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: 28/10/2008 - MP Jo Swinson's speech (WITHOUT the interruptions) to the Westminster Hall 90-minute Adjournment Debate, 25 November 2008

A copy of MP Jo Swinson's speech (WITHOUT the interruptions) to the Westminster Hall 90-minute Adjournment Debate she sponsored on EquitableLife 25th November, 2008

"I am very glad to have the opportunity to lead this debate on Equitable Life today.

There can be few, if any, Members in this House who have not been contacted by constituents affected by the Equitable Life saga. Given this scale of interest, I am pleased, but not surprised, to see such a good turnout for this debate in Westminster Hall this morning.

When Equitable Life was forced to default on its obligations to policyholders in 2000, we saw the breakdown of the world's oldest mutual life insurer. It was a humiliating moment for a venerated institution.

The shockwaves caused by the failure of a body as huge as Equitable Life are considerable indeed.

Parliamentary Ombudsman Ann Abrahams' report 'Equitable Life: a decade of regulatory failure' is the 13th to have been published.

The post-mortems that have taken place over the past 8 years have found fault both with this Government, and the Conservative Government that preceded it.

Beyond the blame games, however, one thing is clear - Equitable Life policyholders continue to press their case, in the hope of seeing justice done.

In opening today's debate, I will highlight the Government's cynical tactic of delay over Equitable Life, and the responsibility that the Government has to support the role of the Parliamentary Ombudsman. I will also look at the case for Equitable Life compensation in the context of the bank bailouts.

The Ombudsman's report contains 10 findings of maladministration against the DTI, Government Actuaries Dept and Financial Services Authority.

It makes two recommendations: firstly, that a full apology to be given to policyholders and secondly, that the Government "should establish and fund a compensation scheme".

The language used in the report pulls no punches and its recommendations are clear, precise and straightforward.

The Government has spent years adopting a siege mentality towards Equitable Life, but the Ombudsman has shown that they can't hide forever.

Ministers must now accept the Ombudsman's recommendation that "wrongs should be remedied".

Before I move on, I would like to pass on apologies from my hon friend the member for Richmond Park, who is being kept away from today's debate by a long-standing constituency engagement. The Minister will know that she follows these issues very closely and in addition to her apologies, she asked me to pass on a request to the Minister for a meeting with a group of Members who have a large number of constituent cases on Equitable Life. This seems like a very sensible request and I hope the Minister can respond to that positively in his remarks later.


The Government's response to Equitable Life is overdue.

Not just overdue in terms of the Parliamentary Ombudsman's report, which they said they would reply to this autumn.

But nearly 8 years overdue, because ever since Equitable Life came to near-collapse in 2000, they have tried to put-off, postpone, defer and delay the actions needed to bring the sorry saga to a close.

As I have already mentioned, Ann Abrahams' latest report is the 13th report on Equitable Life since 2001. We have heard from the Treasury Select Committee, Lord Penrose, the Corley Institute of Actuaries, the European Parliament and many more. And still, the Government has failed to act to help Equitable Life policyholders, despite now facing a charge of maladministration from the Ombudsman.

Lord Penrose was handed the task of reporting on Equitable Life, but was given terms of reference that prevented him from finding anyone to blame. An opportunity for closure on the case, missed.

Furthermore, when the Financial Secretary to the Treasury came to the House to make a statement on the publication of Lord Penrose's response, she made a point of the fact that the report did not blame regulators or recommend compensation, despite being fully aware that these were outside the terms of reference given to Lord Penrose. Again, the Government tried to wriggle out of taking responsibility for dealing with the situation.

But far from bringing closure to the situation, the Penrose findings prompted the Ombudsman to seek to change the law so she could pursue a more thorough, wide-ranging report, going back much further than her initial investigation.

Ann Abrahams initially stated that she hoped to complete her investigation by 2005, but in fact the report took 4 years to produce. This was not helped by Government obstruction - in 2006, the Ombudsman revealed that she had been delayed by 9 months waiting for the DWP to comply with requests for information.(PB CORRECTION - NOT THE DWP)

So, after a long wait, the Ombudsman's report arrived in July. The Government promised to reply by the autumn, and when pressed on this at Business Questions, the Leader of the House said:

"The Parliamentary Ombudsman took 4 years to construct her report and, as the hon. Lady said, the Government have been considering it for 4 months."
(30 October 2008 Hansard column 1043)

This is not quite the full story, however, as a draft copy of the Ombudsman's report was issued to all interested parties in February of this year.

