Equitable Life (Payments) Bill

Stephen Lloyd Excerpts

Tuesday 14th September 2010 Commons Chamber

[Stephen Lloyd (Eastbourne) (LD)]

I, too, congratulate the hon. Member for Congleton (Fiona Bruce) on her maiden speech. In the spirit of fairness, I also pay tribute to the right hon. Member for Holborn and St Pancras (Frank Dobson) and the hon. Member for Leeds North East (Mr Hamilton). Much of their approach to this issue showed that there is an element of fairness among Labour Members, and I appreciate that.

We all know why we are here today, and we all know the financial constraints that we are facing. I should like to concentrate on three key proposals on how we can bring proper and fair closure to this whole lamentable episode. The first issue is regulation. Clearly, Members on both sides of the House recognise that regulation completely failed. To an extent, that gives us a very strong moral case. Irrespective of the financial challenges the country faces, the comprehensive failure of the regulators was so shocking that it should provide enough impetus for our coalition Government to go the extra mile to ensure that Equitable members receive the appropriate compensation.

I had a meeting with EMAG yesterday, and one of its representatives told me that—I cannot vouch for whether this is absolutely true—because the regulators apparently knew a good few years before the company hit the buffers that its financial model was in such a poor state, they withdrew their pensions from the Equitable Life package. If that is true, it is absolutely disgraceful. It demonstrates what an atrocious job they did and emphasises that there is a very strong moral case for the payment of fair and appropriate compensation, irrespective of the financial challenges we face.

The second issue, which has been raised by several speakers—I concur, and I hope that my hon. Friend the Minister is taking this on board—is about staged payments. We all recognise the financial problems that the country faces—I will not bang on about Labour’s responsibility for that—and EMAG does too. I implore my hon. Friend to look favourably on the staged payment process—first, so that payments can be made immediately for people in the most desperate need; we all agree that that is essential. Equally, the advantage of making staged payments over the next 10 years, as EMAG accepts, is that it will be much more cost-effective and should allow the Treasury to manage fairer payments without causing too much grief to the Exchequer.

Thirdly, I urge my hon. Friend the Member for Chichester (Mr Tyrie), who is Chair of the Treasury Committee—he is no longer in the Chamber—and my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), who is Chair of the Public Administration Committee, to invite the ombudsman to give evidence to their Committees, because her report, in its detail and expertise, completely blows the Chadwick report out of the water. That would, I hope, inform those Select Committees to the extent that they would be able to give a report to the Government that carried a considerable amount of weight.

In conclusion—I am determined to keep my contribution short because many of my colleagues want to speak; I hope that the Deputy Speaker will remember that when I next stand up to try to speak—we now have an opportunity to right a grave injustice. It is a grim situation. In Eastbourne, I have probably received more than 200 letters from people who have been affected. We are not talking about wealthy people; these are people who have scrimped and saved for most of their lives and through no fault of their own, and through the shocking irresponsibility of the regulator throughout the ’90s, have ended up in a desperate state. There is a profound moral duty to resolve the situation as quickly as possible. I welcome the coalition Government’s determination to honour their commitment. I am confident, because I am one of nature’s optimists, that it will involve a higher sum than EMAG may fear; and if it is done over a staged process, it may even be a lot closer to what we all want and consider to be right.