Equitable Life

Antoinette Sandbach Excerpts

Thursday 11th February 2016 Commons Chamber

[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 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 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—]