Equitable Life

Brendan O'Hara Excerpts

Thursday 11th February 2016 Commons Chamber

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

It is a pleasure to sum up the debate. I warmly thank the hon. Member for Harrow East (Bob Blackman) and those who signed the motion. As has been pointed out, the wide-ranging all-party parliamentary group has 195 members from all parties, which demonstrates the interest hon. Members take in this matter. It was also said in the debate that, in each of our constituencies, there are around about 2,000 Equitable Life policyholders, which shows the scale of the problem we face and why we must take the matter seriously. I am delighted that we are having this debate today.

The hon. Gentleman talked about the outrageous scandal, which is exactly the point. He went on to talk about the perceptions of market risk—markets going up and down—and the promises that were given to Equitable Life policyholders. However, in the main, we are not only talking about promises, because Equitable Life gave guarantees to its policyholders. We ought to reflect on that point, particularly in the light of what he said in the debate about who knew within the company, the regulator and the Government. Ultimately, the Government must stand behind the regulator when there is market failure of the degree that took place with Equitable Life. That is their responsibility.

The hon. Member for Bexhill and Battle (Huw Merriman) spoke at the tail-end of the debate. I say to him that everybody understands that all parties want a balanced budget, but we also have a moral and ethical responsibility to protect the consumer interest. That is what we are talking about today. I ask the Minister to reflect on what was said by the hon. Member for Harrow East and others on looking for those who have pre-1992 annuities and considering what can be done for them.

Two broad themes have been mentioned time and again in the debate: fairness, which was mentioned by the hon. Members for Sittingbourne and Sheppey (Gordon Henderson) and for North Devon (Peter Heaton-Jones); and regulatory failure, which goes back to the Government’s ultimate responsibility, and which was mentioned by the hon. Member for Eddisbury (Antoinette Sandbach).

The hon. Member for Romsey and Southampton North (Caroline Nokes) made the point about the 2,000 members and the fact that all hon. Members are still getting letters from constituents. Many of my SNP colleagues have had them in the past few weeks.

One of the most important points was made by my hon. Friend the Member for Angus (Mike Weir) and others. We must have confidence in the financial markets. If we are not going to stand behind the policyholders in this case, that undermines the savings culture that we want. We want people to invest in pensions and know that there is consumer confidence problem. We must tackle that.

I want to put this debate in the context of the good debate we had just a couple of weeks ago on the Financial Conduct Authority. One much-discussed theme was the importance of consumer protection and trust. On the back of scandals such as those involving Equitable Life policyholders, it is clear that many consumers are concerned about whether they can trust the providers of financial services products, whether they can trust the regulatory regime to protect them, and whether the Government will discharge their obligations to protect the consumer interest. The significance of that cannot be overstated.

[Brendan O’Hara (Argyll and Bute) (SNP)]

Given that the regulator was there to protect consumers and that the Government were standing behind the regulator, does my hon. Friend agree that, when that regulator failed to protect the consumer, the Government had a moral obligation to step in and protect policyholders?

[Ian Blackford]

I strongly agree. I can hear my hon. Friend the Member for East Lothian (George Kerevan) commenting in the background—he made that same point in the debate, as did the hon. Member for Reigate (Crispin Blunt). There is unity in the House on wanting a savings culture. We want people to retire with decent pensionable income, but we will create that confidence only if we show that we are prepared to stand behind the Equitable Life consumers. They were let down by the company and the regulator, and the Government have that moral and ethical responsibility to step in. That should not be underestimated.