sustainable level of housing provision in the local area.

The Bill rightly focuses on the need to secure national infrastructure, and on the importance of speeding up decisions so that that can be achieved. I strongly support that, but I want to talk about the related issue of the levels of local infrastructure necessary to support housing development. I represent a rural constituency with no large towns; it has only villages, small towns and countryside—and important countryside, at that. It already has problems with congested roads and, in some villages, of over-subscribed local schools, although I am pleased to say that the latter issue is partly being addressed by the Government’s policy of allowing free schools to be set up.

Worst of all, however, is the problem of sewage. The levels of development in some villages have not been matched by adequate sewerage provision. When combined with the lack of an adequate water supply in the area, that can result in sewage flowing though people’s gardens after not particularly heavy rainfall. There is inadequate local infrastructure to support the present level of housing provision in those villages. What are we going to do to ensure that proper levels of infrastructure are put in place to support the necessary additional development?

There is a general acceptance in the communities I represent that additional housing is needed. There is a lack of affordable housing in the villages, and people recognise that some additional housing will be necessary. The question is whether it will be provided on a sustainable basis with proper provision for the infrastructure necessary to support it. I want to ensure that the provisions in the Bill will continue to allow funding for such infrastructure provision, so that the appropriate level of development can go ahead.

A further issue relating to infrastructure is that of broadband. West Sussex is a rural county that is relatively close to London—my constituency is only 50 miles away—and it is surprising that it should contain three of the four “not-spot” areas in the country, in which broadband can barely be obtained at all. One of them is in my constituency, where broadband provision is already very poor. I therefore strongly welcome the Government’s measures to secure a reasonable level of broadband speed and 100% coverage across the country, followed by a high level of provision of superfast broadband. Such provision will be essential if we wish to foster local economic growth and the levels of infrastructure provision that businesses require in today’s connected world.

Such broadband provision is no less important in national parks. The outstanding landscape of the South Downs national park is in my constituency, and the communities in the park will also require high-speed broadband. Farmers who wish to diversify, for example, do not want to be disadvantaged, and the local economy will not be sustainable unless such broadband provision is secured. Last year, I raised the issue of a local farmer who was paying huge sums of money for broadband provision, which was creating an impediment to the successful diversification of his farm enterprise. I therefore welcome the proposals to improve broadband provision.

I am concerned about the provision in clause 7 that will override the key purpose of a national park to conserve beauty, and I would like to hear more from the Government about that. I need to understand more about the practical effects of that provision, and about the precedent that it will set. I need to be persuaded that it will not damage the landscape, which it is so important to preserve, although I of course see the importance of securing improved broadband provision.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

I support my right hon. Friend’s remarks. My constituency contains areas of outstanding natural beauty, and the provision could be interpreted as undermining the protections that are at present afforded to his and my constituencies. Will he join me in asking the Government to look at the measure carefully, to ensure that it does not set a precedent for other projects?

[Nick Herbert]

I am grateful for my right hon. Friend’s remarks. She expressed herself in the same way as I have sought to express myself—by seeking reassurance that these provisions will not damage the landscape. The whole purpose of these high landscape designations, whether they be areas of outstanding natural beauty or national parks, is that they ensure a level of protection that cannot be overridden. That is their very purpose, so we need to be careful before legislating for any provision that might then set a precedent for further erosion of such protection in future. I simply say that we need to be careful and that I need to be persuaded of the benefits of these measures.

My final point is about the role of the planning system in relation to growth. There is a simple fact here—that we have had high levels of growth with the existing planning system in this country under Governments of both persuasions over the course of the last few decades. The planning system is not in itself necessarily an impediment to growth, and the lack of growth cannot be laid at the door of the planning system. Nevertheless, in an increasingly competitive world—despite the fact that we can observe Britain’s projected growth as being higher than that of our European partners and approaching that of the United States—we need to compete with the best. That means that any blockage on the speed of planning decisions needs to be removed. I welcome Lord Heseltine’s review to that effect. He said that it was not about undermining the principles of the planning system; it was about ensuring that it works more speedily. That is what I suggest we need to focus on—policy clarity and speeding up decisions, not undermining the process in its entirety.