Oral Answers to Questions

Bob Blackman Excerpts

Tuesday 7th June 2016 Commons Chamber

[Mr Osborne]

The first thing I would say is that there were those remarkable figures recently showing that 25% of UK electricity generation is now from renewable energy. That is second only to Germany and is an amazing transformation in our energy supply under this Conservative leadership. Secondly, we need to renew the next generation of nuclear power stations, starting with Hinkley Point, but the deal we have signed makes sure that taxpayers are not exposed to the construction risk.

[Bob Blackman (Harrow East) (Con)]

T6. I note that the Government will publish a report on the progress of payments to Equitable Life policyholders who are victims of the great scam, and I congratulate the Government on the progress that has been made to compensate those individuals. Will my right hon. Friend undertake to review the amount of money paid to victims of the scam so that we can fulfil the debt of honour that we owe them?

[The Economic Secretary to the Treasury (Harriett Baldwin)]

I can announce that although the Equitable Life payment scheme is now closed to new claims, payments being made under the scheme to with-profit annuitants are not only tax free but will continue for the life of the relevant annuity.

Budget Resolutions and Economic Situation

Bob Blackman Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

It is a pleasure and an honour to follow the hon. Member for Walthamstow (Stella Creasy). As a graduate in physics and maths from the University of Liverpool, I both congratulate and condemn her on managing to get both Stephen Hawking and Wayne Rooney into the same speech.

I want to send my condolences to the families of the victims in Brussels. I was in Brussels shortly after the Paris attacks and the degree of security being implemented demonstrated that the authorities were already on high alert. It is clearly a devastating tragedy.

The events of the past few days seem to have over-shadowed a remarkably good Budget from the Chancellor. Reducing business taxes to promote growth to enable people to have the dignity of earning a living, rather than a life on benefits, should be applauded on both sides of the Chamber, not condemned. I trust that that will be the Government’s focus over the next four years.

London has done particularly well out of the Budget, but I have not heard many details mentioned in the Chamber. The Chancellor has invested £80 million in Crossrail 2, which will be this country’s single biggest transport operation outside HS2 and something that we clearly need to get on with. I am looking forward to Crossrail 2 enhancing north-west London and my constituency in particular. It will be excellent for everyone involved in transport across London. Transferring business rates powers to the Mayor of London and London councils is remarkably important and will mean that the transport projects that London desperately needs will be funded by the business rates paid by London’s businesses, with that money being appropriately retained. Kick-starting the redevelopment of Old Oak Common will be central to the generation of new homes, new jobs and new businesses and a much better transport infrastructure for London.

Combating rough sleeping across the country is important. Ensuring that people do not experience a second night out is vital, particularly in London. I ask the Chief Secretary to the Treasury, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), to make it clear when he replies to the debate how much of the money will go to London, because London has the biggest homelessness problem and we all want to see it combated. I recently visited FirmFoundation in my constituency, which does a brilliant job of dealing with single homeless men, but it needs additional resources to assist such men and to enable them to get back into a proper home and get their lives back together again. It desperately wants to know how it can apply for the extra money being made available, so I trust that we will hear more details later.

In contrast to my hon. Friend the Member for Bedford (Richard Fuller), I applaud the Chancellor for introducing the sugar tax. Given that behaviours can be driven by taxation, something of which I strongly approve, the Chancellor has missed an opportunity. I welcome the increase in tobacco duty, particularly on rolling tobacco, to encourage people to give up smoking. However, given that the Chancellor has said that the sugar tax will be spent on things to encourage a reduction in obesity, let us drive behaviour by adding additional duties. Just a penny increase on every cigarette smoked in this country would raise £500 million, which could be invested in initiatives such as encouraging people to give up smoking or, even better, not to start in the first place.

The other issue that I want to mention is something that is not going to go away: seeking justice for Equitable Life policyholders. I had hoped that we would hear something in the Budget about further compensation for both the pre-1992 trapped annuitants and the people who have not received compensation thus far. Let me put the Chancellor on notice that we will continue our campaign until we get justice for those who suffered as a result of that terrible scandal.

Budget Changes

Bob Blackman Excerpts

Monday 21st March 2016 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

Does my hon. Friend agree that the best way to reduce the welfare bill is to create more jobs and to give people the opportunity to have the dignity of earning their own living, rather than being stuck in a life on benefits?

[Mr Gauke]

My hon. Friend is absolutely right, and that is why all of us in the House should be delighted that we have record numbers of people in work.

Equitable Life

Bob Blackman Excerpts

Thursday 11th February 2016 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

I beg to move,

That this House congratulates the Government on providing a scheme to compensate victims of the Equitable Life scandal; welcomes the Government’s acceptance of the Parliamentary Ombudsman’s findings in full; notes that the Parliamentary Ombudsman recommended that policyholders should be put back in the position they would have been in had maladministration not occurred; further notes that most victims have only received partial compensation compared to the confirmed losses and that the compensation scheme is now closed to new applicants; and calls on the Government to ensure that the entire existing budget allocated for compensation to date is paid to eligible policyholders and to make a further commitment to provide full compensation for relative losses to all victims of this scandal.

I draw Members’ attention to the fact that I am the co-chairman of the all-party parliamentary group for justice for Equitable Life policyholders. I share that honour with the hon. Member for Leeds North East (Fabian Hamilton), who regrettably has to be in another debate, otherwise he would have been here. I hope that he will be able to get here and put his point of view before we conclude. The all-party parliamentary group is one of the largest groups in Parliament, if not the largest group, with 195 members drawn from all political parties.

