By Daniel Kawczynski MP.
When Equitable Life, the word’s oldest mutual insurance company (Established in 1762) nearly collapsed in 2000 it had to greatly reduce the size of payouts to its customers. Some customers, including constituents of mine, saw their savings reduced by as much 50 percent. These people were not just let down by the company they had trusted to assure their quality of life after retirement, they were also let down by the Labour government who were supposed to ensure the proper regulation of companies like Equitable Life.
In the wake of various enquires into the Equitable Life scandal, the Parliamentary Ombudsman reported last summer that there was evidence of “serial regulatory failure” on the part of the now defunct Department of Trade and Industry, the Financial Services Authority and the Government Actuary’s Department. The Ombudsman ultimately made two recommendations: that the government should apologise to Equitable Life customers who have lost out, and that they should establish a system of compensation to help those who have lost their savings.
It has now been almost a year since the Ombudsman originally made her recommendations, and whilst the Government has apologised, those who lost money in Equitable Life are still no closer to being properly compensated by this Government for their loss. Having taken over six months to respond, the Government have come to the table with an almost total rejection of the ombudsman’s report, and have offered a piecemeal hardship fund in the place of the compensation fund recommended by Parliament’s Ombudsman.
Since my election as Shrewsbury’s Member of Parliament in 2005 I have been contacted by numerous constituents who have lost money in Equitable Life. I am not alone in this, and I know that many of my Parliamentary colleagues, on both sides of the House, have constituents who have lost money in equitable life. Millions have been affected by this and I am determined to see that these people who had planned so responsibly for their retirement have this grave injustice put right by this Government.
Last week I established a new All Party Group; the All Party Group for Justice for Equitable Life Policy Holders. The group’s first meeting was held on Monday the 1st of April and the meeting saw the election of myself and Labour MP Dr Ian Gibson as the Group’s joint Chairmen. The group has already attracted real cross party support, and I am confident that it will provide a perfect forum in which to hold the Government to account on the issue of properly compensating Equitable Life policy holders who lost money as a result of the Government’s maladministration.
The attending MPs were given a short presentation by the Equitable Life Members Action Group (EMAG) which went behind the Government’s spin and revealed that the compensation package that the government have so far agreed to will exclude up to 90% of the adversely affected Equitable Life customers. This is patently an unacceptable situation, and the Government’s unwillingness to take the recommendations of the Parliamentary Ombudsman on board place the executive branch of our Government squarely at odds with Parliament. The Ombudsman reflects the views of Parliament, and so in disregarding her decision this Government has effectively disregarded the will of Parliament.
This is a situation which should not, and will not stand. I am determined to see the Government put things right. EMAG have agreed to provide administrative support, and I am confident that with their help this group will provide a real cross party route to justice for Equitable Life policy holders.
