EMAG

The independent action group for current and ex Equitable Life policyholders, funded by contributions.

Equitable Members Action Group

Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK

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Press Releases: 08/03/2004 - EMAG's immediate response to Ruth Kelly's statement 8th March on Penrose

8 March '04 - Press Release: EMAG's immediate response to Ruth Kelly's statement 8th March on Penrose:

"It was depressing to watch ruthlessly ambitious Ruth Kelly with the unenviable task of selling the unsellable, whilst Gordon Brown passed her notes. Not once has this chancellor had the common decency to address the plight of Equitable Life's policyholders. As an annuitant I am tired of hearing Ruth Kelly's pathetic claim that she sympathises, whilst effectively telling us to sue ourselves. Gordon is damned by his silence."

Ann Berry, annuitant and EMAG member.

Unfortunately the remit set Lord Penrose by the Government precluded Penrose from either apportioning blame or recommending compensation, so it was utterly disingenuous for Ruth Kelly to say that the report did not blame regulators or recommend compensation. EMAG applauds Vince Cable's constructive suggestion to ask Lord Penrose to complete a three month further study to focus on compensation.

Whilst this Government was not to blame for what happened to ELAS during the 80s and 90s, it cannot be allowed to simply leave the blame solely with the management of the Society and previous Conservative Governments, whilst cynically continu0ing to turn its back on the policyholders that were failed by the lack of regulation during two decades.

"Light touch" regulation is a post rationalisation that is neither present in the primary legislation (The Insurance Company's Act 1982) nor in the EU Third Life Directive. Policyholders believed there was a government-backed guaranteed implicit in the words: "Regulated by the Treasury" and investors paid for regulation. The Treasury is callously leaving one million policyholders to swing in the wind.

The Penrose report appears to reach completely contrasting conclusions to the Parliamentary Ombudsman about the FSA's regulation in 1999/2000, which further undermines the credibility of any further study by that office. The PO's remit is also hopelessly hamstrung in that it cannot look at 70% of the bodies and issues - including Conduct of Business, Equitable Life, the GAD etc and is structured to investigate individual's complaints.

Paul Braithwaite said:

"After 30 months, the Penrose Inquiry gave the Treasury the chance to come clean. For six years Gordon Brown and his coterie has fully understood the depth of problems at Equitable Life, yet it has used every trick in Sir Humphrey Appleby's book to cover-up and to avoid compensating for what is now proven to be regulatory failure. By continuing to tough it out further damage to confidence is inevitable. Pensioners and savers are learning that Gordon Brown's behaviour is toxic to their retirement prospects."

Paul Braithwaite
8th March, 2003.