Equitable Life

Mike Weir Excerpts

Thursday 11th February 2016 Commons Chamber

[Mike Weir (Angus) (SNP)]

It is a somewhat novel experience for me, as a Scottish National party Member, to stand up to support a motion that starts by saying

“this House congratulates the Government”.

However, I do so because this matter has been dragging on for a large number of years. The hon. Member for Sittingbourne and Sheppey (Gordon Henderson) said that he had been dealing with this for six years. I was first elected to this House in 2001, and I have been talking about it for coming up to 15 years now. This all started when the policyholders won their case before the House of Lords in 2000, so they have been fighting this for 16 years. Many Administrations refused to take it seriously, but I give the coalition Government credit for finally grasping the nettle and introducing a scheme. We may not agree with all the terms of the scheme, but that Government did do something about this. I see from a note I received from the Library that it appears that, when the scheme closed on 31 December, some 125,000 policyholders had not come forward to submit a claim. That is a large number of people who have not even got any money out of the existing scheme.

It took a report from the ombudsman to get the ball rolling on compensation, and I suppose the reason we are still debating it today was her conclusion:

“the diversion of scarce public resources is a relevant consideration which should be taken into account and weighed in the balance along with other relevant considerations”.

In introducing this debate, the hon. Member for Harrow East (Bob Blackman) said that the agreed sum outstanding was some £2.5 billion, but it is not entirely straightforward to see exactly what sum is required to put the policyholders back to where they would have been in terms of the relative loss. I have seen figures of up to £5 billion and as low as £500 million in this regard. First, we have to be clear exactly what the figure is. The Government, policyholders and the Equitable Members Action Group must agree what the figure is, because at the moment a large range of figures are being talked about.

The action group has consistently campaigned for full compensation. It is a disgrace that people have got less than a quarter of what they should have received, all because of the Treasury. That is where I disagree slightly with the hon. Member for Bromley and Chislehurst (Robert Neill), who said that the Government stand behind the regulator, as in this case the Treasury was the regulator for the relevant period during the 1990s. The Government have a direct responsibility for what went wrong in this case, which is why compensation is due. As has been pointed out, many policyholders have received compensation amounting to only about 22% of the losses.

Over the years, like many Members, constituents, many of them elderly, have come to me about this matter. Sadly, time has whittled down their numbers. One constituent, a Mrs Smith from Arbroath, told me the other week that she did everything she should have done. She made provision for what she expected to be a relatively good retirement not reliant on Government funds, but she was robbed of it because of a regulatory failure. Equitable Life was touted as a long-established, steady company. I used to be a practising solicitor and remember it well—not that I ever put any money into it, thankfully—but no one then realised the problem lurking below the surface.

The Government need to grasp the point about what happens from hereon in. We are now asking people to make greater provision for their own pensions, but that will work only if people are confident they will get the pension they are investing in. Equitable Life and other such scandals have greatly undermined that confidence. We need to show that when something goes wrong, through the fault of the Government, compensation will be available to put people in the position they would have been in. If we do not, the danger is that people will not be convinced to invest in the new pension landscape. In the future, the Government might face a much higher bill, because if we do not encourage people to invest in their own pensions, the state will inevitably have to step in. I urge the Minister to reconsider, given the confusion about the figure.