Equitable Life Policyholders: Compensation

Kirsten Oswald Excerpts

Thursday 23rd March 2017 Commons Chamber

[Kirsten Oswald (East Renfrewshire) (SNP)]

I am pleased to be able to speak today and to keep up the pressure on behalf of constituents who have been hard hit and who deserve better. I thank the hon. Member for Harrow East (Bob Blackman) for initiating the debate and for his continued hard work on behalf of all those affected.

Like, I am sure, other Members, I remember the reassuring adverts that must have attracted many people at the time. They were warm, homespun and affirming, telling us that “It’s an Equitable Life,” which it clearly was not. If there were any equity or justice in life, we would not be here today on behalf of our constituents whose lives have been changed in such a damaging way. Although I understand the steps that have been taken so far, their confidence in both government and financial regulation has been shattered.

I think of constituents of mine, such as James Moore of Newton Mearns or Howard Lyle, who lives in Eaglesham. Howard is now 81, but he was a self-employed business man. He worked hard for his living and did all the right things to provide financial security. In fact, he ended up working until he was 72 years old. He felt that he had done everything possible to ensure that he had good financial plans in place and would not be dependent on the state in his retirement. But, of course, all his well-laid and well-paid-for plans are in tatters. Howard says:

“All I am looking for is a repayment of what I and hundreds of other pensioners are owed.”

Who could possibly argue with that? I have named only two constituents, but, like other Members, I know of many others who are similarly affected and have been similarly failed by what is clearly a toothless regulatory system, which has utterly let them down.

[Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)]

My hon. Friend is making some great points. Given the hardships that some of our constituents have faced, given the injustice and, indeed, the age that some of them are reaching, will she join me in expressing admiration for their tenacity and their determination to keep the issue on the political agenda and to continue to fight this injustice?

[Kirsten Oswald]

My hon. Friend makes an excellent point. We should commend those people for all their continued work in keeping the issue at the forefront of our minds.

A cynical person might wonder whether—as with the collapse of the Connaught Income Fund, which was mentioned by my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry)—there is a strategy of dragging action out for an extraordinarily long time to ensure that fewer of those affected are still with us. It is simply not good enough for this sorry saga to continue for even longer. The UK Government must now finally deal fully with the outstanding injustices experienced by these unfortunate policyholders.

We really do need to grasp the nettle, and acknowledge the wrong that has been done and the impact that it has had on people’s lives. It is essential for action to be taken on behalf of the people who have lost out, but we also need to ensure that they can maintain confidence in our pension provision and in financial and regulatory bodies.

[James Heappey (Wells) (Con)]

The hon. Lady is making some powerful points on behalf of her constituents. Many of my constituents have also been in touch to say that they see this as such an unfairness because they did the right thing. They worked all their lives, and they paid into a scheme that they thought was the right one. That sense of unfairness is compounded by the way in which so many other schemes that have failed have been dealt with. Banks have been bailed out by the Government, and policyholders have been refunded. Does the hon. Lady agree that the grievance of these policyholders is perhaps all the more because so many other organisations have already been bailed out?

[Kirsten Oswald]

The point is well made. I think that Equitable Life policyholders, like Connaught Income Fund investors, feel particularly hard done by, and that is perfectly understandable. We need to deal with the compensation, and that can only happen when we have fully quantified the loss by negotiating the sums involved. At present, we are simply not there. After all this time, the Government need to acknowledge and deal with the injustice that people understandably feel. They have worked hard, and they have saved hard. They have done all the things that Governments emphasise are financially responsible and the way to guarantee security in retirement. Imagine how they must have felt when not only did their hard-earned money vanish, but the Government failed to protect them and then, to compound the problems further, failed to offer fair compensation.

Of course I recognise that there has been some compensation, but those affected understandably feel that that is not good enough and that it is not right for them to lose out because the Government claim that there are financial constraints. Why should they pay the price for failures of Treasury regulation in the 1990s? The Government must realise how much damage scandals such as this cause to public confidence in saving and in regulation. Surely, as the hon. Member for Harrow East said, righting wrongs like those suffered by Equitable Life and, indeed, Connaught investors is part of the way to restore that confidence.

There is real confusion, much of it arising from inaccurate communication from the Department for Work and Pensions, about the national insurance contributions that are needed for the new state pension. As we have heard from a number of Members today, WASPI women are marching on Parliament because the UK Government have whipped the pension rug from under their feet. Here, the saga of the Equitable Life policyholders drags on and on, and their pension provision has also vanished into the ether. If the Government are at all serious about pensions and about people saving for their future, they must listen and they must act now, finally, to deal with the Equitable Life scandal once and for all.