When I was elected in May 2010, I signed only a limited number of pledges. One that I was very happy to sign, having investigated the matter fully, was a pledge to seek justice for Equitable Life policyholders. There is no doubt that this has been an outrageous scandal in respect of the length of time it has lasted and the repeated failure of Governments of all persuasions adequately to compensate people who were the victims of a scam. These were hard-working people who invested their life savings in a pension scheme that they believed was secure.

We all know that when one invests on the stock market or in such schemes, the market can go up or down. The difference between this scam and other such schemes is that Equitable Life went round inducing people to put their life savings into it, promising huge bonuses and payouts. It swept up enormous amounts of money and numbers of people who thought that it was a great scheme. In reality, the scheme could not finance itself. It could never meet the commitments that it had made. That was very dangerous, but the regulator knew that it was going on, as did the Government and the Treasury. They conspired to prevent it becoming public knowledge so that people carried on investing their money and losing money.

To make matters worse, it took not only court action, but the Parliamentary and Health Service Ombudsman to bring to the attention of the public that this was maladministration of the worst kind. The last parliamentary ombudsman made it clear in her excellent report that Equitable Life policyholders who had suffered a relative loss should be put back in the position they would have been in had they not suffered as a result of this scam. I seek to ensure in this Parliament, as we did in the last, that all Equitable Life policyholders are given the compensation they are due.

[Sir Edward Leigh (Gainsborough) (Con)]

After all the debates, the truth is that 95% of Equitable Life with-profits policyholders have received just 22% of their relative losses. That is the bottom line, is it not? The Government have a responsibility, given the maladministration that clearly happened, to help the many elderly people who have faced such appalling losses.

[Bob Blackman]

I thank my hon. Friend for that clear statement.

There are three sets of policyholders: the pre-1992 trapped annuitants, who were to get not a single penny under the compensation scheme; the with-profits annuitants, who were to get 100% compensation; and the pension holders, who got 22.4% of their relative losses, as my hon. Friend said. The coalition Government set up a compensation scheme, which I was pleased to support. However, it is a scandal that if someone purchased their policy on 31 August 1992, they got nothing, but if they purchased it on 1 September 1992, they got 100%. The rationale was that if the pre-1992 trapped annuitants had looked at the regulated accounts, they could have seen that there was a problem and that it was a scam. The reality is that when people sign up to such schemes, they do not expect to have to do that. I applaud the Government for taking steps, following the legislation, to partly compensate the pre-1992 trapped annuitants.

[Robert Neill (Bromley and Chislehurst) (Con)]

My hon. Friend has done great work with the other members of the all-party parliamentary group. I apologise, Madam Deputy Speaker, for the fact that, as you know, for a number of reasons I will not be able to stay for the whole debate. Many of my constituents were victims of this scam. Does he agree that when there has been a failure of regulation, as there was in this case, the Government essentially stand behind the regulator, so the moral responsibility ultimately falls on the Government, regardless of party? Although the coalition did something, the financial constraints that enabled it to argue that it was not able to do as much as we would have wished at that time are beginning to ease. Do not decency, honesty and equity demand that we revisit the amount of compensation that is due to these people, who saved and did the right thing, and who, frankly, have been let down by Government agencies as much as by Equitable Life?

[Bob Blackman]

I thank my hon. Friend for that clear conclusion.

The Government allocated £1.5 billion of compensation to policyholders who had lost money. Some £45 million was then promised and delivered to the pre-1992 trapped annuitants. The Chancellor accepted at the Dispatch Box in November 2010 that the total loss was some £4.1 billion, so the shortfall in compensation is £2.6 billion.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I congratulate the hon. Gentleman on bringing this issue forward for debate in the Chamber. I am sure that, like me, he has received representations from elderly decent people who have done the right thing throughout their life and who invested in Equitable Life in order, they thought, that they had a secure pension in the long term. The Government need to foster a savings culture and promote pensions. Does he not think that the failure to compensate people in full for what they did responsibly and in good faith risks undermining the culture that we need to develop for the future of this country?

[Bob Blackman]

When people make an investment decision, they understand that the market can go up or down. What made this scheme different from other investment choices was that it was a scam, and we should recognise it as such. It was a scandal. There is a moral duty, as hon. Members have said, on the Government to provide full compensation.

What has changed is that the Government set a time limit for the submission of new applications for compensation and said that they had to be in by 31 December 2015. Therefore, we now know the total number of people who are due compensation and can look at how the compensation scheme is operating. I have no doubt that the Minister will outline the progress that has been made in compensating individual policyholders.

I want to draw attention to two elements. A contingency fund of £100 million was deliberately set aside because, at that time, it was not known how many policyholders would need to be compensated. Also, because it has not been possible to trace a large number of policyholders—I think it is about 110,000—there has been an underspend of some £39 million. My first ask of the Minister is that that £139 million goes to the people who have suffered loss. That would not cost the Treasury anything because it has already allocated that money.

[Rachael Maskell (York Central) (Lab/Co-op)]

I thank the hon. Gentleman for securing this debate. This is an important matter for my constituents, particularly those who worked at the carriage works in York, which has closed, many of whom have suffered from mesothelioma. For some of them, it is too late. Is not expediency an important criterion for the Government to consider so that the survivors have the opportunity to receive compensation?

