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Equitable Life

November 25, 2008

Equitable Life

Mr. Mark Field (Cities of London and Westminster) (Con): I congratulate the hon. Member for East Dunbartonshire (Jo Swinson) on securing the debate. As she knows, this has been a live issue for a considerable period of time. I spoke about it quite a lot in my first year as a Member of Parliament in 2001-02, not least because one of my constituents, Sir Gordon Downey, was a leading light in the policyholders’ group, and he made contact with me at the time. The issue seemed to die off. There was a lot of debate in the early part of the century, and then again in recent months.

Like many hon. Members, I have been sent letters from 50 or 60 constituents who are desperate to know whether the Government will implement the ombudsman’s recommendations. Some have lost many hundreds of thousands of pounds. Although other losses have been much more modest, they are, none the less, more significant because they are suffered by people living on a fixed income.

The much-delayed report was very comprehensive and made it clear that policyholders should be compensated. After the ombudsman’s rigorous investigations, she gave all the parties concerned ample opportunities to contest her findings. She concluded that the regulators were guilty on 10 separate counts of maladministration. I believe that it is incumbent on the Government to honour that conclusion, because many of the regulatory failings took place on their watch, and to set up a proper compensation scheme.

It is easy to make comparisons with what happened in relation to Northern Rock and the other £37 million bail-out. From the Government’s perspective, I can see that there is a distinction to be drawn between depositors in banks and policyholders in organisations such as Equitable Life. Although I am not suggesting that the two are entirely comparable, I hope that the Minister will have some sympathy with the plight of Equitable Life policyholders. As the hon. Member for Leeds, North-West (Greg Mulholland) said, the matter would have been treated somewhat differently had it not been for the fact that the pensioners are regarded as mainly a middle class and relatively affluent contingent. I accept that depositors in banks should be treated differently, but what is unacceptable, as the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) pointed out, is the Government’s delay in making any decisions in relation to policyholders. Many are dying while waiting for resolution of this sad affair.

I have made my position on the matter clear to the shadow Chancellor. I asked that my party maintains its support for compensation should it be elected to Government. He responded by saying that he has called on the Government to admit their responsibility, issue the apology for which many have called and ensure that a payment scheme is created, which is what the ombudsman has demanded. My hon. Friend also stated that if the Government do not do that, a Conservative Government will do so as a matter of priority.

Mr. Christopher Chope (Christchurch) (Con): That is one of the most significant and helpful comments that has been made during this debate—that an incoming Conservative Government will do the business that the Government seem so reluctant to do.

Mr. Field: I hope that I have made the point forcefully enough, but it has been reinforced by my hon. Friend.

I shall touch briefly on some of the heartfelt comments from one or two of my constituents. Mr. MacDermott of Motcomb street in Belgravia said: “I cannot claim poverty but I can safely say that at 77, 1 might well have been happily retired rather than continuing working so as to provide for my wife and two university-aged children.”

Mr. Ronald Moss of Westbourne terrace in Bayswater said that he retired in 1996. In the following financial year, his gross monthly retirement income from Equitable Life was £413.82. Exactly 10 years later, the amount had dropped to £194.83, and that was an overwhelmingly large element of the money on which he lived. He is receiving 50 per cent. less in this decade at a time when the standard of living is rising by about 3 per cent. a year.

Mrs. Valerie Walsh of Bedfordbury in Covent Garden said: “If I had received my full pension pot I would not now be struggling just about the poverty line.”

Because she earns that relatively modest amount it is impossible for her to claim any of the housing help and benefits that are available to lots of pensioners.

Mrs. Monica Harkin of Vincent square said that she left the Foreign Office in her mid-40s and was persuaded to transfer a civil service pension to Equitable Life, not in the expectation of a huge pension pot at the end of her 41-year working life but simply because it was a safe and well-run organisation. It has turned out to be a foolish decision. In addition to the pension, she invested a large amount in the society. Her combined losses, which became apparent at the point of her retirement, were astronomical.

I could mention a number of other constituents, but I know that other hon. Members want to speak. Most of the people who have lost out—those who are still alive because many have died during the squabbling—do not have the option of returning to the workplace to make their way in life. They are often in their 60s, 70s or 80s and the Equitable Life money was the most important part of what should have been a relatively relaxed and quiet retirement.

I hope that the Government will consider the issue as a matter of urgency. Figures have been bandied around—a £4.5 billion package has been mentioned. Most Equitable Life policyholders to whom I have spoken are quite realistic about the numbers. They do not expect to get everything back because it is difficult to quantify. None the less, the fact that it is difficult to quantify, as my hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright) pointed out, should not mean that there is no opportunity whatever to obtain some compensation, which is urgently required by many of our constituents.