Equitable Life

Kim Johnson Excerpts

Thursday 21st January 2021 Commons Chamber

[Kim Johnson (Liverpool, Riverside) (Lab) [V]]

A scandal like the collapse of Equitable Life has unimaginable repercussions for the lives of the victims, many of whom live in my constituency of Liverpool, Riverside. Ten years ago, when the life insurance company collapsed, policyholders lost billions of pounds in total, and the Government were forced to pay more than £1 billion in compensation, but the cost to the lives of those affected was far greater: pensions wiped out; lives destroyed; thousands dying before they received justice. People who had strived all their lives to save for a comfortable retirement had their plans and dreams shattered overnight—a burning injustice and one that undermined the wider confidence in saving for retirement. Everyone has a fundamental right to grow old with dignity and security, to relax and enjoy the fruits of a lifetime of endeavour. These victims were robbed of that opportunity.

It was the Government’s maladministration that played a role in the collapse of Equitable Life, so it should be the duty of the Government to ensure that the victims are fully and fairly compensated, and that this never happens again. Every effort must be made to ensure that those owed compensation are identified, and that the process is accurate and transparent. The Equitable Members Action Group wants full payment for 895,000 traced pension saver victims, finally settling the unpaid debt covering their losses. Current levels of complaints and appeals clearly demonstrate the inadequacy of the system. A freedom of information response exposed that in every case where a complaint had been raised—[Inaudible]—victims of the Equitable Life scandal, it resulted in an increased payment to the policyholder.

On top of this, the scheme has been unable to trace over 100,000 policyholders who are eligible for reimbursement. Many of them will now be in their 80s and 90s. As such, I welcome the proposal for a joint inquiry into the accuracy of the payments made, and I look forward to the response to that proposal from the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee. Would the Government support such an inquiry?

A scandal such as Equitable Life should never be allowed to happen again, yet just last month the Government had to establish a new compensation scheme for London Capital & Finance investors, many of whom lost their entire life savings. Given the apparently flawed methodology behind compensating the victims of the Equitable Life scandal, what steps are the Government now taking to ensure that those eligible for compensation in the London Capital & Finance investor scheme are not short-changed and can have full faith in the compensation process? What action have the Government taken to make sure that such firms are properly regulated from now on, to ensure that such a devastating loss never happens again?

People approaching retirement deserve security and the peace of mind that they can grow old with dignity and comfort and that the savings they put away during decades of hard work will be safe. Flaws in our financial regulations have been exposed in such a disastrous way, and we cannot, a decade down the line, be found again to have been asleep at the wheel. We must tighten regulations, protect savings and uphold people’s right to dignity in old age, and we must ensure that the 2,000 victims of Equitable Life in Liverpool, Riverside receive fair and transparent compensation.