Equitable Life

Paul Flynn Excerpts

Thursday 26th February 2015 Commons Chamber

[Bob Blackman]

I thank the hon. Gentleman for that intervention. It is a great shame that my hon. Friend the Member for Leeds North East (Fabian Hamilton) was almost the sole individual on the Labour Benches during the Labour Government who promoted a compensation scheme. I commend him for his efforts to get his Government to introduce one. I wish that other Labour Members had promoted such schemes.

[Paul Flynn (Newport West) (Lab)]

Will the hon. Gentleman give way?

[Bob Blackman]

I will make a couple of points and then give way for the final time.

We are clear about what we want the Government to do. Irrespective of which political party wins the general election, we want full compensation for the pre-1992 trapped annuitants. As I have said, it would cost £115 million to compensate those individuals. Those are the most vulnerable individuals because they retired a long time ago and many of them are very frail. It would cost a relatively small amount of public money to give them proper compensation. I am afraid that the longer we delay, the fewer of them will be around, because they are dying off almost daily.

Secondly, as the hon. Member for Coventry North West (Mr Robinson) said, we should commit to a graduated full compensation package so that the policy holders are compensated as the public finances continue to recover. Individuals who took out pension policies some time ago are not necessarily reaching retirement age. Topping up their pensions over four or five years would therefore enable them to retire in the way that they expected.

[Paul Flynn]

May I state that I have a close financial interest in this matter? I remind the hon. Gentleman that it was discussed at great length by the Public Administration Committee in the last Parliament. Does he have a formula, which is what we were looking for, that suggests who is responsible for losses made? Can we have a scheme that is consistent for all pension schemes that get in trouble, such as the Allied Steel and Wire scheme, which has still not been resolved? If he has such a formula, perhaps it could be agreed to between the parties now, so that what is national responsibility, personal responsibility and company responsibility is accepted and we have a resilient formula that can be used for Equitable Life, Allied Steel and Wire and all those that go broke in the future.

[Bob Blackman]

I note the hon. Gentleman’s intervention. The key point is that the Equitable Life policy holders have been through the courts and through the parliamentary ombudsman, and the matter has been found in their favour. Maladministration clearly took place and a key decision was taken to put those policy holders back into the position that they would have been in had that maladministration not taken place. Clearly, other pension schemes are in trouble. There are a lot of pension schemes in trouble because the previous Prime Minister, when he was Chancellor of the Exchequer, raided private pension funds and thought that that was a golden opportunity. We must take that into account. That is not the case with Equitable Life policy holders, which makes this a different matter. We have to be careful about broadening out this subject to other pension schemes.