Equitable Life (Payments) Bill

Debate between Claire Perry and Bob Blackman

Wednesday 10th November 2010 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

I pay tribute to the hon. Members who have spoken to the amendments. I praise our Treasury team, who have done a magnificent job of righting the wrong that was done to Equitable Life policyholders over many years. Opposition Members—there are some exceptions—should hang their heads in shame because of what they did when in government to Equitable Life policyholders. I came to the issue of the damage to policyholders rather late in the process—shortly before the general election. Like others, I was encouraged by my former employer to invest in Equitable Life, but it was a good job that I did not do so, or my view now might be different.

I remind hon. Members about the pledge that we made before the election: 380 MPs agreed to press for proper compensation for victims by swift, simple, transparent and fair payment schemes, as recommended by the ombudsman; and we agreed that we would all join the all-party group on justice for Equitable Life policyholders. I agree with the pledge, which I signed, and I have honoured every element of it. A large number of colleagues have not joined the all-party group that I have the privilege of co-chairing, and I encourage them to do so even if latterly.

I want to concentrate on three aspects of the amendments. The first is the moral duty that we owe to people who relied on advice and on the system of the regulator, the Government and Equitable Life. There was a major scandal, because those three bodies connived to swindle people out of their money. That is a sad indictment of what happened, and that is what set Equitable Life aside from all other aspects of the pension industry. We must demonstrate to people, especially young people, that it is worth investing in their future. If young people do not do so, there will be a sad and sorry state of affairs in this country. There is a clear moral duty.

The second issue is the amount of money that is due in compensation. I am delighted that the Treasury accepted that the ombudsman’s recommendation of £4.26 billion was the right amount to which policyholders were entitled. The debate today is not about money, but the Treasury team has come to a view that because of the economic circumstances only £1.5 billion is affordable. It has also had regard to the ombudsman’s report, which said clearly that relative loss must be taken into account. The Treasury team must have done some calculations to reach the figure of £1.5 billion, and I trust that the Minister will tell us in his reply today how that figure was arrived at. The reduction from £4.26 billion to £1.5 billion is dramatic, and he must respond to our points.

[Claire Perry (Devizes) (Con)]

My hon. Friend eloquently sets out the outrage that many of us feel, having signed the pledge. Does he agree that our Government, unlike the previous Government, have reached a speedy conclusion, as a result of which more people in the claimant group will receive compensation before there are further deaths? I agree with my hon. Friend about transparency and I, too, would support a motion to set out exactly how the calculations were made, in the spirit of our Government’s commitment to greater transparency in all financial matters.

[Bob Blackman]

I thank my hon. Friend for her intervention. The issues are complex, and the more one reads about and understands the scandal, the more difficult it becomes to resolve it. The Government in their wisdom have set out a compensation scheme that will continue for many years. The £1.5 billion is not a one-off payment that will go into a fund this year and end the matter. It will be spread over many years, and it will extend into the next Parliament.