Equitable Life

David Amess Excerpts

Thursday 26th February 2015 Commons Chamber

[Sir David Amess (Southend West) (Con)]

I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on securing the debate and on his speech. He, together with my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), came up with a practical solution when they talked about the £115 million. As my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst) has said, it would be nice if we could get some credit.

There could not be a more perfect Minister to respond to this debate than the Economic Secretary, because before she became a Minister she was a wonderful advocate on behalf of those of her constituents who have suffered as a result of the issue under discussion. I hope she is well placed to persuade her boss, the Chancellor, so that, in two weeks’ time all the hon. Members present can take some credit, not least for the settlement of the £115 million. Every Member present has constituents who are among the 945,000 Equitable Life policyholders who have suffered huge losses.

I have raised the issue many times with the Treasury and I always receive the same response, which essentially states that the Treasury has decided to pay out £1.5 billion of its £4.3 billion obligation and that the Government understand the policyholders’ disappointment, but that tough decisions need to be made due to the pressures on the public finances.

We all understand that taxpayers’ money needs to be managed and spent carefully and with the greatest consideration. However, paying out the full amount of the obligation to the Equitable Life victims is not merely about spending the outstanding £2.8 billion of our scarce resources. It is about regaining and rebuilding the public trust in the ability of our Government to create a safe environment and regulation in financial services. This is about the reputation of the British Government and financial services generally.

The problem is not going to disappear, regardless of which Members of Parliament survive the cull on 7 May. Equitable Life victims will continue campaigning and the Members who are returned here will continue to put pressure on the Government of the day to meet their obligation. The Equitable Life victims were, as we have heard, absolutely doing the right thing, working hard and paying into pension funds for their retirement. That sense of responsibility and work ethic is exactly what this Government support.

By paying only 22% of the obligation, the Government are ignoring the recommendation of the parliamentary ombudsman, as many Members have said—it is the same recommendation that was previously accepted by the Government in full. The British Government’s ignoring the parliamentary ombudsman sets a poor example for ombudsman cases across the country. If the Government do not respect an ombudsman recommendation, why would anyone do so? It sets a precedent for undermining the work of ombudsmen generally throughout the United Kingdom. The need for austerity does not need to be explained to any one of us. However, compensation for victims of the Equitable Life scandal is not something that can be subjected to cuts. My constituents have already lost enough time and nerve trying to fight this injustice and I urge my hon. Friend the Minister to honour the outstanding debt.

I want to take this opportunity to congratulate the Government on what they have done so far. It certainly was not their fault that we were left with these terrible financial difficulties, but it is not right that the role of the auditors and external consultants should go unmentioned. They should be held to account for this scandal. Ernst and Young was providing audit services to Equitable Life. The company’s bosses now say that they regard this to be a closed case, as the individuals responsible have now retired. However, it is very far from being a closed case and a happy retirement for our constituents who are waiting for the remaining 78% of their money to be paid out. I reiterate that this is not just about spending taxpayer’s money. It is about the credibility and respectability of this Government and of UK financial services, and about the trust in our ombudsmen system.