[Bob Blackman]

I thank the hon. Lady for that intervention.

Because of the different categories of policyholder, the pre-1992 trapped annuitants—of which 9,000 are still alive—have a minimum age of 88, and most are in their late 80s or early 90s. They are coming to the end of their lives, and it is right that they should seek and receive compensation. It is wrong and reprehensible that some of those individuals who invested their money have had to exist on pension credit, when they expected to have a proper pension scheme. Those 9,000 people should receive the £100 million contingency fund, which would lead roughly—I will leave the Minister to consider the detail—to an average of about £12,000 compensation each. That would be a dramatic change for those individuals who are coming to the end of their lives.

[Julie Cooper (Burnley) (Lab)]

I thank the hon. Gentleman for securing this important debate on a matter that affects a number of my constituents. The Government have cited affordability constraints as a reason for not bridging the gap and providing full compensation. Given that we are now in 2016, and the Chancellor constantly tells us that the economy is in a far stronger position, should we urge him to look again at the issue, so that those who have been so badly affected and who have worked all their lives and invested in a prudent fashion, should be compensated?

[Bob Blackman]

I agree wholeheartedly with the hon. Lady. We now know how many victims there are, and what the payouts have been. For with-profit annuitants, 38,135 victims have received £336 million, and those payments will continue over the next few years. However, 890,472 victims have received only 22.4%, and it has been difficult for members of the scheme to understand the basis on which that has been delivered. As has been mentioned, the Government said that they could not afford all that money to pay people out, but people who are in that position will need compensation over several years. They do not need all the money to be put into the scheme upfront; they need it to be spread over a number of years while they are pensioners. As the economy recovers, the Government should supply additional funds, as the Treasury can afford it, to top up the scheme and ensure that those who suffered relative loss receive the full compensation package due.

[Mr Charles Walker (Broxbourne) (Con)]

My hon. Friend mentions the hundreds of thousands of people who are waiting for full compensation. How much additional money does he feel that the Government will have to come up with over that compensation period?

[Bob Blackman]

We must find a further £2.6 billion to meet the commitment that all of us signed up to. Those of us who made that pledge said that we wanted full and fair compensation, and the Chancellor made it clear at the Dispatch Box that that was the figure, although he was only able to come up with £1.5 billion at the time. The shortfall is now £2.6 billion. I could go through a whole list of other things that the Chancellor has found money for but that have perhaps less merit than the plight of those elderly people who invested their money.

I do not expect the Minister suddenly to say, “Don’t worry, we’re going to provide all the money. Here it is”—it would be good if he did—but the Chancellor will be at the Dispatch Box on 16 March to deliver the Budget, and I hope that he will announce further compensation for the pre-1992 trapped annuitants so that they receive full compensation. I also hope he will confirm that none of the money that has already been pledged will be clawed back at the end of the scheme, and that further moneys will be made available as and when that is allowed in the Treasury forecast.

[Mr Christopher Chope (Christchurch) (Con)]

I am grateful to my hon. Friend for all his work on behalf of the victims of the Equitable Life saga. It surprises me that the Treasury has not yet conceded that it will have to spend the £139 million that it has in its coffers on this compensation, as it expected to, rather than take it as a windfall. Surely that is the starting point.

--- Later in debate ---

[Bob Blackman]

I completely agree with my hon. Friend—that is the starting point, but to be fair to the Treasury, we expected and hoped that the agency would be able to trace more victims of the scandal so that they could receive the compensation due. Tracing has taken place over an extended period, and I applaud the Government for using many different means to try to trace those individuals. Some people will have died, some have moved multiple times, and some were in all sorts of pension schemes that then moved on. Some people had small pension policies and may not have seen any point in requesting compensation. However, we now know exactly how many victims there are, and there is no excuse for retaining the contingency or the underspend.

I know that a number of Members wish to speak, so in conclusion, this is all about justice for people who have suffered loss. Indeed, not only did they suffer that loss, but it was avoidable. The Government, the company and the regulator knew that the scam was going on, but it was too big to fail because had it done so, the Government would have had to come up with all the compensation straightaway. This is a matter of justice, and on behalf of the all-party group for justice for equitable life policyholders, I pay tribute to the Equitable Members Action Group for its wonderful work over the years in bringing the plight of those people to light in both the public eye and in Parliament. The fight will go on until every single policyholder who suffered relative loss is receiving full compensation. I invite the Minister to receive comments from across the House, and to do the right thing by people who have suffered injustice.

--- Later in debate ---

[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.

Question put and agreed to.

Resolved,

That this House congratulates the Government on providing a scheme to compensate victims of the Equitable Life scandal; welcomes the Government’s acceptance of the Parliamentary Ombudsman’s findings in full; notes that the Parliamentary Ombudsman recommended that policyholders should be put back in the position they would have been in had maladministration not occurred; further notes that most victims have only received partial compensation compared to the confirmed losses and that the compensation scheme is now closed to new applicants; and calls on the Government to ensure that the entire existing budget allocated for compensation to date is paid to eligible policyholders and to make a further commitment to provide full compensation for relative losses to all victims of this scandal.

[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.

Oral Answers to Questions

Bob Blackman Excerpts

Tuesday 1st December 2015 Commons Chamber

[Mr Gauke]

My hon. Friend makes an important point. From September 2017, the Government are doubling the free childcare entitlement from 15 hours to 30 hours a week for working families with three and four-year-olds. That will be worth up to £5,000 per child. From early 2017, tax-free childcare will also be introduced, providing support worth up to £2,000 a year per child for working parents.

