Shabby and shameful: Govt attacked over Equitable Life refusal
By Alex Stevenson
The government’s refusal to accept ombudsman recommendations over compensation for Equitable Life policyholders led to sustained criticism in Treasury questions this morning.
Last week the public administration select committee (Pasc) described the government’s plan as “morally unacceptable”.
Regulatory malpractice led to the insurance firm’s near-collapse in 2000. Parliamentary ombudsman Anne Abraham’s report on the failings, published in July 2008, called for the establishment of an independent regulatory scheme.
The government has refused to accept all of her recommendations, however, meaning only some policyholders will receive compensation.
Treasury minister Ian Pearson insisted to the Commons today that “the government doesn’t depart lightly from any of the ombudsman’s findings”.
He said he was “very disappointed” with the Pasc committee’s failure to understand the arguments put to it.
“What we are saying is we want to help people move forward,” Mr Pearson said.
“The fact we have a disagreement with the public administration select committee won’t deflect the government from moving ahead with all speed.”
Tory MPs attacked the government’s treatment on the issue, however.
Sir Patrick McCormack said Mr Pearson “should be deeply ashamed of himself because he is bringing both the government and the whole system into disrepute”.
Sir Nicholas Winterton called on the Treasury to “speed up this process in order to help these people to give them the benefit of their prudence and responsibility”.
And frontbencher Mark Hoban said the “shabby treatment of policyholders” reflected the government’s overall approach to the issue.
Mr Pearson added: “We have to do the right thing in the right way and we will do that as quickly as possible.”