Equitable Life

Debate between Daniel Kawczynski and Gordon Henderson

Thursday 11th February 2016 Commons Chamber

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

Much of what I wanted to say has been mentioned already by other hon. Members, including my hon. Friend the Member for Harrow East (Bob Blackman), who has been a fierce and consistent champion for Equitable Life policyholders. I wish to make very clear my continued support for the Equitable Life policyholders in my constituency, and I believe the best way to do that would be to resurrect some comments I made in a speech in this House almost six years ago. That speech was one of my first after being elected in 2010, and it brings into sharp relief just how long some of us have been trying to get justice for those of our constituents affected by the collapse of Equitable Life, some of whom lost thousands of pounds.

I pointed out the following in that speech:

“Several hon. Members have suggested today that the Equitable Life scandal—and a scandal it was—is complicated, but for me it is actually quite simple. It is about fairness to a group of people who were badly let down by the regulatory failures of their Government. I went into the recent general election supporting a Conservative manifesto that made a promise to Equitable Life policyholders in my constituency. It said:

‘We must not let the mis-selling of financial products put people off saving. We will implement the Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure.’”

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

My hon. Friend refers to that manifesto commitment in 2010. May I tell him that in the previous Parliament I helped to set up the all-party group and that we interviewed the then shadow Ministers at that juncture and they promised they would do everything to help the people affected? My constituent, Mr Meinertzhagen has lost half his pension as a result of this terrible tragedy.

[Gordon Henderson]

I am grateful to my hon. Friend for bringing that to my attention.

I continued that speech by saying:

“I wish to take this opportunity to assure policyholders in my constituency that I for one do not intend to go back on that election pledge.

Most people accept that Equitable Life policyholders were the subject of Government maladministration, and that is certainly the view of the ombudsman, Ann Abraham. There is some dispute on all sides, however, about the level of compensation that should be paid to policyholders. Sir John Chadwick’s report established that the relative loss suffered by Equitable Life amounted to between £4 billion and £4.8 billion, and the Financial Secretary, in his statement to the House this July, supported that figure. However, Sir John then used a series of convoluted calculations and speculative assumptions that allowed him to suggest a cap on the total amount of compensation that should be paid. He then went on to reduce that cap figure to just 10% of the relative loss figure that he himself originally calculated.

One of Sir John’s most telling assumptions was that the majority of policyholders would have invested in Equitable Life irrespective of maladministration. That is a very big assumption that cannot be proved or disproved…

Like many Members, I have been in touch with many of those policyholders, and all they want is fairness, because they are fair-minded people. However, they are not stupid people, and they recognise that in these times of austerity even they must shoulder some of the burden needed to bring down the country’s massive debt mountain.”—[Official Report, 14 September 2010; Vol. 515, c. 834-35.]

That was my position in 2010 and that position has not changed.

The Government went some way towards compensating those who lost money in the Equitable Life scandal, but that compensation met only part of the loss, so the Equitable Life investors in my constituency received partial justice. In truth, partial justice is no justice at all, and I urge the Government to give people justice now.