[Bob Blackman (Harrow East) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne)]

The core purpose of the Treasury is to ensure the stability and prosperity of the UK economy. Today I can tell the House that the date of the Budget next year will be Wednesday 16 March.

[Bob Blackman]

My right hon. Friend has announced that the closure of the compensation scheme for Equitable Life policyholders will be at the end of this month. We will then know exactly how many claimants there are. Has he any plans to extend the amount of money that is being given to the victims of this scam?

[Mr Osborne]

I am, of course, always happy to listen to representations from my hon. Friend and others, but we have put a substantial sum of taxpayers’ money into compensating the people who lost out through Equitable Life. We have also ensured, through our payment system, that those payments have been made. That is why the scheme is coming to a close.

Tax Credits

Bob Blackman Excerpts

Thursday 29th October 2015 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

It is a pleasure to follow that thoughtful contribution from the hon. Member for Arfon (Hywel Williams). I, too, congratulate the right hon. Member for Birkenhead (Frank Field) on securing this debate, and the Backbench Business Committee on its wisdom in granting it—I had the pleasure of chairing that meeting. This is the first opportunity I have had to contribute to a debate on the vexed issue of tax credits.

It is a great shame that the right hon. Member for Birkenhead was unable to convince his party when it was in government of the wisdom of transforming the welfare system in this country, but we are where we are. My big criticism of the previous Labour Government is that instead of reforming the welfare system, every time a new problem arose they set up a new benefit. The system therefore became unwieldy and unworkable. When I was elected in 2010, a series of people came to see me about the hugely complicated financial arrangements they faced, both with working tax credits and child-based tax credits.

[Mr MacNeil]

The hon. Gentleman says that when the previous Labour Government had a problem they increased tax credits. The real problem is low wages. This Government are weakening trade unions and undermining the right to collective bargaining, which is what allows workers to strive for higher wages, and that will not help the situation at all.

[Bob Blackman]

That is not quite what I said. I mentioned the welfare system and said that we had a series of different welfare benefits. Whatever the problem was, the Labour Government set up a new benefit, whether a tax credit or another arrangement. During a period of relatively high employment they failed to deal with the fundamental issue, which, as the hon. Gentleman rightly points out, is low wages.

This debate was billed as the last chance to review what the Government are proposing before it became fact, but events in the other place mean that we are now in a position to make alternative proposals. Contributions this afternoon will therefore be helpful to the Chancellor in deciding what to bring forward in his autumn statement. Clearly, we have to strike a balance. The Conservative party manifesto laid out that we were going to save £12 billion in welfare. The challenge is therefore to come forward with alternative proposals on how welfare savings of £12 billion will be found. Some £4 billion of savings are envisaged from this change.

I start with sympathy for the people affected. When we reduce people’s benefits, they will always complain. When we increase the tax threshold so that they pay less tax, they will be quite happy and will not complain. When their wages are increased, they will not complain. But if we take benefits away, they will squeal. We clearly must look at the effect on individuals in the round. We must have the utmost sympathy for those people who are working full time and have no alternative but to receive tax credits to top up their wages. What can they do? They suffer a loss of income, and that will have an impact on their families. Therefore, the first thing I would like the Chancellor to do is examine the measures so that people in full-time work suffer no impact whatsoever, because this is grossly unfair on them.

Equally, we face a challenge in both the public and private sectors. Over time the Government have quite rightly reduced business taxation to encourage businesses to grow and to locate within the United Kingdom. That has got to be good news, because it has created jobs. However, they have also kept wages artificially low, and that has to change. Therefore, I greatly support the principle of a living wage, but clearly it is far too low at the moment. We need to see it increase dramatically so that work pays, instead of relying on the taxpayer to subsidise work in private industry, which cannot be right. I hope that the Government will look at that, in particular, so that we can encourage businesses to pay their staff more for the work they do. That has to be the right way to demonstrate that work should always pay.

We hear constant criticism from the Labour party about the creation of large numbers of part-time jobs in this country. One of the reasons for that is the fact that a large number of people know that if they take on a part-time job, perhaps working 16 hours a week, they will still have access to a large range of benefits. That is a lifestyle choice.

[Richard Arkless (Dumfries and Galloway) (SNP)]

Will the hon. Gentleman give way?

[Bob Blackman]

I will not give way again.

That is a lifestyle choice that people make. What we can see is that Government proposals and Government restrictions on taxation and benefits change people’s habits, so what we have to do is enable people—

[Marie Rimmer (St Helens South and Whiston) (Lab)]

Will the hon. Gentleman give way?

[Bob Blackman]

I am not giving way again.

What we need to do is look at how people can change their behaviours to make sure their income is increased. The first area we have to look at is childcare. Working mothers and fathers who have childcare responsibilities need access to proper, decent childcare. I applaud the Government for the 30 hours’ free childcare, but that is not good enough for parents who, as a result, can only work part time. Please will the Government consider improving the amount of free childcare given—not the limited range we are discussing now, but more extensively—so that more people in this country can choose to take on more hours at work, and therefore improve their income at no cost to themselves? That would reduce the tax credits bill and ensure greater productivity in our industry.

