Equitable Life (Payments) Bill

Debate between Jim Shannon and Heather Wheeler

Tuesday 14th September 2010 Commons Chamber

[Jim Shannon]

My hon. Friend must have read my mind. The parliamentary ombudsman’s report describes the Equitable Life situation as a decade of regulatory failure, and her second recommendation is that the Government should set up and fund a compensation scheme with the aim of putting people who have suffered a relative loss back into the position they were in before maladministration occurred.

The issue facing us is the percentage of the value of the Equitable Life schemes. A report commissioned by the previous Government suggested that policyholders lost up to £4.8 billion in this debacle and proposed that they should receive a package of about £400 million. However, there is no guarantee of that figure, which has been bandied about by many. They are not new figures, and I am sure that some here could repeat them in their sleep, especially the Financial Secretary to the Treasury, who has been reminded of them several times in letters from constituents of mine, forwarded through my office, yet they bear repetition so that all here will be under no illusion about the situation.

I remind hon. Members that this is not merely a number-crunching game that we are playing; we are playing with the quality of people’s lives, and it is essential that the Bill be subject to any decision reached. In July, the Financial Secretary said in the House:

“Consistent with the ombudsman's recommendation, Sir John has advised that relative loss for an individual policyholder should be capped at the absolute loss they suffered.”—[Official Report, 22 July 2010; Vol. 514, c. 577.]

Yet I remind the Financial Secretary that when he was a shadow Treasury Minister he wanted to ensure compensation for injustice. I ask that this be done and that we compensate for the injustice that all those people have suffered over years of unnecessary struggle.

I agree wholeheartedly with Chris Wiscarson, chief executive of Equitable Life, when he said:

“Let’s not make Equitable policyholders victims three times over. First, at the hands of the regulators, as so clearly articulated by the parliamentary ombudsman”—

as colleague have indicated—

“second, at the hands of the Labour government who failed to bring closure over a decade; and now third, compensation that will be decimated if Sir John Chadwick's advice, meant for the Labour government and slated by the ombudsman, is used.”

I am aware of the financial position. We all know that we have to make hard decisions over the next few years about how the money will be spent. We are not running away from that. Indeed, I am fighting against reductions in grants that mean that Northern Ireland Housing Executive constituents are living with damp in their homes; that worthy disability living allowance recipients are being stripped of their support; and that roads are ruining cars because there is no money to fix them. I see all of that, and everybody else sees it, but I accept that we must take into account the fact that the money is unavailable. However, to compensate Equitable Life members with 10% of their investments is scandalous and can never be acceptable.

Today, it is my desire, and that of many in the House, that reasonableness be made the basis of any decision.

[Heather Wheeler]

I wonder whether the hon. Gentleman is in the same position as I am. I have a family of constituents—two generations—affected by this problem, and the desperation of those who write to, e-mail and meet me in my constituency is phenomenal. Has he found that in his constituency too?

[Jim Shannon]

Yes, it is replicated, right across the United Kingdom, for families, individuals and others. Indeed, there is sometimes a whole string of people affected, including people with different jobs. It does not matter what their jobs are: they can be fishermen owning their own boats or bin men collecting bins and getting rid of the rubbish. Those are the ups and downs—the highs to the lows, and everywhere in between—so the hon. Lady is absolutely right: everyone is affected.

What really worries me is that those who are affected have reached the golden age of retirement, when their mortgage has been paid off and when they know that they do not need to work any more or slog their guts out—if I can use that terminology in this House—but have time to enjoy the finer things, such as laughter and joy with their families. The terrible, horrendous situation in which they find themselves has stripped too many of our pensioners of their joy and placed on their shoulders both financial worry and a burden that should be long behind them. Today is the day for us to shoulder some of that load and burden, and to help them along life’s road. That is our purpose as MPs in this House. Today is the day for us to step up to the mark and reset the balance for those who have waited for help for some 10 years. Today is the day for action. Let it be the right action.

I finish with a quotation from a letter from one of the many people who wrote to me:

“I, like many others, in fairness expect and deserve compensation, as recommended by the Parliamentary Ombudsman and promised by the coalition Government, and not a figure based on the Chadwick advice, which the ombudsman himself described as an unsafe and unsound basis on which to proceed”.

With that in mind, I would urge hon. Members to support the legislative change and the amendments that will arise from it. In my book, Mr Deputy Speaker, that is worth fighting for.