(7 years, 5 months ago)
Commons ChamberI start by associating myself with the earlier comments about yesterday’s terrible events. I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Member for Leeds North East (Fabian Hamilton) on securing this important debate. It is fair to say that their tireless work on this issue and their involvement in the all-party parliamentary group for justice for equitable life policyholders are of great importance to many of our constituents up and down the country. Hon. Members from across the House have done a great deal for their constituents on this matter. It has been a thoughtful debate, and I have listened carefully to the individual cases that have been mentioned. I am also grateful for the opportunity to set out what the Government have done to address this long-standing issue.
This topic has a long and well-documented history, which I do not propose to go over in my limited time. Instead, I will focus on the action we have taken to make payments to the people affected, and these figures are well known. The ombudsman’s findings assess the loss from Government maladministration to be £4.1 billion, and it is worth noting that that is significantly more than the evaluation commissioned by the then Labour Government. That report, known as the Chadwick report, rejected some of the ombudsman’s findings and concluded that only £340 million should be paid to policyholders.
This Government, in contrast and despite the constraints facing the public purse, have agreed that £1.5 billion will be made available, tax free, for payments to eligible policyholders. We consulted carefully on how that £1.5 billion should be paid out and reached the conclusion that we must pay the with-profits, or trapped, annuitants in full. As a result, that group will receive an annual payment for life, with the total cost of those payments assessed to be around £625 million. The £100 million contingency fund, which is often referred to, is to ensure provision for policyholders who exceed the life expectancy forecast. On the advice of an independent commission, the remaining £775 million of available funding was distributed pro rata to other policyholders, representing a payment of some 22.4% of their relative loss. I recognise that, for many, that was disappointing, but it is about striking the right balance while also taking into account the position of the public finances and fairness to all taxpayers.
The point about affordability was raised explicitly by the ombudsman in her report, in which she stated that it was appropriate to take into account the impact on the public purse when considering the funding of the payments. Indeed, the ombudsman has written to the all-party parliamentary group on Equitable Life about the level of funding and said that the Government’s decisions on affordability cannot be said to be incompatible with her report. I also understand it has been suggested that, as the economy improves, further funding should be made available to the payment scheme.
I accept that the decision on funding is not incompatible with the ombudsman’s report, but that is not to say that the decision follows the spirit of the ombudsman’s report or that it is right.
I repeat that this is about striking the right balance between the position of the public finances and fairness to all taxpayers, and I will cover that point in more detail as I proceed.
I was talking about further funding being made available to the scheme, but with debt at its highest level since the second world war, tackling the deficit and getting debt falling are challenges that call for long-term discipline, which is why we have no plans to reopen the payment scheme or to review its level of funding.
(13 years, 1 month ago)
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The Department took the view—this is not a unique case—that sometimes it is better to be a little more generous and sensible in consultation than to rush at fences. I am sure that by the time my hon. Friend has been in the House for as long as my hon. Friend the Member for Mole Valley (Sir Paul Beresford), he will understand that, sometimes, taking things at a gentle pace gets a better end result. We want this to work, and the reason why we want it to work was encapsulated in the speech by my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart). It is essential that we have a system that is both fair and workable in the interests of the settled community and of the Traveller community, because it is right to say that the vast majority of Travellers are law-abiding. The majority of Travellers want to live on authorised sites and have social issues that need to be addressed, so it is as much in their interests as anyone else’s that we get something that is fair.
There is a very strong feeling that there is unfairness in the current system, which has caused the Government to take a number of steps to deal with the problem, all of which have been legitimately highlighted by my hon. Friends. Let me make clear what the Government seek to do. I know that time will not permit me to deal with every one of the legitimate points raised by my hon. Friends, but I undertake to write to them setting out some of the specific details for which they have asked.
I start with what the Government are doing, given the background. There is a real problem. There is a genuine sense in the country that the system is not fair and that it works against everyone’s interests. What are the Government seeking to do? First, we are committed to abolishing the regional strategies under the Localism Bill, which clearly requires primary legislation. It is frustrating for many that it should be necessary to take decisions in accordance with existing policies until they are revoked, but that is the law. When dealing with planning casework, Ministers have to act in a quasi-judicial fashion, but we are taking steps to abolish the regional strategies and the targets that go with them.
The Localism Bill also contains the primary legislation necessary to provide stronger enforcement powers to tackle unauthorised development. The Bill also contains important proposals to limit the opportunities for the abuse of retrospective planning permission. My hon. Friend the Member for Mole Valley and others have referred to that important point. We are determined to ensure that retrospective permission is available if there has been a genuine mistake but not in cases of cynical manipulation, in which members of any community may be involved—I have come across cynical developers, too. We are taking steps to deal with that.
I shall give way once more, but my hon. Friends will appreciate that I need to make progress in fairness to other Members.
Does the Minister recommend that the consultation on legislation to deal with squatting should also cover unauthorised encampments? It seems to me that the two are closely linked.