Those two measures would start to alleviate the problem, but I believe that the Government, now in listening mode, need to consider where else we can save money in the welfare system. There is also a challenge for the Opposition: if they do not agree with reducing tax credits, from where else within the welfare system should the money come? That is a clear challenge, and I look forward to hearing in the winding-up speeches some of the answers to some of the questions raised in the debate.

The reality, and my greatest concern, is my constituents’ uncertainty about how they will be affected next April if the changes are introduced. As the right hon. Member for Don Valley (Caroline Flint) said, one of the problems is that people are making lifestyle choices now. It is not fair to those families and individuals who are thinking about what they should do in terms of work, where they study and so on to leave them in limbo. The quicker this is resolved, the better for everyone concerned.

Greece

Bob Blackman Excerpts

Monday 29th June 2015 Commons Chamber

[Mr Osborne]

I can assure my hon. Friend that we are taking such steps, and we are working closely with the Governor of the Bank of England. My hon. Friend’s broader observation about credible fiscal policy, whether in the United Kingdom or in the broader European economy, is well made.

[Bob Blackman (Harrow East) (Con)]

One of the options that the Greek Government appear to be pursuing is that of a Russian bail-out. What assessment has my right hon. Friend made of the impact of such a scheme on banks in London and the eurozone in particular?

[Mr Osborne]

As I said earlier, I do not think that anyone has been particularly enamoured with Syriza’s foreign policy, but what has been clear over the past few weeks is that it really needs to resolve the issue it faces with the eurozone.

Royal Bank of Scotland

Bob Blackman Excerpts

Thursday 11th June 2015 Commons Chamber

[Harriett Baldwin]

I have to disagree with the hon. Gentleman. A long time has passed since the initial flotation, during which the markets have done a lot better. The markets have welcomed the re-election of a strong Conservative Government who have turned the economy around and made huge improvements in our public finances. It is largely due to that that the price is so much higher.

[Bob Blackman (Harrow East) (Con)]

As we return RBS to the private sector, there are three alternatives. One is for the Government to hold on to the shares for as long as possible in the hope that the share price increases. The second is to sell the whole lot in one go and hope that we get the right price. The third is a phased sale that maximises the income for the taxpayer. Which does my hon. Friend believe is the right option?

[Harriett Baldwin]

My hon. Friend ably summarises a range of options. Today’s statement clearly illustrates that we have rejected his first option of doing nothing. The Government have never shrunk from making difficult decisions that are in the right interests of the country’s economic future. On the second option of selling everything in one go, it is not our opinion, given the size of the holding and as the reports make clear, that the sale can be done in short order; it will take a period of time—which leaves us with the third option.

Equitable Life

Bob Blackman Excerpts

Thursday 26th February 2015 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

I beg to move,

That this House congratulates the Government on providing a scheme to compensate victims of the Equitable Life scandal; welcomes the Government’s acceptance of the Parliamentary Ombudsman’s findings in full; notes that the Parliamentary Ombudsman recommended that policyholders should be put back in the position they would have been in had maladministration not occurred; further notes that most victims have only received partial compensation compared to the confirmed losses; and calls on the Government to make a commitment to provide full compensation during the lifetime of the next Parliament as the economy and public finances continue to recover.

In the run-up to the 2010 general election, the Conservative party discouraged candidates from signing any pledges, with one or two notable exceptions, the most notable being that of seeking justice for Equitable Life policyholders. Having done some research, I was very proud and pleased to sign that pledge. After I was successfully elected, I was immediately elevated to become co-chairman of the all-party group on Equitable Life policyholders. I am pleased to be able to report that we now have more than 200 members. That demonstrates what an important issue this is for people in this House and beyond.

It is important that we look at what is different about Equitable Life policyholders compared with those in other such schemes. With the advent of private pensions and the encouragement of individuals to save for their future retirement, Equitable Life developed an almost Ponzi-like scheme whereby its representatives went out and sold policies for which they promised bonuses and pensions that were beyond belief, and people were convinced to sign up for them. When that was reported to the regulator and the Treasury, they took no action whatsoever. This was all very well while money was coming into the pot, but eventually the amount coming in would be less than that going out, and therefore the scheme would collapse. The scheme therefore became too big to fail, because had it failed, the Government of the day, of whichever party, would have had to pick up the full cost of compensation to the policyholders.

The whole scandal was covered up during the scheme’s entire period of 20 years. A position was reached of a cosy relationship between the company, the regulator and the Government whereby they would not unveil the situation. The Equitable Members Action Group had to drag the Government through the courts. Eventually, in 2004, we had the publication of the Penrose report, which made recommendations about the position of Equitable Life. That was not good enough, because it did not do anything to compensate the people who had suffered. Then the parliamentary ombudsman made clear recommendations that the policyholders needed to be moved from the position where they had suffered a relative loss back to the position they would have been in had maladministration not occurred. That was very important. Equally, the ombudsman accepted that it would be appropriate to consider the potential impact on the public purse of any payment of compensation.

I am delighted that almost the first legislative step by the coalition Government was to put in place a scheme to compensate the individuals who had suffered a relative loss. We had argued in this Chamber for justice for those policyholders. There are various types of policyholders who have received different types of compensation. The first—

[Ian Paisley (North Antrim) (DUP)]

rose—

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

rose—

[Bob Blackman]

May I specify the types first, and then I will take interventions?

