Equitable Life (Payments) Bill

Bob Blackman Excerpts

Tuesday 14th September 2010 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

I should also like to place on record my congratulations to my hon. Friend the Member for Congleton (Fiona Bruce). I have to confess that, as I listened to her speech, I looked at my road map, having driven through her constituency on many occasions, trying to avoid the traffic on the M6.

We should also congratulate Opposition Members who stood up to the previous Government and said that they were wrong to prevent the policyholders of Equitable Life from receiving just compensation. I also congratulate the right hon. Member for East Ham (Stephen Timms), who was left in isolation today, without the other members of his Front-Bench team who, under the Labour Government, made the decision to defend the indefensible—namely, 10 years of inaction and putting roadblocks in the way of the policyholders to prevent them from receiving their just compensation.

There are four players in this mix. First, there are the Equitable Life policyholders. They invested for their future and set aside money for their old age. They took a small risk, thinking that they would receive their just rewards in the long term. In normal circumstances, I would maintain that the public purse cannot bail out private investors, but this is a unique position, because those Equitable Life policyholders believed that the Government and the regulator were acting properly. It took court action and the ombudsman’s report to drag out the fact that the reverse was the case. It is right that the policyholders should be compensated in the way that has been proposed.

Members of Parliament are also players, seeking to act as advocates for the policyholders who have been so badly treated. We all want to see just and proper compensation for those policyholders. Treasury Ministers are players, too, and they will have to deal with the politics, and with the financial chaos that the coalition Government have inherited. Finally, we have the Treasury, which will try to minimise the amount of money paid out, in order to safeguard the public purse.

I congratulate the Financial Secretary on taking prompt and appropriate action. He could, presumably, have stopped the Chadwick report in its tracks. However, that would have set us back at least a year, while we sought another approach. Instead, he allowed it to come to fruition. It is quite clear that members of EMAG and MPs of all parties, but particularly Government Members, are unhappy with the Chadwick approach and believe that his report is fundamentally flawed. The resulting issue is whether we are to adopt the approach of Chadwick or of the ombudsman—or some hybrid approach to deal with the disgrace that has happened.

We also have to deal with the fact that policyholders had a range of policies, which means that a range of people are involved. Many complex negotiations and calculations have to be undertaken. Sadly, some policyholders are deceased. For them, whatever we do, it is too late. We should and must compensate their spouses, however, while ensuring that the survivors receive proper and due compensation. That is only right and just.

[Angie Bray (Ealing Central and Acton) (Con)]

Does my hon. Friend agree that at a time when we want to encourage people to become savers again, it is vital to be seen to support these people and do what we can to help them through what turned out to be an absolute disaster? We must send out the right message—that we are here to support savers and that we want to do the right thing by them. Is that not the best way to help get people back to feeling secure in making savings?

[Bob Blackman]

I could not agree more with my hon. Friend.

There is a second set of policyholders within Equitable Life, whom I believe are critical—the people who have reached retirement age and are dependent on this income. Telling them that they will not receive any compensation until next summer is a disgrace. We have to do something more quickly to honour those people in their latter years so that they are properly compensated now, not when they are at death’s door. I ask the Treasury team to look urgently at that matter.

Other sets of policyholders will have many years to go before they retire. They can be compensated in many years’ time—with top-ups to their pension pots, for example, or in different ways. On these crucial issues, I hope that the Front-Bench team will confirm in the winding-up speeches what is going be done.

First, I believe we need an appeal process—not relating to the amount of money people receive, but to the structure of the scheme and where people will fit into it so that the payments can be made. That will be a complex area. I doubt very much whether everyone will be completely satisfied with the amount of money they eventually receive, so we really need an appeal process. I would welcome further confirmation from the Front-Bench team that they are considering how to deal with that.

Secondly, there is the issue of the total amount of money to be given to Equitable Life policyholders. It is quite clear from the estimates and all the reports that we are talking about something in the order of between £4.5 billion and £5 billion. I would like to see some recognition, for the benefit of EMAG members, that that is the total sum of money they are due. I think they all live in the real world; they know the financial mess the country is in, as bequeathed by the Labour Government. They will listen when it is explained that the number—whatever it is—needs to be adjusted down as part of the comprehensive spending review.

I have a real fear, however, that if we hear that number as part of the comprehensive spending review, people will start comparing the amount of money justly given in compensation to Equitable Life policyholders with, say, the amount that is being given to education, for schools, to hospitals, universities or old people’s homes. Then we will face the problem of priority. I think everyone recognises that difficult choices lie ahead, but if we can get it recognised that the right sum is something in the order of £4.5 billion to £5 billion, it will be possible for policyholders to recognise that that will not be the full compensation that they will receive—but the right sort of signals will have been sent.

