Equitable Life

Desmond Swayne Excerpts

Thursday 31st January 2019 Commons Chamber

[Sir Desmond Swayne (New Forest West) (Con)]

It is a great privilege to follow my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Member for Leeds North East (Fabian Hamilton), to whom the House owes an enormous debt for the amount of time, effort and initiative that they have put into raising the profile of this important issue.

Ever since I have been in this House, I have experienced legislation after legislation and Government initiative after Government initiative to try to deal with the enormous implications of the problem we face as we spend an increasing amount of our lives in retirement. We cannot expect people to rely on the basic state pension. It was never designed to provide people with the level of comfort to which they had grown accustomed during their working lives. It was introduced to prevent people from falling into poverty, not to provide them with comfort. It was introduced to keep the wolf from the door. Notwithstanding the huge improvements that we have made, such as the legislative changes with respect to women’s entitlement and the operation of the triple lock, people imagine that they have paid for their state pension, but they have not. They have paid for those who are retired now, as they expect this inter- generational contract to proceed and that others will pay for them.

However, as the working population shrinks relative to the retired population, people must make savings for their retirement. We have this enormous task of public policy to get that message across to people and, hey, pensions are complicated and people have busy lives. They have children at school, mortgages to pay and job worries. Pensions are a low priority for them. I never cease to be amazed at the level of public ignorance and, indeed, indifference to knowledge about pensions—even in this House. Mr Deputy Speaker, you may be aware that the House authorities are providing seminars for Members who are approaching retirement, at which they suddenly discover the implications of the lifetime savings limit, something which you would have expected them to wrestle with since most of them will have voted for those changes in a Finance Bill in the last Parliament. Even Members are not immune from this.

We must deal with public indifference and ignorance, but we have added a further toxic element to that mix: hostility to pension savings. We have somehow let it get abroad that pensions are a mug’s game, that people who do the right thing and follow the exhortations to save actually end up, either through malice or through incompetence, having those savings stolen from them. Such is the case with Equitable Life.

These were overwhelmingly people of modest means. Many of them were employed in the public sector, where the scheme was widely advertised, so much so that they thought it was somehow publicly sanctioned. What happened, as has been described, was disgraceful. There was a measure of public culpability. The Treasury was aware of what was going on at Equitable Life, and therefore something must be done to compensate these people.

Ministers can be proud of the fact that, when they came to power in 2010 and sought to address this issue at a time when the public finances were under such pressure, they maintained it as a priority. Let us be honest that previously, when money was easy, nothing had been done. However, that was then and this is now, and it cannot go away—22.4% is not a settlement that can address the needs of those who are required to be compensated. We need to get the message out there that people will be protected if they do the right thing and save.

I have heard it said that Ministers sometimes ask whether, if they had a couple of billion to spend, this would be the way to spend it, given all the demands on the public purse. Yes, it would be. First, because of the public policy priority to which I have drawn attention and, secondly, because this is a matter of moral rectitude. If Ministers think it will go away and they can close the book, they should just look at the disproportionate number of the new 2017 intake who have joined this all-party group. It will not go away until there is justice.