Assuming Ann Abrahams did not radically alter the conclusions of her 4-year work between February and July, the Government has actually been aware of the report's contents for the best part of a year.

Another opportunity to respond was missed during yesterday's Pre-Budget Report. The Chancellor found money for a cut in VAT and took borrowing to record levels, but again failed to address the situation faced by Equitable Life policyholders. And sadly, unless the Minister has something quite considerable up his sleeve, I doubt we are going to be stunned with some far-reaching new comments today.

One of the reasons I was so pleased to secure today's debate was that the Government has been reluctant to discuss Equitable Life in the House.

Before the summer recess, the Liberal Democrats tried for 3 consecutive days in July to secure an urgent debate in Parliament on Equitable Life. For 3 consecutive days our request was denied.

Now, finally, we have a debate, though it strikes me that one of the issues up for discussion should be the definition of autumn that the Government officially adheres to.

Most people judge the seasons by the calendar months. Autumn is September, October and November. So there's technically still a few days left, but with House business already programmed, there's no sign that it will.

In addition to the Equitable Life response, MPs expenses were also due to be published this autumn, and we now hear the publication may not be before next July. Does that definition of autumn also apply to Equitable Life? Given that it seems to have such bizarre definitions of the seasons, perhaps the Government could issue its own calendar so we know where we stand?

Or better still, the Government could end the delay now, and deliver a Christmas present to all those affected by accepting the Ombudsman's recommendations.

The Government's tactic of delay has backfired. The result is a clear, comprehensive report by Parliament's own referee. It contains two simple recommendations that must not be ignored.

And let us not forget that around 30,000 Equitable Life policyholders have died since the events of 2000. For these people, it is already too late - justice delayed has been justice denied.

According to the Ombudsman, the fallout from Equitable Life could have been mitigated, had action been taken earlier. She states that "there were lost opportunities to address critical issues earlier".

No more delays, no more dodging the issue. The time has come for the Government to face up to its responsibilities to Equitable Life policyholders.


The case of Equitable Life has serious implications for the office of the Parliamentary Ombudsman.

It in the interest of the health of our democracy that we have an authoritative Parliamentary Ombudsman that the Government listens and responds to.

But that is something that Ministers have been reluctant to support.

An exhaustive 18-month investigation by the Ombudsman found the Government guilty of 'mis-selling' occupational pensions to 125,000 people who lost their company pensions, with no warning and with no chance to protect themselves.

The Public Administration Select Committee, the European Court of Justice and the High Court Judicial Review all agreed that the Government should have protected their pensions but failed to do so. The Government continued to resist pressure to pay compensation until December last year, when it finally agreed a compensation package of more than 3bn.

Another of the Ombudsman's reports, in June 2007, looked at Tax Credits. Appropriately entitled 'Getting it wrong?', it contained severe criticisms of the Government's use of waivers in relation to overpayments, calling it "unfair and inconsistent".

The Ombudsman sought to correct faults in a system that causes stress and misery for people like my constituent, who was overpaid by 5,300, then told that the money had to be repaid within one year. In spite of the Ombudsman's criticisms, the Government continues to defend its over-complex tax credits regime.

Members of the Government have not always had such a frosty relationship with the Parliamentary Ombudsman. Compare the cases I have outlined to the situation when our current Prime Minister was in opposition.

An Ombudsman investigation was instigated by his party into Barlow Clowes, which collapsed in 1988. And it was he who argued that the Government of the day should support the Ombudsman over charges of maladministration by the DTI.

When Lord Penrose published his report in 2004, parallels were drawn between Equitable Life and Barlow Clowes. Speaking in the House after the publication of the Penrose report, the Financial Secretary to the Treasury said:

"It has been put to us that as the then Government provided redress in the Barlow Clowes case, we should do so with respect to Equitable, but there are major differences between the two cases. In the case of Barlow Clowes, there was a finding of maladministration; for Equitable, there has been no such finding." (8 Mar 2004, Hansard Column 1257)

Well, now there has been such a finding - how can the Government possibly justify failing to act?

