Equitable Life (Payments) Bill

Priti Patel Excerpts

Tuesday 14th September 2010 Commons Chamber

[Priti Patel (Witham) (Con)]

I pay tribute to my hon. Friend the Member for Congleton (Fiona Bruce) for her outstanding maiden speech, and for the beautiful tour of her scenic constituency.

Right hon. and hon. Members have a big responsibility to deliver a fair resolution to policyholders who have been affected by this scandal of maladministration by the regulators. As we have heard, when in opposition, Conservatives and Liberal Democrats quite rightly pursued and scrutinised the previous Government, and sought to hold them to account for neglecting Equitable Life victims and for failing to establish a long-overdue compensation scheme. We rightly acted in victims’ interests to support them as the previous Government dithered, delayed and dragged their heels. Disgracefully, as we have heard, they left many policyholders to pass away, unable to receive the justice that they deserved. That applies to a number of families in my constituency. By contrast, we are passionately committed to delivering a fair, transparent and independent payment scheme for the losses that people incurred because of that dreadful regulatory failure. Obviously, the Bill is a strong, positive measure and a step in the right direction.

It is important to remember that Equitable Life policyholders did exactly the right thing. They chose to save for their retirement so that they could have a decent quality of life in their later years. One of my constituents wrote to let me know of a loss of something like £130,000 as a result of being forced to buy an annuity. There are some maths involved, but the loss works out at around £80,000 per year, which is a substantial amount of money to anyone, but particularly to a pensioner trying to make ends meet in this day and age. He is more than frustrated; he is desperate beyond belief to find out the next steps and what, effectively, he will get. Another of my constituents has had to rethink their plans for retirement off the back of their losses, and I could reel off a list of more than 100 names of constituents who have contacted me on this matter.

[Heather Wheeler (South Derbyshire) (Con)]

Will my hon. Friend give way?

[Priti Patel]

I will not, if my hon. Friend does not mind.

The 1.5 million policyholders affected and their families desperately need certainty, finality and, frankly, closure on this lamentable situation. Although policyholders in my constituency broadly welcome the Government’s decision and their commitment to begin making payments through the independent scheme next year, it is understandable that, owing to the actions of the previous Government, they remain sceptical. They have many probing questions for the Minister and the Government, as many colleagues in the House will recognise.

Transparency in the scheme is of course essential—the Minister referred to that—and although payments will begin next year, my constituents want to know when the process of making payments to all affected policyholders will be completed, as we have heard from other hon. Members. Let us be realistic. Processing payments is a challenging task made all the more arduous by the delays caused by the previous Government and the atrocious financial situation that we face, which we constantly hear about, but that is why it is important that all policyholders have their cases resolved promptly, in addition to receiving payments as soon as possible.

Where policyholders are not fully compensated for their losses, it is important that they are given clear reasons why not, and that they have an opportunity to restate their case when that is an option. I should welcome clarification from the Minister on any appeals process for policyholders who feel that an initial award by the independent commission is unfair to them.

The scheme will also need to address the implications for tax, tax credits, other benefits and means-tested benefits. Frankly, in view of the bureaucracy associated with Her Majesty’s Revenue and Customs and the current crisis of HMRC demanding money back from hard-pressed taxpayers and pensioners, policyholders in my constituency are genuinely concerned that although they might receive some compensation, they might also get a letter from HMRC demanding money back. After a decade-long struggle to receive justice and payment, the last thing that those policyholders need is a letter on the doorstep from a heavy-handed bureaucrat demanding money back.

Lives have been ruined and it is scandalous that, two and a half years after the ombudsman reported, six years after Penrose and almost a decade after the whole scandal came to light, justice has yet to be delivered. It is right that the Government should tackle the issue and the Bill is a great step forward. Fairly compensating those who have lost out has to be a priority for the Government. Having seen the shambles of the previous Government, I welcome this Government’s commitment to policyholders. The Bill is an absolute must and is long overdue.