We also need to be clear on the acceptability of the Chadwick report and its methodology. We have heard tonight—every Member is of the same view—that the problem with the Chadwick report is that its methodology is flawed and that the total cap on the money is unacceptable. Let us hear that the Front-Bench team are going to sweep it away and that the figures involved will be taken into account, but will not be the be-all and end-all of the process. Then EMAG could feel that tonight was a good night for its members and we could feel confident in the future.

[Several hon. Members]

rose—

PAYE Contributions

Bob Blackman Excerpts

Wednesday 8th September 2010 Commons Chamber

[Mr Gauke]

My hon. Friend is right to raise those points. As I said, additional staff are provided to call centres in an attempt to address this matter. HMRC is endeavouring to provide a good service to taxpayers, notwithstanding the difficulties of the circumstances.

[Bob Blackman (Harrow East) (Con)]

May I congratulate the Minister on taking prompt and appropriate action on this inherited fiasco? Much mention has been made of telephone hotlines and so on, but the vast majority of people who receive requests or demands for the return of unpaid tax will not have advisers or anyone to assist them. Will he make an effort to ensure that the letters that are sent to our constituents are in plain English and easy to understand, and that they contain appropriate calculations that the individual taxpayer can appreciate and understand, so that they can make their decisions without recourse to either MPs, tax advisers or accountants?

[Mr Gauke]

My hon. Friend raises a good point. As I said, HMRC has sent 45,000 to 50,000 letters. We will analyse the responses to those letters to see what can be done to ensure that there is as much clarity as possible in further letters.

Equitable Life

Bob Blackman Excerpts

Tuesday 20th July 2010 Westminster Hall

[Mr Hoban]

I am keen that the commission should work as quickly as possible. In many respects, the process would have been shorter without the commission, but it is an important guarantee of transparency and openness, and it is right that it be given a remit to do this work. Equally, I am mindful of the fact that we need to give it a tight timetable, so that it has time to think about the issues but is not seen as delaying the process of making payments to policyholders.

[Bob Blackman (Harrow East) (Con)]

One of the concerns is that, sadly, many policyholders have died or are dying. Can the Minister give some comfort on the issue of giving interim payments once the decision has been taken, so that people can receive payments before the commission has completed its work?

[Mr Hoban]

I am conscious of the fact that many policyholders are elderly, but there is a challenge: we need to ensure that the scheme is designed transparently and fairly, and that there is fairness between groups of policyholders as well as between policyholders and taxpayers. The commission should look at where priority payments should be made, but I am wary of the question of how we can make interim payments to people on a sound basis that will not lead to further problems later. I take on board my hon. Friend’s point, but there are some challenges in taking the idea forward.

A key issue for many policyholders and Members of Parliament is how much the scheme will cost. As the ombudsman said, it is appropriate to think about that, and we will consider the potential impact on the public purse of any scheme, and what is affordable, before we decide how much we can allocate to the scheme. We will ensure that fairness is at the forefront of our thinking when making those difficult decisions.

I would like to take a moment to mention the excellent work of EMAG, which has campaigned for many years for a fair resolution to the matter. In opposition and now in government, I have met members of the EMAG board, who have relayed to me their concerns about the Chadwick process. I will say to hon. Members what I said to them: Sir John is only a building block in our approach, and I am willing to listen to EMAG and other interested parties who can give useful and productive insight into this complex issue.

I remind hon. Members that no final decisions have yet been made on many of the important issues associated with the scheme. I want the decisions to be in the best interests of policyholders and taxpayers, and I encourage EMAG and others to be involved so that we can move the process on and find a resolution, for which policyholders have waited for many years.

I will give more details on our approach and the next steps in the process when Sir John Chadwick’s final report is published, but I can confidently say that we are moving towards our objective of resolving the issue. We are now reaching a crucial stage in the story of the Equitable Life payment scheme. What happens in the coming months will be decisive in laying out how the scheme operates and the quantum of payments that will be made to policyholders. I encourage all MPs to engage in the debate. This is certainly an issue that we must get right.

Banking Reform

Bob Blackman Excerpts

Thursday 17th June 2010 Commons Chamber

[Mr Hoban]

There is an issue about pay levels, which we will need to look at. I am intrigued by the hon. Gentleman’s suggestion that there should be a greater variable element in relation to performance, given that a critique of many is that an excessive bonus culture in the City contributed to the financial crisis.

[Bob Blackman (Harrow East) (Con)]

Will the Minister please explain how today’s announcements will end the confusion in the markets and make sure that there is proper focus on regulation to end that confusion?

[Mr Hoban]

The package that we have set out today, which was greeted with a great deal of support last night when the Chancellor outlined it to the City, ends any uncertainty. The transition process that we have outlined today in relation to legislation, and the team led by Hector Sants, the current chief executive officer of the FSA, will reassure the City about the direction of travel on regulatory reform. The new settlement, which takes into account macro-prudential supervision, micro-prudential supervision and effective consumer supervision, will ensure that we have the right package of regulatory structures in future to safeguard the economy and to give confidence to consumers and others in the markets.