Equitable Life

Geoffrey Robinson Excerpts

Thursday 26th February 2015 Commons Chamber

[Bob Blackman]

I do not normally agree with the right hon. Member for Holborn and St Pancras (Frank Dobson), but he has said:

“They were not like the people who put their savings into outfits offering dubious and extraordinary returns, such as those who decided to chance their savings with the Icelandic banks. The Equitable policyholders are in their current position through absolutely no fault of their own.”—[Official Report, 14 September 2010; Vol. 515, c. 781.]

He went on to say that those at fault were Equitable Life, the Government and the regulator.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Like other hon. Members, I congratulate the hon. Gentleman on securing this debate and on keeping this very important issue live. He must be aware that there will never be a right time in the Government finances to put this matter right. The Treasury may have made a small budgetary surplus over and above what it expected in January, but the fact is that the Treasury debt is still huge. It is as simple as that.

The only way round this problem is to say that there will never be a financially right time, only a morally right time. That time is now, given the long lag, which has been characterised by denials and evasions. They also occurred in the contaminated blood scandal, which was perhaps even worse. The only way to deal with this is to pay the £115 million that the hon. Gentleman rightly mentioned, and to have a clear statement about future year-by-year reductions in the outstanding £2.8 billion, which the Equitable Life policyholders have wholly earned and wholly deserve. They should be awarded the whole amount, because that is the only way in which this dreadful ill can be rectified.

[Bob Blackman]

I thank the hon. Gentleman for that intervention. It is a great shame that my hon. Friend the Member for Leeds North East (Fabian Hamilton) was almost the sole individual on the Labour Benches during the Labour Government who promoted a compensation scheme. I commend him for his efforts to get his Government to introduce one. I wish that other Labour Members had promoted such schemes.

--- Later in debate ---

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I shall confine myself to the reduced speaking time, Mr Deputy Speaker, and in doing so, I shall pay only short tributes to those who have secured this timely and necessary debate. I believe that my hon. Friend the Member for Leeds North East (Fabian Hamilton) has followed this issue—as I have followed similar issues—through several Parliaments, and that the hon. Member for Harrow East (Bob Blackman) has, in a very determined and concentrated fashion, made it a priority since his election on the basis of a very strong campaign on the subject.

Several aspects of this issue must make us uncomfortable. We can all respond, in a way, to the emotive interjection of the hon. Member for The Cotswolds (Geoffrey Clifton-Brown), who called for immediate full payment and said that there was no alternative. That makes us all feel very good. However, I wonder what impact the debate will have on the many pension holders who are wondering whether we can improve on the present situation. We must not, as my hon. Friend the Member for Stretford and Urmston (Kate Green) made clear, give false hope. We are dealing with recalcitrance in the machinery of government and although we are entirely rightly approaching this on an all-party basis, which it is important for us to maintain, it is clear that for some reason, although there is a will to do this among Ministers it is held up because the machinery of government initially does not want to admit guilt, and at a later stage has to constrain things and uses the grounds of the public purse to do so. That will happen whatever state the public purse is in: other priorities will rank higher and there will be other things we need to do. We will be told we must look to the future and, above all, we must not create precedents. I say to the Minister and my right hon. Friend the Member for East Ham (Stephen Timms), who was a Minister, that they will find that the roadblocks put up by the machinery of government are almost insuperable. However, I believe that there is a way through in this case.

Many Members have referred to the Penrose committee and to the ombudsman’s report. There was a very clear statement, the like of which I do not think I have seen in my time in the House, about a total and comprehensive failure of regulation. There are no ifs, no buts and no extenuating circumstances, just an admission of failure and of incompetence on the part of Government that should be put right. I believe that it can be put right and think that there is a measure for doing so.

The great thing about this debate is that there is no doubt about the figures. I cannot see anybody disputing the figures, not even the Treasury. The total is £4.3 billion and the Government have pledged £1.5 billion. Without damaging the present deficit, £115 million would enable us to deal with the most chronic, the most aged and the least well-off of the pension holders. They could be dealt with straight from the contingency of about £100 million that is committed in the Government deficit, as is the total £1.5 billion. That is all in the deficit—it has to be for the Government to commit it. In my day, a commitment to spend counted as expenditure in the year it was committed, not in the year it was paid out. That might have changed, but it is a commitment and it will have been taken into account in the Budget this year. In my opinion, the whole amount could have been taken into the year in which it was committed and future Government projections will certainly all have it in.

