Equitable Life

Jim Cunningham Excerpts

Thursday 31st January 2019 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

I beg to move,

That this House welcomes the Government’s acceptance in full of the Parliamentary Ombudsman’s findings in relation to its maladministration with regard to Equitable Life; notes that the Parliamentary Ombudsman recommended that policy holders should be put back in the position they would have been in had maladministration not occurred; further notes that the overwhelming majority of victims have only received partial compensation compared to the confirmed losses directly attributed to regulatory failures; and calls on the Government to make a commitment to provide full compensation to victims of the scandal with the end of austerity now in sight.

I thank the Backbench Business Committee for allowing us to have this debate, and the Government for finally allowing us to have some time in the Chamber to debate the issues that the Backbench Business Committee wishes to put forward. I declare an interest as co-chairman of the all-party parliamentary group for justice for Equitable Life policyholders. I have held that office ever since I was elected to Parliament in May 2010. I will set out the history of the scandal, the Government’s position to date, the current position on compensation, and what we want on behalf of the victims of the scandal. It is worth recalling that this was a Ponzi scheme. Equitable Life encouraged people to move their life savings into unsustainable pension funds by promising bonuses that could not be delivered. It also paid commission to agents to encourage people to move their savings into these scandalous positions. Ponzi schemes are all very well when money is coming in, but eventually money must be paid out. If the amount of money coming in is unsustainable, the bonuses that are promised to savers cannot be paid.

After almost a decade of operating the scheme, Equitable Life started legal action in 1999 to try to reduce the bonuses; it was unsuccessful in that regard. It then tried to sue its auditors for failing to point out the errors in its scheme. It was unsuccessful in that enterprise, too, and had to pay out more than £30 million in court costs. All that money could have been used to compensate the victims of the scam.

Eventually, the parliamentary ombudsman intervened and took up the case. Her recommendations said that this was the most serious case of maladministration she had ever encountered, and that the people involved were the Government, the regulators and Equitable Life. That is what makes this case unique.

[Mr Jim Cunningham (Coventry South) (Lab)]

The hon. Gentleman is making a compelling speech. He is right that the situation has been ongoing for a very long time. The parliamentary ombudsman said—I have read some articles on this today—that people still have not yet been fully compensated, and some of them have actually died. We have raised this issue time and time again over the years. My hon. Friend the Member for Leeds North East (Fabian Hamilton), who will speak shortly, has done a hell of a lot of good work on this. I congratulate the hon. Member for Harrow East (Bob Blackman) on securing the debate.

[Bob Blackman]

I thank the hon. Gentleman for that intervention. I have no doubt that the co-chairman of the APPG, the hon. Member for Leeds North East (Fabian Hamilton), will make a substantial contribution to this debate. He has been involved in this for more years than he probably cares to remember.

The previous Government promised some degree of compensation to the victims of this horrible scandal. I was a candidate at the 2010 general election, and in the run-up to it, the only pledge that Conservative campaign headquarters asked me to sign was that we would give full compensation to the victims of the Equitable Life scandal. I regard that pledge, which I signed, as one to the electorate and it is something I will honour. I believe that the Conservative party should honour it in full, and I welcome anyone else who will join me.