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

Documents: 15/07/2003 - EMAG briefing John McFall, chairman of TreasCom

EMAG briefing John McFall, chairman of TreasCom
(plus George Hodgson, Treasury committee specialist and the secretary to the Treasury select committee):
15th July, 2003 at Portcullis House

EMAG asked for TreasCom to reconvene on ELAS urgently to build on the excellent interim report of the committee, now more than 2 years and no evidence having been taken since Nov 2001.

EMAG suggested that there is considerable cause for concern POST Penrose's remit, which ends Aug 30th 2001:

The compromise scheme
The FSA acting as shadow director of ELAS
The unilateral suspension of GAR rectification
The unsatisfactory treatment of WP annuitants
The interface between the FOS and the FSA
The disparity of treatment by the FOS of the society vs complainants
The finding of the FOS that the late-joiners DO have a superior claim, contrary to the FSA report to all members in Dec 2001

We suggested that MPs have been seen to be looking after themselves, leading to creeping voter hostility. I suggested that Pensions is rising steadily towards to top of the political agenda for the next election.

The belief that there is a cover-up is fuelled by the fact it's now three years since H of L, with virtually nil progress.

The unilateral removal of the GAR rectification scheme because it was proving too expensive is, I suggested, an utter outrage. Only 4,000 out of tens of thousands have so far been settled and the others have been told that they won't get the same treatment. How CAN the FSA possibly have condoned this freeze? Further, 50,000 possible drawdown mis-selling cases have been delayed because the FSA has granted to society a waiver until the end of 2004. WHY?

There is a crisis of confidence in pensions and ELAS is at the heart. EMAG suggest it would be better to address rather than continue to sweep it under the carpet. The PO report, less critical than the FSA's own Baird report, is actually counter-productive in exonerating the FSA - because it fuels the view that "light touch" regulation meant NO regulation, or than caveat emptor. But worse than that because one had a right to full and accurate information and the knowledge that there was no policyholder protection would have made us all much more wary.

It seems no-one is overseeing Conduct of Business. TreasCom, with its broad role, should look closely at this total absence of accountability.

Indeed, since N2 (30th November, 2001) the FSA is accountable to nobody. It was purely ad hoc and good fortune that the FSA/John Tiner was caught out over splits by TreasCom - providing convincing evidenced of the need for checks and balances.

The UK is out of harmony with EC, where regulators are held to be responsible for negligence, per several recent cases (Germany, France, Italy and, most recently, Holland).

In Australia a recent financial failure that paralleled Equitable was handled in an exemplary fashion - showing the UK how a thorough, honest investigation can be undertaken and turned around, with swift retribution.

On Penrose: It is John McFall's impression that Maxwellisation will dictate that the Treasury will not receive the report before the end of this Parliament at the end of September and then it will be up to the Treasury when to publish.

I pointed out that the secretary to the Penrose inquiry (Hugh Burns) has assured EMAG that the Penrose report is being written with respect for confidential material in a form that can be published, which directly contrasts with Paul Boateng's assertion in the Commons on July 7th that confidentiality considerations may dictate a need to edit.

Paul Braithwaite
15th July, 2003