Equitable Life

Robert Neill Excerpts

Thursday 26th February 2015 Commons Chamber

[Robert Neill (Bromley and Chislehurst) (Con)]

I, too, congratulate the hon. Members who secured the debate. Like my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Member for Leeds North East (Fabian Hamilton), I have signed the pledge. This is not a phrase that often falls from my lips, but that was the right thing to do under those circumstances and it is right for Governments to keep their pledges. I know that there are constraints in Government and having served as a member of this Government I am conscious of the economic pressures, and I understand the point made by the hon. Member for Coventry North West (Mr Robinson) about the fact that periodically civil servants come to Ministers with rather convenient escape clauses, but the job of Ministers is sometimes not to accept such escape clauses.

I am speaking on the basis that this is a Government who are committed to markets and to stability and confidence in our markets. I believe in that. The financial services sector and insurance sector are a critical part of our markets. I speak as secretary of the all-party parliamentary group on wholesale financial markets and services. For the markets to work efficiently, there must be proper and secure regulation and when there is a failure in regulation there must be genuine certainty of recompense to those who have done no wrong, because otherwise honest and sensible investment is deterred. That is the risk if we do not do justice to the Equitable Life policyholders. What message would that send? We all say that it is right to invest prudently and wisely for one’s future and any such message would be against the philosophy of my Government and, I hope, against the philosophy of any responsible Government. In the long-term, it is in the interests of good economics and good financial planning that we do justice to the Equitable Life policyholders.

The motion is sensibly and moderately phrased. We are not saying that everything can be done at once, but that in the course of the Parliament this ought to be done. It might be that the proposal made by the hon. Member for Coventry North West is part of that. I will not be tied to an exact time frame, but it is particularly important that the oldest—the pre-1992 people—are given priority. It is also important to recognise that although the Government are picking up something that did not happen on their watch, part of being in government is that one has to deal with the consequences of what one inherits and has to do so fairly. Happily, thanks to the policies of this Government, the economy is improving. It is not unreasonable against that background to expect those people who have made a sacrifice, in that their fair recompense has been delayed, to share some of the fruits of that economic recovery.

[Mr Robinson]

I know that the hon. Gentleman did not mean to interject any sort of difference between party or Government, but what he said was not right. The lack of regulation and the failure of the policies happened under a Conservative Government’s watch. We must get away from mentioning Governments, as this affects all parties and all Governments over the period of the failure.

[Robert Neill]

I am sorry to disagree with the hon. Gentleman, but he misunderstands what I was saying. Regardless of party, there is an obligation on Government, and I must say that the 13 years for which there was a Government of which he was a distinguished member cannot be entirely ignored. We all must pick up what we inherit from our predecessors, of whatever party, and we must put them right. That is the key and that is why I agree that having done the history we need to move on and find a sensible way forward.

[Stephen Lloyd]

One of our profound frustrations was that the ombudsman made the ruling under the previous Government, which was sitting on a heck of a lot more money than this Government.

[Robert Neill]

My hon. Friend makes an entirely fair point. This should all have been sorted out before the Government came on to the scene. The question of who was to blame and why ultimately requires almost a Crichel Down sort of approach—we must all accept responsibility for what happens under regulators who were not politicians. We must accept that it was done and must now resolve it. Had it been resolved sooner, there might have been more money around to deal with the issue. However, given where we are now and that the economy is improving, we can certainly do justice to people through a sensible series of staged payments, starting with those who are in the greatest need and who are most vulnerable. It is reasonable to ensure in the course of the Parliament that proper justice is done.

Let me give a sense of the impact on individuals. I have one constituent who makes the point that having invested sensibly his income has effectively been cut by some £20,000 a year. To a pensioner, that is an awful lot of money and they have had to downsize from their long-established family home. Another constituent has an acknowledged loss of £61,000 and is some £47,000 adrift with the payments out. That is not fair for somebody who has worked hard and is now in no position to supplement their income for the future.

Another very elderly gentleman had to wait some 18 months—because, frankly, of ineptitude and lost correspondence—to even receive acknowledgement of his entitlement. He should not have to come to his Member of Parliament to escalate these matters. That is something that any sensible and well-run compensation scheme should deal with as a matter of course. I am sure we all hope eventually to overcome the difficulties for our constituents, but they should not be happening in the first place.

[Geoffrey Clifton-Brown]

I am sorry to reiterate the point I made in an earlier intervention, but one member of the group of people who came to see me was elderly and, if he dies, his widow will get only 50% of the 22% he is entitled to, which is already pretty measly. Is it not incumbent on the Government to make payments now, in full, so that at least people can have that small amount of money to pass on to their dependants?

[Robert Neill]

On that basis, it is particularly important that we deal with the pre-1992 people, who are generally the oldest, but it is also important to have a proper, staged programme in place to deal with everyone.

When I was a lawyer, I accepted, as I think anyone would, that it was not possible to deliver for a client everything in their legitimate claim, because money might not be available or there might be delays. A settlement would be reached and a sensible discount accepted as a resolution, but I do not think that anybody would regard 22% as being a fair settlement of a claim. The Minister is an honourable woman and she must tell us today that she recognises that we are obliged, as a matter of honour, to give the people affected a sum much closer to that of their undisputed loss. As has been said, the quantum is not in dispute—it is a proven fact. We now need to say that, because of the improvement in the economy, we can do better than we were originally able to, for whatever reason. That is the honourable and legitimate thing to do, and it would also restore faith in an important element of our financial sector.

I agree with the hon. Member for Coventry North West and I hope there is enough that we can all agree on. The wording of the motion itself gives the Government the flexibility, provided there is good will—I am sure there is—to achieve its aims in a fair way for the people who have lost out through no fault of their own.