In the Ombudsman's report, we have a clear, detailed, high-quality piece of work. Four years of effort have gone into its 2,800 pages, with Equitable Life itself providing over 55,000 documents to the inquiry.

The report uses words like "maladministration", it calls the DTI "complacent" and sympathises with "a justifiable sense of outrage" among policyholders.

This is not language that Ministers should ignore.

If statements as strong as these do not prompt action, then clearly the Government's working relationship with the Parliamentary Ombudsman is a dysfunctional one. That in itself is a situation that needs to be addressed.

If her report is ignored, people will simply ask what is the point of the Parliamentary Ombudsman? The role would be fatally undermined.

That would be a sad situation for this Parliament, a blow to our democratic system and a shameful state of affairs for this Government to have brought about.


The Government is under pressure to pay compensation to the victims of Equitable Life's near-collapse.

In one sense this pressure is entirely of its own making. The bank bailouts that took place in recent months have left the Government in a position in which it is impossible to justify a refusal to pay compensation.

Equitable Life policyholders have been waiting 8 years for compensation. With the Government guaranteeing savings in Northern Rock and putting a rescue plan together for Icesave investors practically within a matter of hours, Equitable Life customers have been left asking why they are still waiting.

Of course, some cases require greater urgency, and Equitable Life is a special case, not the same as the banks that have been bailed out by the taxpayer. But these actions will certainly add to the "justifiable anger" of policyholders referred to by Ann Abrahams.

This anger will be compounded by the sense that the Government has guaranteed savings that were much more high-risk than Equitable Life.

Equitable Life used to have a reputation as the "Marks & Spencer" of financial institutions. It was seen as a sound place to invest, and certainly not a high risk venture.

The same can't be said of Icesave, which attracted people seeking high returns on their money, with a higher element of risk attached. Equitable Life savers have been furious to see these higher risk investments prompt a rapid bail-out by the Treasury.

Ann Abrahams has not put a figure on the amount of compensation that should be paid, but EMAG, the Equitable Life Members Action Group, has calculated the figure at 4.6bn. Incidentally, this is the same sum required to guarantee deposits with Icelandic Banks.

In bailing out the banks, the Government has manoeuvred itself into a corner on Equitable Life.

Refusing to pay compensation to Equitable Life savers would be wildly inconsistent with its recent actions.


In conclusion, there are three things the Minister must do.

Firstly, respond. Not just to me, today in this debate, but to the Ombudsman's report, as was promised to Parliament and to more than a million Equitable Life policyholders. Stop the delaying tactics and put an end to the years of missed opportunities, of policyholders dying without redress and the continuing injustice. If the Minister cannot respond to the report today, he must tell us when he will.

Secondly, apologise. Ann Abrahams is perfectly clear and perfectly correct when she talks about a "justifiable sense of outrage" among policyholders. The very least they deserve is an apology from the Government and an admission that it was at fault for the charges laid at its door by the Ombudsman.

Thirdly, the Government must set out a credible, transparent and independent process to enter into a dialogue with policyholders over compensation. Redress should happen quickly - the timescale set out by Ann Abrahams is 2 years to complete the entire process. That way, questions of means-tested hardship funds become irrelevant and justice is done for all.

I want to end by reflecting on the impact this has had for individuals, and I know the experience of my constituents is mirrored by others the length and breadth of this country.

The Hunters are a retired couple from Milngavie - Professor Hunter is 86. They have seen the monthly return from their Equitable Life investment drop by half since 2,000.

Mrs Hunter spoke of feeling "very let down" and "abandoned" when they lost out. She said they felt they "were given no support" as the value of their investment plummeted. Even 8 years after the event, the feeling of injustice from Mrs Hunter is still apparent.

She has been promised a Hansard of this debate in the post as soon as it is printed. I know she would be grateful to read something in the Minister's comments to give her hope that she and her husband will receive an apology and a compensatory sum for this Government's 'decade of regulatory failure'."