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

Correspondence: 21/08/2007 - EMAG protest letter to Treasury at lack of response to EQUI

21st August, 2007

Rt Hon Alistair Darling
Chancellor of the Exchequer
HM Treasury.
1, Horse Guards Road
London SW1A 2HQ

Dear Chancellor,

A response to EQUI is long overdue

  1. This is written in the hope that your new ministerial line-up at the Treasury will bring a fresh approach to a problem that has festered to the detriment of the reputations of the UK regulators and the financial service industry alike for far too long.

  2. Almost exactly six years ago, Dr Vince Cable and I hand- delivered a letter to the then Chancellor about the plight of Equitable Life sufferers – just as we are doing this time. Today, we are joined by MEP Diana Wallis, the Rapporteur of the EQUI European Parliament’s recent report into the regulation of Equitable Life.

  3. The letter in 2001 contained the following:

    “Time and again the series of regulators could and should have stepped in to protect policyholders. The regulators have failed policyholders and, along with management, they effectively concealed and condoned Equitable's increasingly parlous state……..Thus far, the Treasury has sought to distance itself from the Equitable. ………….There is no visible evidence that the FSA has been active on behalf of policyholders since closure despite, arguably, several circumstances in which it should have…………………. We maintain that by not acting the FSA has failed policyholders' "reasonable expectations"……. We should not wait for a post mortem - it's time for the Treasury to be proactive.”

    Plus ça change, plus c'est la même chose.

  4. In the summer of 2004, frustrated and feeling that we were being denied justice in the UK, EMAG set about preparing a Petition to the EU Parliament. This was lodged in December 2004 and presented to the Petitions Committee the following September. The result was the setting up of a special committee of inquiry into the UK’s regulation of Equitable for the period following the implementation of the Third life Directive of 1993. The EQUI committee of 22 MEPs met 15 times over 18 months and took evidence from dozens of witnesses, including representatives from the Treasury, the FSA and the GAD.

  5. The resulting 385-page report was debated at length in the full Plenary of the EU Parliament on 19th June and then adopted by a quite extraordinary and crushing majority of 605 in favour, with only 11 MEPs voting against. You will be aware that the Single Market Commissioner Charlie McCreevy accepted and supported the report’s findings on behalf of the European Commission and is acting upon it.

  6. The report is highly critical of the UK Government and contains 47 recommendations, many of which were aimed directly at the UK. European citizens in all 27 member states might reasonably expect the UK to show respect and leadership in addressing these recommendations. Notwithstanding, in the last two months there has been not a peep of response from the UK Government, which shows breathtaking contempt for the European Parliament.

  7. On the day of the EU debate a British Government spokesperson was reported as saying that it would be inappropriate to comment until the Parliamentary Ombudsman has reported on Equitable. This is as disingenuous as it is unacceptable.

  8. The Treasury appears to have found ways of causing three very major delays in publication of the PO report which the Government, thanks to the Treasury’s filibuster 500 plus page response to the PO in April, must know is now very unlikely to report in 2007. This, despite the PO report having been instigated (in the face of submissions against by the Treasury and the FSA) already more than three years ago and the report having been first presented verbally to The Treasury in January 2006.

  9. Furthermore, the Ombudsman’s report has minimal overlap with the EQUI report. The PO has absolutely no remit with regard to European Law or the single European Market, which are the central issues addressed by EQUI. Indeed, the PO’s investigation manager (Iain Ogilvie) gave evidence to the Brussels’ Parliament explicitly to confirm this. Furthermore the PO cannot address the position of policyholders who were resident in other EU member states such as Ireland and Germany.

  10. EMAG, as representative of present and past policyholders, asks that you as the new Chancellor ensure a comprehensive response to the EQUI report and stop the Treasury using the obfuscating excuse of “waiting for the PO’s report”, when its remit is totally different and it is certainly many months from publication.

  11. The fact is that, year after year, since this scandal became public in 2000, large numbers of Equitable sufferers have died or are managing their retirement with less than they had been promised. A circumstance that EMAG submits arose because the series of UK regulators throughout the 1990s were asleep at the wheel.

  12. EMAG hopes your Chancellorship will herald a new approach and that Ms. Ussher will relent and agree to an early meeting with us to discuss breaking this seven-year log-jam.

Yours sincerely,

Paul Braithwaite
General Secretary of EMAG Ltd
cc Kitty Ussher MP, EMAG website