Equitable Life

George Howarth Excerpts

Thursday 26th February 2015 Commons Chamber

[Mr George Howarth (Knowsley) (Lab)]

I will be brief. I congratulate the hon. Member for Harrow East (Bob Blackman) and my hon. Friend the Member for Leeds North East (Fabian Hamilton) on giving us the opportunity to debate this issue and on the motion, which sums up the situation very well.

I want to make two points. First, I am sure others have received a similarly, or possibly identically, worded letter to that which I have received from one of my constituents, which states:

“Victims of the Equitable scandal are…incensed that savers with Northern Rock, Bradford & Bingley, Icesave, RBS, HBOS and others have been bailed out 100% while they have been left with…compensation of less than 25% of their losses.”

When I first read that statement, I was not entirely sure that it was comparing like with like, but the more I thought about it, the more obvious it became that, ultimately, the comparison is completely valid, because there was a failure to regulate all those organisations and Equitable Life properly. The right hon. Member for Arundel and South Downs (Nick Herbert) has said—this was the first thought that occurred to me—that there were macroeconomic reasons for having to bail out those organisations at the time. Even so, the comparison of the two problems that both resulted from the failure of regulation is valid.

Secondly, it has been said repeatedly that the ombudsman pointed out unequivocally that there had been maladministration. We need to think carefully about that and the implications for the whole ombudsman system if we do not accept its consequences as well as its judgment. An ombudsman system that finds maladministration and then says how it can be dealt with cannot be properly respected by the Government or anybody else unless the consequences of its findings—in this case, the costs involved—are addressed in full. It is important, for all the reasons that have already been given, that the people affected are properly compensated, but it is also important, if we are going to have a proper ombudsman system, to accept not only its findings with regard to maladministration, but the consequences of those findings.

I am perfectly content with the motion, which concludes by calling on the Government

“to make a commitment to provide full compensation during the lifetime of the next Parliament as the economy and public finances continue to recover.”

My hon. Friend the Member for Coventry North West (Mr Robinson), the hon. Member for Harrow East and others have put together, almost during the course of this debate, a package that might work. It involves using more effectively the money that is already available now and then having a programme of meeting the full costs over the course of the next Parliament. I think that that strategy provides a solution and I hope the Minister will accept that when she responds to the debate.