Equitable Life Policyholders: Compensation

Jim Shannon Excerpts

Thursday 23rd March 2017 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Harrow East (Bob Blackman) on setting the scene. I also thank him personally, because for the time that I have been in the House—since 2010—he has always championed the Equitable Life policyholders. Today, some seven years later—for me, if not for him—we find we are still fighting for something for which we were fighting back then. The hon. Member for Leeds North East (Fabian Hamilton) is no longer present, but he should be commended as well, because he has clearly fought equally hard to bring about justice for the policyholders. Like both those Members, we all support the continued attempts to ensure that our constituents are not left financially ruined after doing their best to save for a rainy day.

There is not a big representation in the Chamber today, but that does not detract from the importance of the debate or lessen the impact of what we are about to say or have said so far. All those who have spoken have made valuable contributions, all of them saying the same thing and all of them looking to the Minister—there is no pressure on the Minister, is there?—to deliver the answers that we want. With respect, and the Minister knows that I mean this in the best possible way, we must convey to him what our constituents are telling us. We need the Government to know exactly where we stand.

Before I came to the House, when I was a Member of the Northern Ireland Assembly, we debated this matter there, and we also had debates and correspondence about it when we were councillors, and we were probably following these issues in other roles even longer ago, many years before I came here.

People always use that phrase about saving for a rainy day. Well, the rain is falling now, and it is the Government’s responsibility to hold out the umbrella. The newspaper over the head is starting to wear out: it is useful at the start, but it does not last. It is time for the Minister to step up to the mark and do the right thing by these savers. I have received dozens of e-mails and letters from my constituents, and I have never come across an Equitable Life policyholder who was in a high income bracket. The hon. Member for Leeds North East spoke of people in a low income bracket, and those are the people we are talking about. The impact on them is greater, and, unfortunately, they do not have time on their side either.

My constituents and those of my Northern Ireland colleagues have spoken to us about this issue, and I believe that this is an opportunity for me to make my constituents’ case and, like other Members—including some who have now left the Chamber—to give examples. I am very aware of the fact that the Government have paid out a substantial sum of money—at present, almost £1 billion—which is commendable; we should give credit where it is due. However, that is an indication of the fact that the Government have a further responsibility that needs to be fulfilled. I understand as well as anyone else in this Chamber that we currently have an £89 billion deficit, and I congratulate the Government on their economic policies. Unemployment in my area has fallen— that is a devolved responsibility—but the fall is in part a result of the greater economic policy carried out centrally by the Westminster Government. We must seek to lower the deficit, but we must also honour our obligations, and that is what we are asking the Minister to do today: to honour this obligation.

The hon. Member for Leeds North East mentioned in an intervention that some of the policyholders might never see this issue being brought to a conclusion and get the benefits, and they will therefore live on low incomes until the day they die and pass on from this world. If Governments have a mind to settle and help out the savers, could that be retrospectively passed on to their families? Will the Minister address that in his summing up?

I was brought up in a household where saving was drilled into us from an early age. That was not just because of our Ulster-Scots background, which meant that every pound was a prisoner; we were encouraged at a very early age to have savings, and we have done that throughout our lives. It was good to learn that lesson, because it showed us the value of money, and there was not much of it.

That points to what we need to do. “Put a bit aside for the future” was a phrase that was repeated often, and I have instilled that principle in my boys—successfully, I believe. But times have changed as well; it is difficult for my boys to buy a house and live their lives, never mind save on their wages. For that reason, the Government have put schemes in place to encourage saving, yet the question must be asked: why bother when we have an example of a generation—the one just before us and alongside us—who scrimped and saved and are still having to do so, through no fault of their own? We must incentivise a generation to know that savings are safe, and we should demonstrate that by doing the right thing by the Equitable Life savers.

A good point was made to me, and I shall repeat it now as it is important for it to go on the Hansard record:

“The Government ensured that no savers lost out because of the banking crisis. £133 billion was found to support the banks. According to the NAO, £76 billion is still to be recouped. At recent share prices, the taxpayer is likely to end up losing £15 billion”,

and it was suggested that there could be a loss of up to

“£22 billion on RBS alone, with annual losses in billions continuing year after year. EMAG does not believe that Equitable Life savers—who did the right thing in saving for their retirement—should have to pay for the recklessness of the banks.”

I am sure that the Minister is aware of that, but if he is not, he needs to be.

The banks got special treatment. I know the importance of giving that to the banks, but it is equally important for Equitable Life policyholders, although we must also be ever-mindful that the Government have made a substantial contribution in that regard. However, as the hon. Member for Harrow East (Bob Blackman), who set the scene today, and others have said, we need to do that little bit extra.

The facts are that £2.6 billion of relative losses should be paid to the 895,000 Equitable Life victims who are still 78% short of what they are due—a substantial sum for them—and pre-1992 with-profit annuitants should be treated the same as post-1992 WP annuitants.

Equitable Life policyholders are justified in their grievance and in pursuing full compensation. We in this House, as their representatives at Westminster, have been tasked with putting their case. That is the reason for today’s debate, and it is why I am standing with those Equitable Life victims, alongside my colleagues in this Chamber from across the whole of the United Kingdom of Great Britain and Northern Ireland. We are all together, asking for justice for the Equitable Life victims. I ask the Government to pledge simply to do the right thing by these pensioners.

--- Later in debate ---

[Mike Weir]

Indeed it is. That is the point that I was making.

Some of us are now getting to the age at which we are beginning to think seriously about what our pensions will bring us—it is going to hit us pretty shortly—but I have children who are in their 20s, and this is a very long-term investment for people in their 20s and 30s. Young people today who look at the WASPI women or at Equitable Life pensioners will not have the same confidence that people of my generation might have had that they are putting aside savings to augment their state pension. The state pension is changing, and we are looking at different ways in which people will invest for the future, such as auto-enrolment. All these things require confidence, but that confidence has been undermined by continuing scandals such as Equitable Life.

The Government have to look at the bigger picture, rather than simply looking at Equitable Life in isolation. They have to look at how we can get over this hump and ensure that all young people make provision for the future. If we do not do that, a much bigger problem will be coming over the horizon when those young people get older, having made no provision because they lacked confidence in the system. What are we going to do then? The fall-backs that exist today will no longer be there for them. I urge the Minister, even at this late stage, to go back to the Chancellor and say, “Look at the bigger picture. Look at how we are dealing with pensions. How can we get confidence back?” If we do not do this, the picture will get even worse later.

[Jim Shannon]

The hon. Gentleman reminds me of a point I should have made earlier. It is recognised that parents often need to make financial provision for their children, and that we are using some of the money that we have to make that happen, yet some Equitable Life policyholders have told me that they are unable to do that. Has the hon. Gentleman come across similar cases?

[Mike Weir]

I have a daughter who is now into her third university degree, so I know exactly what the hon. Gentleman is talking about. Yes, parents are having to use their own money to help out their children, and that can cut down the amount that will be available to them in the future. That is a decision that they have to make, however; it is a slightly different issue. The bigger issue is the future. Many young people today are not earning enough money, and many have been landed with large debts following their university degrees. That, and the lack of confidence in the system, will have an impact on their ability to save for a pension. I think I have gone on long enough now, so I will end on that point.