Govt Equitable Life response torn apart
By politics.co.uk staff
The parliamentary ombudsman has savaged government inaction over the millions of Equitable Life customers who lost their savings when the firm collapsed.
Ann Abraham called the government response to her suggestions about how to pay back the customers last year “deeply disappointing”.
The government asked a judge, Sir John Chadwick, to review how compensation should be paid out, but Treasury comments suggesting compensation would go to those who suffered “disproportionate impact” led many to believe the payments would be means-tested.
“Whatever the outcome of the work to be done by Sir John, it is clear that not everyone who has suffered injustice will be eligible for a payment and that not all of the injustice suffered will be put right,” Ms Abraham said.
“The injustice I identified in my report will not therefore be remedied as a result of the government’s response.”
She added: “The government’s response to my report was deeply disappointing. It provided insufficient support for the rejection of my findings of maladministration and injustice.”
Mark Hoban, Conservative shadow financial secretary to the Treasury, said her criticism struck “at the heart” of the government’s handling of the collapse.
“She attacks the government’s cherry picking of her findings and recommendations and as a consequence policyholders are continuing to be denied justice,” he said.
“She also rightly criticises the lack of a clear timetable for payments to be made to policyholders. The government are failing Equitable’s policyholders and they should be ashamed of their actions.”
Liberal Democrat Treasury spokesman Vince Cable has tabled a cross party early day motion with Labour MP and select committee chair Tony Wright and Conservative frontbencher Andrew Tyrie supporting Ms Abraham.
“The government has used every cynical trick in the book to duck its responsibilities to Equitable Life policyholders,” Mr Cable said.
Responding to Ms Abraham’s report today, a Treasury spokesperson said: “The government has accepted that maladministration did take place and that is why we have apologised and why we have asked for independent advice from Sir John Chadwick so that we can set up a payment scheme that is fair to both policy holders and taxpayers.
“While it is clear that the process may take some time, Sir John has been asked to report back as soon as possible and to provide interim reports as his work progresses. We expect to receive the first report in late spring.”
Earlier this year Yvette Cooper, chief secretary to the Treasury, warned compensation could take up to two more years to be paid, with any pay-out balancing the faults of Equitable Life and regulatory failures along with the costs to the taxpayer.
The further delay means many of those waiting compensation will never see it.
The Equitable Members Action Group (EMAG) estimate 15 victims of the scandal die every day.
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