Equitable Life

Debate between Chris Heaton-Harris and Stephen Lloyd

Thursday 26th February 2015 Commons Chamber

[Stephen Lloyd]

My hon. Friend is absolutely right. A number of people are now reaching an age when something needs to be done extremely quickly. A constituent of mine, Billy Murphy, a variety artist for 70 years, had been lobbying me patiently, and I had been supporting him, until he sadly passed away in January. He had been making contributions for many years, and he was a very good example of the people to whom my hon. Friend and many others have referred: decent, hard-working people who were prudent and put money aside. Those people have lost out, not because of their own inadequacy —not because they took a punt, or played the stock market—but because they invested in a well-established and respected pensions company that was regulated by the Government. It was regulated by the Government: that is the whole point, and that is why we as a nation, whichever Government are in power, have a real responsibility to do what is right.

[Chris Heaton-Harris (Daventry) (Con)]

I am a former Equitable Life policyholder myself. I had a company pension policy. I distinctly remember questioning the person who sold me the policy about how Equitable Life was regulated, and being told that there was no chance of its failing because it was acting well within the regulations that existed at the time.

[Stephen Lloyd]

That is a very important point. The whole system—from the perspectives of finance, prudence and proper rule of contract law—fell apart under Equitable Life. It completely collapsed. When something like that happens in a country like the United Kingdom, the duty of the Government, irrespective of some of the broader issues, is to provide proper compensation, because otherwise the whole fabric becomes extremely vulnerable.

I find it bewildering that none of the senior managers of the old Equitable Life—and none of the people who were in charge of the marketing side or the investment side—went to jail. If I, as a Member of Parliament, find that bewildering, I can imagine the profound frustration that so many of our constituents must feel, given that they were doing the right thing. This was a company that was regulated, regulated within an inch of its life—that was the whole point of the sector—yet, through no fault of their own, it collapsed, and, a few years later, the parliamentary ombudsman said that there had been a systemic failure of regulation. All those senior managers and executives, whom we all knew, must have been aware of what was happening.

I greatly appreciated what was said earlier by the hon. Member for Stretford and Urmston (Kate Green). When she bought an Equitable Life pension which she kept for a few years, all the marketing suggested that the company was rock solid and the purchase almost a steal. She was told “You really must invest in this.” Those people must have known what was happening, and I fail to understand why they were not penalised.