Equitable Life

Debate between David Drew and Kevin Foster

Thursday 31st January 2019 Commons Chamber

[Kevin Foster (Torbay) (Con)]

It is a pleasure to be called to speak in the debate, and also to have a chance to reflect on how some of my constituents have suffered as a result of what happened with Equitable Life. However, it is probably worth my saying briefly now that, over the past few years, the tax take from the wealthiest in society has gone up, not down.

Let me turn to the general focus of this debate. It is worth remembering that these investments would not have been seen as high risk. People would not have thought that their capital was linked to the performance of the stock market. They would not have thought that they would lose their money entirely. They saw these investments as something for their lifetime savings—they used to be referred to as “widows and orphans” investments—and they would not have expected to lose the whole lot of their money. This was not buying shares in equity or playing on foreign exchange markets, when a person has to accept that there is a chance that they will lose not just what they think they might have gained, but the actual capital they invested. It is therefore understandable that this case has had much more of an impact on those affected than would have been the case had they been investing in the types of products with such enhanced risks.

I pay tribute to Usha Waygood, the co-ordinator of Torbay EMAG, for the determination that she has shown over many years, as well as for the information that she sent me ahead of this debate. It is worth reflecting on the fact that this is a business that ceased trading in 2000—19 years ago. It is clear that a total failure of regulation in relation to the company led to its collapse. The parliamentary ombudsman’s report was compiled in 2008—long before many of us in the Chamber had even been elected as Members.

There was then—the hon. Member for Leeds North East (Fabian Hamilton) reflected on this in his interesting speech—a lack of response by the then Government, which was a huge concern. Thankfully, that situation was partially rectified in 2010, when we finally saw some action taken with the independent commission. It is worth saying people still saw only 22.4% of what they had lost paid to them.

To help me put that into perspective, I asked some of my constituents who had been affected to set out the cost to them. For example, Mr Brian Wills-Pope said:

“I have had 10% of the differences I should have got.”

Mr Gordon Cook said:

“It has cost me about £5,000 per annum in pension.”

Mr David Jones added that the loss was approximately £30,000. He was paid around £6,000 from the compensation fund in 2012. When Mr Robert Clee emailed me, he said that his pension had seriously depleted over the past 25 years, which coincided with his retirement, which he thought that he had provided for adequately. That is the issue: many of the investors were approaching retirement and therefore had little opportunity either to take on new work or to make alternative arrangements before they felt the full impact of the hit to their finances.

For me, this is about not just what happened—that has been well documented—but about what could happen next. I certainly join other Members in asking the Minister to look at retaining all the necessary data in perpetuity, given that there is an ongoing impact on those affected. That reassurance should certainly not be too difficult to give.

I am also interested in hearing a bit more about the point that has been made by some campaign groups in relation to the pre-1992 with-profits annuitants who could be given equality with later annuitants through the £140 million underspend from the £1.5 billion that has been cited. I am realistic—I accept that money does not grow on trees and cannot just be printed—but perhaps something could be done over the coming years. No one is saying that the money should be paid immediately. We accept that these are people who are looking for support over a period of time.

It is worth looking at some of the other impacts that resolving these issues would have. It is about a potential reliance not just on state—national—projects, but at a local government level, given the age of some of these people. Clearly they are starting to make social care payments, which would have been mitigated had they received the savings that they originally expected to have for their retirement.

It is vital that we reflect on how we ensure that people have confidence that this will not happen again—I am sure the Minister will consider that when he comes to respond to the debate.

[Dr Drew]

There is another problem. I wonder how many of our constituents have faith in the ombudsman, given that when it has made a recommendation, that has not, in any way, been seen through by Government.

[Kevin Foster]

I think that it is probably safe to say that there has been some action from this Government in responding to the recommendations of the parliamentary ombudsman, but this is about building faith and about people having confidence. Let me be blunt about this. There are those of us who have just turned 40. We want to make sure that those who are taking part in auto-enrolment and who are looking to retire in the future have the confidence to start putting money aside. Bluntly, I am putting money aside now for my pension. I will be 68 when I am entitled to take my state pension. I have to be confident that my money will still be there in 28 years’ time. I accept that, as Members of Parliament, we are in a unique situation, but people in the workforce want to have confidence that if they put away money that they do not plan to access for 30, 40 or even 50 years, it will still be there. It is so vital that that confidence is there. Ultimately, the pension system, like any other savings and investment scheme, operates on the basis of confidence. People need to be confident that if they put money away, it will still be there. They need to understand the risk that they are taking at the time. As we touched on, people viewed these schemes them as a pension investment—a secure pot—not as a high-risk investment through which, yes, the returns might be high, but there was a clear and present risk to their capital as well as to any future profits.

I am conscious that we need to move on because we have another debate to follow, so I will draw my remarks to a close. I hope that we will be able to make progress and that people in Torbay who have been waiting for so long, and who probably would not have expected their MP to still be talking about this issue 19 years after the company’s collapse, will have something to look forward to.

Middle Level Bill

Debate between David Drew and Kevin Foster

Report stage: House of Commons
Wednesday 28th February 2018 Commons Chamber

[Kevin Foster]

We are on Report, whose purpose is to look at the technical detail of the Bill and satisfy ourselves it would be appropriate. In terms of whether I support the principle, my council does not offer a parking fee concession for those who hold a blue badge, only the ability to use reserved spaces that are very close. Again, that principle is established in many areas, so I do not think the principle of this is one to take forward. This is not about someone needing an extra facility because they are disabled; this is about a boat and navigation and whether people pay the same charge as everyone else and are effectively treated exactly the same.

On amendments 15 and 16, it does not make any sense to remove the ability to promote reciprocal arrangements, and it could end up costing boat owners more if they have to have separate licences and registration and different standards, so I urge the House to reject these amendments. On amendments 17, 18, 19 and 20, a protocol will be put in place, so I do not accept the suggestion that the existing powers would be oppressive. A houseboat would only be removed in the last resort and where it was proportionate to do so.

On amendment 23, it makes little sense to apply this cap only to the application fee; it does not apply it to the registration fee. This could produce perverse effects in the long run, and I again suggest it should be rejected.

My view and that of the promoters is that amendment 26 this would cause confusion: if things are done in “conjunction” with, rather than through “consultation”, and someone wishes to take legal action, whom do they take it against? They could end up taking it against members of the navigation advisory committee which actually just got involved to represent people, so this could act as a deterrent for anyone wanting to be involved.

There are many good reasons for this Bill to be passed. It has been examined in great depth in the Opposed Bill Committee and on the Floor of the House. I thank my hon. Friend the Member for Christchurch for his great interest and the scrutiny he has given this Bill, but I urge the House to reject all the new clauses and amendments, if necessary.

[Dr David Drew (Stroud) (Lab/Co-op)]

I am pleased to be able to make this short speech in support of the Bill, unamended as it is. I congratulate the hon. Member for Torbay (Kevin Foster) and those who sat on the Committee. They seem to have done a great deal of clever and thoughtful work. I know very little about the Middle Level Bill, but I do know a lot about the Gloucester and Sharpness canal, where we had similar issues relating to the need to update and to who should be able to moor and therefore be charged for facilities. That was resolved, although not without difficulty, because there was some opposition. Eventually, however, people saw sense on issues such as shutting the canal on certain days when there is limited need to use it, to allow people easier passage over its many bridges. It is right and proper that such arrangements should be revisited from time to time, to ensure that our canal system and the waterway system in general are fit for purpose. I should like to add my congratulations on the work that has been done, and I hope that the Bill will pass without amendment.