The first set of policyholders were those who took out their policies and had an annuity in place pre-1 September 1992. They were specifically excluded from the compensation scheme. I will come on to what happened to them subsequently. Secondly, there were the with-profits annuitants, who were given compensation of 100% of their relative loss—quite right too. Then there were the normal policyholders, who received an element of compensation. Unfortunately, when the legislation was set up, the public finances were in a scandalous state, and there was little money to allocate. I am delighted that the Treasury nevertheless chose to allocate sufficient funding to provide some £1.5 billion in compensation. There was £620 million to compensate the 37,000 with-profits annuitants, but, with the contingency fund of £100 million that was put in place, plus the costs of administering the scheme, that left only some £775 million to be spread between the 945,000 other policyholders, who therefore got only 22.4% of the compensation that they were due. As a result, those individuals have not been put back into the position that they should have been in had they not suffered the relative loss.

[Mr Mitchell]

My hon. Friend is making an extremely good and most important speech. I agree that the coalition Government deserve considerable credit for having tackled this early on in their term in office. Since, sadly, I cannot be here for the Minister’s speech, will my hon. Friend pursue the issue of the speed at which these payments are being made? Many of my constituents have had to wait a considerable length of time. I would be most grateful for his and the Minister’s reassurance that everything is being done to make these payments as rapidly as possible.

[Bob Blackman]

It is fair to say that the all-party group and EMAG have been on the backs of the Treasury Ministers responsible. The current Minister is in her place. Her predecessor, my right hon. Friend the Member for Bromsgrove (Sajid Javid), was very helpful in making sure that the scheme was speeded up and that people got the compensation due to them. Most importantly, he decided that he would not close the scheme, which could have been done under the legislation, until we had traced every one of the policyholders due for compensation.

[Philip Davies (Shipley) (Con)]

May I commend my hon. Friend on all his work on this issue over several years? Is not the crucial point in the motion that, with the public finances improving, the compensation already paid should not be considered the last word on the matter, and there should be more room to give proper compensation to people who need it? As I am sitting next to my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), may I ask whether my hon. Friend understands the frustration of many people that the Government seem to have plenty of money to spray on things such as overseas aid and aid to India, which might be better spent on such compensation to people in this country?

[Bob Blackman]

The clear issue is that when the assessment was made of the amount of compensation due to policyholders—this point is crucial—it was decided that £4.3 billion should be paid in compensation. Clearly, £1.5 billion has been allocated, although it has not all been spent, as my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) mentioned, meaning that a compensation bill of £2.8 billion is still outstanding.

The Prime Minister quite rightly said at the Conservative party conference that as the economy recovers and we fix this country’s problems, tax rates will come down, but I would say that there is a still a bill to be paid to the people who saved for their retirement. Therefore, as the economy recovers and the public purse allows, we should compensate policyholders who have suffered a relative loss, as we committed to do at the last general election.

[Sir Edward Garnier (Harborough) (Con)]

May I congratulate my hon. Friend and the co-sponsors of the motion on bringing this matter before the House? I am a past and, I think, a continuing policyholder of Equitable Life; given yesterday’s debate, I suppose that is a matter of deep interest to the world. I am concerned that the amount of compensation to be paid to individual policyholders is relatively small. Does my hon. Gentleman agree that there is now a duty on the Government to get rid of these fairly small claims as quickly as possible? Many of my affected constituents are in their 70s and 80s, and they need satisfaction as soon as possible.

[Bob Blackman]

I completely concur with my hon. and learned Friend.

I should say that the Chancellor made a key and very brave move to compensate the pre-1992 trapped annuitants with a one-off payment of £5,000, which was doubled to £10,000 for those on pension credit. That was very welcome, but we are talking about the most vulnerable people trapped by the scheme, and my view is that they should receive total compensation. The estimate for total compensation for that element alone is £115 million, which I consider a drop in the ocean compared with the total pension bill due.

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

May I congratulate my hon. Friend on bringing the motion before the House? As we are rapidly approaching that time in the political cycle called the Budget, I suggest that this is a golden opportunity for our Treasury team and the coalition Government to show that they have a big heart and meet the demands we are all making on behalf of our oldest and most vulnerable constituents?

[Bob Blackman]

I am sure that my hon. Friend the Economic Secretary is listening, but she will clearly not announce the Budget measures today. After this debate, however, I will seek a clear commitment from the political parties about what they will do if elected to government on 7 May. Although it would be welcome if the Chancellor stood up at the Dispatch Box and agreed a full compensation package, the key issue is that if he cannot do so in this Budget, Members and people outside the House will want to know what the political parties would do to compensate those who have suffered.

[Ian Paisley]

I congratulate the hon. Gentleman on getting this matter on to the Floor of the House. He is in danger of being canonised by the many thousands of people in Northern Ireland who are watching this debate closely because of how unfairly they have been affected. I hope that those on the Treasury Bench are listening to the points that Members have raised.

There have been announcements this week about the bonuses to be paid to bankers in banks controlled by the public purse, and some bankers have taken the personal decision to refuse bonuses if they so wish. At least they have the choice. The people who have suffered under Equitable Life have not got a choice. I hope that Treasury Ministers are listening, and recognise that if they want the future support of Opposition Members, they should address this issue before the end of this term.

[Bob Blackman]

I will call the hon. Gentleman my honourable Friend because he has been stalwart in defending the rights of the people of Northern Ireland who have suffered in this scheme.