Without any effect on the Government deficit, we could pay off the clearly identified with £115 million straight away and we could look at the as yet unspent £500 million. That would make a big start, although it would not go all the way. I share the emotion expressed by the hon. Member for The Cotswolds and could speak about it with the same intensity as he did, but the fact is that £500 million is there. There is £115 million to deal with the worst cases. Let us get that paid out. I agree with the hon. Member for Harrow East—this seems very much to be his idea—that we should have it in the party manifestos. There might not be great hope of that, but why not try? I will certainly support it with my party and I am sure that he will with his. I am not sure what success we will have, but we should support that.

Beyond that, we are dealing with a further £2.3 billion. I do not think that we should consider a time period of any more than three years. We must be precise, so that unlike with the contaminated blood scandal, when the Government could sit back and say that having caused those people’s deaths they would die sooner or later, this does not become a terminal problem. We cannot wait that long. That money should be timetabled, committed and spent within three years of the new Government taking office. That is a proposal on which I think we can unite. We could bring most policy holders into it and it is doable.

[Robert Neill (Bromley and Chislehurst) (Con)]

I, too, congratulate the hon. Members who secured the debate. Like my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Member for Leeds North East (Fabian Hamilton), I have signed the pledge. This is not a phrase that often falls from my lips, but that was the right thing to do under those circumstances and it is right for Governments to keep their pledges. I know that there are constraints in Government and having served as a member of this Government I am conscious of the economic pressures, and I understand the point made by the hon. Member for Coventry North West (Mr Robinson) about the fact that periodically civil servants come to Ministers with rather convenient escape clauses, but the job of Ministers is sometimes not to accept such escape clauses.

I am speaking on the basis that this is a Government who are committed to markets and to stability and confidence in our markets. I believe in that. The financial services sector and insurance sector are a critical part of our markets. I speak as secretary of the all-party parliamentary group on wholesale financial markets and services. For the markets to work efficiently, there must be proper and secure regulation and when there is a failure in regulation there must be genuine certainty of recompense to those who have done no wrong, because otherwise honest and sensible investment is deterred. That is the risk if we do not do justice to the Equitable Life policyholders. What message would that send? We all say that it is right to invest prudently and wisely for one’s future and any such message would be against the philosophy of my Government and, I hope, against the philosophy of any responsible Government. In the long-term, it is in the interests of good economics and good financial planning that we do justice to the Equitable Life policyholders.

The motion is sensibly and moderately phrased. We are not saying that everything can be done at once, but that in the course of the Parliament this ought to be done. It might be that the proposal made by the hon. Member for Coventry North West is part of that. I will not be tied to an exact time frame, but it is particularly important that the oldest—the pre-1992 people—are given priority. It is also important to recognise that although the Government are picking up something that did not happen on their watch, part of being in government is that one has to deal with the consequences of what one inherits and has to do so fairly. Happily, thanks to the policies of this Government, the economy is improving. It is not unreasonable against that background to expect those people who have made a sacrifice, in that their fair recompense has been delayed, to share some of the fruits of that economic recovery.

[Mr Robinson]

I know that the hon. Gentleman did not mean to interject any sort of difference between party or Government, but what he said was not right. The lack of regulation and the failure of the policies happened under a Conservative Government’s watch. We must get away from mentioning Governments, as this affects all parties and all Governments over the period of the failure.

[Robert Neill]

I am sorry to disagree with the hon. Gentleman, but he misunderstands what I was saying. Regardless of party, there is an obligation on Government, and I must say that the 13 years for which there was a Government of which he was a distinguished member cannot be entirely ignored. We all must pick up what we inherit from our predecessors, of whatever party, and we must put them right. That is the key and that is why I agree that having done the history we need to move on and find a sensible way forward.