EMAG says it’s time to right the Equitable injustice.

Paul Braithwaite, General Secretary of EMAG Observer 21st December 2001

After eight long years the government has finally accepted that the Equitable scandal isn’t going to go away.

EMAG (Equitable Members’ Action Group) has been fighting this gross injustice since 2000. An estimated 50,000 letters sent by aggrieved investors and our many constituency meetings up and down the country have finally communicated the sufferers’ justified outrage to MPs of all parties and won over their support. The anger has been fuelled by the government’s largesse in the £4billion bail out of Icesave.

It seems as though last week was the turning point. The deferral of the government’s long-overdue statement on Equitable was good news because it almost certainly signified that the Treasury had realised that any plan to brush us aside yet again wasn’t going to work.

In July Ann Abraham, Parliament’s own independent Ombudsman recommended compensation. The EU Parliament had earlier called for prompt payment of compensation. This week the influential all-party Public Administration Select Committee has unequivocally endorsed the Ombudsman’s report. It was the 14th report into Equitable Life. All three enquiries looked to EMAG to provide the primary evidence on policyholders’ behalf.

The government having to address another big compensation bill at a time of financial meltdown is regrettable but does not negate our claim for regulatory failure for the decade up to 2001. That the Treasury has spent seven years obstructing justice for Equitable Life victims isn’t of our making. Indeed, had matters been dealt with properly at the time, the FSA would have been a different animal and the collapse of Northern Rock would arguably not have happened.

Since 1990 Equitable policyholders were victims of a shocking Ponzi scheme scandal. Not only did the financial regulators know it but they did nothing. After 1999 the FSA even contrived to keep the company open when it was insolvent, deliberately misleading the investors and covering up its own failures. If we had known about the true parlous state of Equitable Life at any time after 1991, which the regulators did know full well, we would not have put our money into Equitable in the first place – so the regulators failed us 100%.

The losses to our savings for pensions were crystallised with the swingeing cuts in July 2001 – which is when EMAG concluded that compensation from government was warranted, because the regulators had consistently failed in their statutory duties. EMAG’s well-evidenced claim for £4.6billion is only for those losses arising directly from the maladministrations identified by the Ombudsman.

In mid-January EMAG expects the statement will set up the tribunal proposed by the Parliamentary Ombudsman to oversee distribution of large-scale compensation. The government would be well advised to turn over a new leaf in 2009 and address Equitable swiftly, generously and honestly. Any further fudging or delaying devices could make it a very embarrassing election issue.

The individual chosen to chair the tribunal must be utterly impartial - not a government toady. It's time for the government to own up and pay up. In fact it’s far too late for the 32,000 who have died waiting for justice.