The key point is that, according to the published figures, the Treasury had a surplus of £8.8 billion in January, which was remarkable given that we were expecting £6.5 billion. Some proportion of the additional £2 billion surplus could be put towards compensation for policyholders who have suffered.

[Iain Stewart (Milton Keynes South) (Con)]

My hon. Friend rightly mentions the surplus in January. We are coming to the end of the financial year, and many Departments may have an underspend in their allocated budgets. Would it not be a good idea to divert some of that underspend to the victims of Equitable Life?

[Bob Blackman]

I thank my hon. Friend for his suggestion. The Chancellor will be listening to such rumours, and will no doubt want to hoover up that money to dispense for appropriate good causes, of which this is clearly one.

[Jenny Willott (Cardiff Central) (LD)]

Does the hon. Gentleman agree that people have been pushed into an extremely difficult position, and that some of them are extremely close to poverty as a result of the amount they have lost? In many cases, they are not at an age at which there is anything they can do to replace the funds they have lost. They face a very uncertain future, as they have for many years, but there is absolutely nothing they can do to make a difference.

[Bob Blackman]

I do not normally agree with the right hon. Member for Holborn and St Pancras (Frank Dobson), but he has said:

“They were not like the people who put their savings into outfits offering dubious and extraordinary returns, such as those who decided to chance their savings with the Icelandic banks. The Equitable policyholders are in their current position through absolutely no fault of their own.”—[Official Report, 14 September 2010; Vol. 515, c. 781.]

He went on to say that those at fault were Equitable Life, the Government and the regulator.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Like other hon. Members, I congratulate the hon. Gentleman on securing this debate and on keeping this very important issue live. He must be aware that there will never be a right time in the Government finances to put this matter right. The Treasury may have made a small budgetary surplus over and above what it expected in January, but the fact is that the Treasury debt is still huge. It is as simple as that.

The only way round this problem is to say that there will never be a financially right time, only a morally right time. That time is now, given the long lag, which has been characterised by denials and evasions. They also occurred in the contaminated blood scandal, which was perhaps even worse. The only way to deal with this is to pay the £115 million that the hon. Gentleman rightly mentioned, and to have a clear statement about future year-by-year reductions in the outstanding £2.8 billion, which the Equitable Life policyholders have wholly earned and wholly deserve. They should be awarded the whole amount, because that is the only way in which this dreadful ill can be rectified.

[Bob Blackman]

I thank the hon. Gentleman for that intervention. It is a great shame that my hon. Friend the Member for Leeds North East (Fabian Hamilton) was almost the sole individual on the Labour Benches during the Labour Government who promoted a compensation scheme. I commend him for his efforts to get his Government to introduce one. I wish that other Labour Members had promoted such schemes.

[Paul Flynn (Newport West) (Lab)]

Will the hon. Gentleman give way?

[Bob Blackman]

I will make a couple of points and then give way for the final time.

We are clear about what we want the Government to do. Irrespective of which political party wins the general election, we want full compensation for the pre-1992 trapped annuitants. As I have said, it would cost £115 million to compensate those individuals. Those are the most vulnerable individuals because they retired a long time ago and many of them are very frail. It would cost a relatively small amount of public money to give them proper compensation. I am afraid that the longer we delay, the fewer of them will be around, because they are dying off almost daily.

Secondly, as the hon. Member for Coventry North West (Mr Robinson) said, we should commit to a graduated full compensation package so that the policy holders are compensated as the public finances continue to recover. Individuals who took out pension policies some time ago are not necessarily reaching retirement age. Topping up their pensions over four or five years would therefore enable them to retire in the way that they expected.

[Paul Flynn]

May I state that I have a close financial interest in this matter? I remind the hon. Gentleman that it was discussed at great length by the Public Administration Committee in the last Parliament. Does he have a formula, which is what we were looking for, that suggests who is responsible for losses made? Can we have a scheme that is consistent for all pension schemes that get in trouble, such as the Allied Steel and Wire scheme, which has still not been resolved? If he has such a formula, perhaps it could be agreed to between the parties now, so that what is national responsibility, personal responsibility and company responsibility is accepted and we have a resilient formula that can be used for Equitable Life, Allied Steel and Wire and all those that go broke in the future.

[Bob Blackman]

I note the hon. Gentleman’s intervention. The key point is that the Equitable Life policy holders have been through the courts and through the parliamentary ombudsman, and the matter has been found in their favour. Maladministration clearly took place and a key decision was taken to put those policy holders back into the position that they would have been in had that maladministration not taken place. Clearly, other pension schemes are in trouble. There are a lot of pension schemes in trouble because the previous Prime Minister, when he was Chancellor of the Exchequer, raided private pension funds and thought that that was a golden opportunity. We must take that into account. That is not the case with Equitable Life policy holders, which makes this a different matter. We have to be careful about broadening out this subject to other pension schemes.

[Dame Anne Begg (Aberdeen South) (Lab)]

Does the hon. Gentleman agree that expectations have been raised and promises have been made? All that these people did was to invest in what they thought was a trusted company. They have done nothing wrong and they cannot for the life of them understand why it is taking so long to settle the matter.

[Bob Blackman]

These people have battled and struggled through the courts and through a long process to get justice. There are many of us, certainly on the Government Benches but also on the Opposition Benches, who say that all these people did was invest for the future and trust what they were told. They took a risk to a certain extent that the market would be appropriate, but they did not expect the level of maladministration that took place or the way in which they would be treated.

[Sir Alan Haselhurst (Saffron Walden) (Con)]

My hon. Friend has made an eloquent case. He referred to the great disappointment that is felt by so many people who believe that they deserve compensation for what happened. He has not mentioned this, but does he agree that there is also considerable anger among people who feel let down? Is it not somewhat ironic and very uncomfortable that the Government who have started to do something about it are taking so much of the blame?

[Bob Blackman]

I have commended the Government for the action that they have taken to set up the scheme. At the time of the legislation, we tabled a cross-party amendment to ensure that the trapped pre-1992 annuitants would be compensated, but the Government resisted it. I am delighted that the Government saw sense after the lobbying that took place and provided a degree of compensation. The Government should be commended for ensuring that there is a compensation scheme. However, we have an independent assessment of the total amount of compensation that is due—it was not done by EMAG or by the Government, but is independent—and £2.8 billion is still due.

[Mr Mike Hancock (Portsmouth South) (Ind)]

The hon. Gentleman is being extraordinarily generous in giving way. There is a unanimous feeling in the House that justice needs to be done for these people. We know how much is outstanding and there is a big difference between what people are due under the existing compensation scheme and what they are actually due. Surely what we need is not a five-year plan to pay the money back, but a one-off payment that is made as soon as possible. Many of these people will die before they get their just reward.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I appreciate that the hon. Member for Harrow East (Bob Blackman) has taken a lot of interventions and I have allowed him a lot more time than is normally the case in this sort of debate. I also appreciate that there will be further interventions and I am not suggesting that he concludes his speech immediately. However, I make a plea for very short interventions, because people who say that they are not going to make a speech, but that they would like to intervene, take up the time of people who sit here all afternoon with patience and politeness, waiting to make a speech. I will not be tolerant of long interventions, but I am tolerant of the hon. Gentleman, who is being very generous in taking so many interventions.

[Bob Blackman]

Thank you, Madam Deputy Speaker. I was going to draw my remarks to a close after that last intervention.

The issue before us is one of justice and fairness. Everyone believes in ensuring that the policyholders receive proper compensation for the injustice that they have suffered. These are people who did the right thing: they invested for their future. They expected a reasonable return on their investment and to be protected by the regulator and the Treasury. The fact is that they were badly let down.

This is the opportunity for all three major political parties and the smaller parties to give a commitment on what they would do if they were elected as the Government on 7 May for the 945,000 people out there who are still waiting for 77.6% of the compensation that they are due and for the trapped pre-1992 annuitants who deserve full compensation, which at £115 million would be a drop in the ocean, and who are the frailest in our society. If parties give them that commitment, they will give them their votes; if parties deny them that commitment, they may withdraw their votes.

[Several hon. Members]

rose—

--- Later in debate ---

[Bob Blackman]

I congratulate the 12 Back-Bench Members from across the House who made speeches in the debate and the huge number who intervened. The will of the House is quite clear: this is a debt of honour, and it is no fault of the individual savers whose life savings have been either lost or severely depleted. We have heard many examples from Members. I could produce a mailbag full of examples of individuals from across the country who invested for their retirement but are now unable to supplement their income, through no fault of their own. They did the right thing by saving for their retirement, but through regulatory failure, a failure by Equitable Life and a conspiracy with the then Government, their savings were taken away from them.

This is a debt of honour, so I must stress the point that we should honour it over the course of the next Parliament. I completely accept my hon. Friend the Minister’s point that the economy was in tatters in 2010 and that a series of difficult decisions had to be made. I congratulate the Government on coming forward with a large sum of public money to compensate those individuals who are due. However, a debt of £2.8 billion is still owed to those people who saved for their retirement. That should be funded over the course of the next Parliament.

However, given the remarks from the Minister and the shadow Minister, I fear that there are currently no plans to provide that compensation. That means the battle will go on. The fight will continue until such time as the Equitable Life policyholders receive the compensation they are due. Therefore, if it comes to it, we will press the motion to a vote.

Question put and agreed to.

Resolved,

That this House congratulates the Government on providing a scheme to compensate victims of the Equitable Life scandal; welcomes the Government’s acceptance of the Parliamentary Ombudsman’s findings in full; notes that the Parliamentary Ombudsman recommended that policyholders should be put back in the position they would have been in had maladministration not occurred; further notes that most victims have only received partial compensation compared to the confirmed losses; and calls on the Government to make a commitment to provide full compensation during the lifetime of the next Parliament as the economy and public finances continue to recover.

Tax Avoidance (HSBC)

Bob Blackman Excerpts

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

We are still putting pressure on overseas territories and Crown dependencies, but all of them have signed up to the automatic exchange of information, which is a substantial breakthrough. I do not agree with the idea of putting all of them on a blacklist when France, Germany and the United States—indeed, 33 out of 34 OECD countries—have still not signed up to a public register. They are signed up, by and large, to a central register, but not yet to publishing it.

[Bob Blackman (Harrow East) (Con)]

Will my hon. Friend confirm that over the last four years, as a result of tighter regulation and the closing of loopholes, an additional £31 billion has been collected in taxes from large businesses, and that much of it can be used to fund public services or pay down the deficit? Will he confirm that none of that happened under Labour?

[Mr Gauke]

As my hon. Friend says, £31 billion has been raised from large businesses as a consequence of HMRC’s compliance activity. That underlines our determination, and HMRC’s determination, to collect the tax that is due under the law.