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Documents: 06/03/2003 - Extract from transcript of the Public Administration Select Committee meeting

6th March '03 - Extract from transcript of the Public Administration Select Committee meeting

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Mr Liddell-Grainger

31. Can I talk about, if I may, the situation, we have got a lot of constituents who are getting in touch with us on a regular basis concerning Equitable Life, it is becoming a crescendo of constituents, and I am sure we all in this room have got the same. It is beginning to be quite embarrassing, because we have a lot of people, and we are meant to be the filter for people, and you have taken up a case. I believe there are 285 cases which MPs have. I have not even gone to you with my cases because, as far as I can see, there is no point at the moment. As an MP, I am a little narked, because I am trying to defend or help my constituents and I cannot because you have taken up a case. Now, looking at it broadly, I think this is just not very acceptable. You are the Ombudsman, why is it that you are taking up a case?

(Ms Abraham) I did explain in the letter to Members, that I wrote on 5 December, that the taking up of a case as a representative case was the approach that my office always used in situations where there was a large number of complainants, and that it was the approach that the office had used in the Barlow Clowes case, it was the approach that the office has used in the SERPS case. So that is entirely the way that we would approach this sort of situation.

32. But is it the right way?

(Ms Abraham) I think it is the right way.

33. So you take up a case and see where you get to, so then, if there is another variation, you take up another case. So we have 285 cases, excluding I do not know how many we have counted up that all the MPs are going to have. Sydney is retiring, he may not get a case in front of you. Surely, that is not the way to do it?

(Ms Abraham) I think I beg to differ, and perhaps I could use as an illustration the report on long-term care that I published a couple of weeks ago, because I think that is very much a way in which, hopefully, we can help to obtain remedies for a large number of people without necessarily having to look at every single one of those cases. What we did there was, in slightly different circumstances, in that it emerged from our casework that this was an issue which was likely to have a much wider application, we produced a report to Parliament to raise awareness of the issue, as a result of which we have had over 1,000 telephone calls in the last fortnight. And we have been able to put those people in touch with the strategic health authorities who have the responsibility here, and those strategic health authorities are all very much aware of the issues, and the Department of Health is as well. So really it is about using the resources of our office in the most effective way. And what we are not saying to all of the complainants whose cases we are not investigating is that when we have done this one we will turn to the next one in the queue; what we anticipate, in the same way as has been the case in the past, is that the findings in relation to the representative case will actually be able to be used in relation to the other people concerned.

34. That is a perfect world; we are not in a perfect world, we never have been. We get the press reports that you have been sat on by Number 10. This report is going to come out; when are you hoping to publish, June?

(Ms Abraham) In June.

35. Do you know when?

(Ms Abraham) In June.

36. Just in June, of this year?

(Ms Abraham) Yes, this year.

37. Oh, good. Therefore, it is a perfect world you are talking about, but we are not in a perfect world, we have got a lot of people who are extremely angry; you must have some sympathy with what is going on?

(Ms Abraham) Of course I do.

38. Who are extremely angry; we are the filter, but we are not getting what we need, partly because we have got Lord Penrose who is going to come up with his report sometime, which the conspiracy theory may say that you are hiding behind to see what is going to happen and you will bring out yours, in fact, it looks as if you are going to be June and he is October. But it is not going to help us, as MPs, to get our cases for our people in front of you, if there are variations, and because it is not a perfect world?

(Ms Abraham) I am not sure what I can say to that. I cannot make it a perfect world. What I have done is explain the basis on which we are investigating a representative case.

39. Let us take a little bit longer. I am a fairly new MP, Sydney has been here a little bit longer. Why are you not taking up pre-1999 cases; why did you not do that?

(Ms Abraham) In fact, my predecessor took that decision, and I looked at that very closely when I came in, in November, and it was something that I did think long and hard about, because, clearly, it was something that many people had raised. I took the view at that point that the investigation was well under way and that if I were to change the scope of it, extend the scope of it, in effect, what I would have been saying to my staff was that they needed pretty much to start again, and the only real consequence that I could see from a decision to extend the scope was very, very significant delay, of many, many months, possibly more. Therefore, because, I think, at that time I was looking at what was being said to me, there was a large body of concern about how long they were taking, there were issues around scope, and I had to make a judgment about that, I took the view that to do anything other than continue with what my predecessor had decided could only delay us very considerably, and therefore I decided to stay with his decision.

40. Okay, then let us look at, you could publish an interim report in June, with a view of looking at the situation pre-1999 in a report to be published, say, four months later; because we have got a lot of people pre-1999 who are deeply concerned and yet have got no recourse, through us, as Members, to you at all. Personally, I do not think that can be right. Do you think it is right?

(Ms Abraham) Clearly, I have made the judgment that I have, and certainly I intend to report in June, and we are on target to do that, unless something happens that I am not yet aware of. You say an interim report, I intend to report on this investigation in June. What my predecessor said is that he would conduct the investigation that we are conducting, and that he would await the report of Lord Penrose's inquiry before deciding whether it would be appropriate, and indeed useful, to intervene further. I take a similar view. So I have reached no final conclusion on any of these matters, and, clearly, there is my representative investigation to conclude, there is Lord Penrose's inquiry, and at that stage I have to take a view about what my office usefully can do.

41. Will you be considering looking at cases pre-1999 as a useful exercise after that?

(Ms Abraham) I have not ruled out doing that.

42. Lord Penrose has said, he has made it clear, he will not shrink from making adverse comment about the conduct of individuals in institutions; if he is very critical, I am crystal-ball gazing only, I have no information, it would put quite a lot of pressure on you, because of a lot of cases we have, actually to look at this with a broader brush. Do you think that is something, and I am crystal-ball gazing, if that is the case, that you would be inclined to look at?

(Ms Abraham) I think it is crystal-ball gazing and it is speculation. I do not know what he is going to say either. But I have made very clear, I think, and my predecessor has, to Members and to the Committee, the extent of my jurisdiction, and, clearly, my jurisdiction will be what drives this.

43. One of the things that interests me slightly, and I know that two other colleagues want to come in on this, on one other bit, is, if there is regulatory failure within the DTI or the FSA, that could open up an enormous can of worms, to say the very least. As a Committee, we are here to look at you and support you all we can, and make comments as we go along, and this is something where also you find the Treasury involved, where there may be major problems; do you see that as a potential area which you may have to look at very closely?

(Ms Abraham) Of course, I cannot be unaware of the implications of anything I might conclude, but that does not mean I do not conclude it.

Chairman: We have got to think about that.

Mr Liddell-Grainger

44. Yes, that is a fairly deep one. In other words, if you conclude that one of those three bodies has got something badly wrong, through whatever, you will look at that with a laser-beam eye, to see where it is going?

(Ms Abraham) Absolutely. Sorry, I am not intending to be cryptic. I think what I wanted to say was that I would never expect to, I would never expect any Ombudsman to compromise their findings because it was going to open up a can of worms.

Annette Brooke

45. Can I just pick up a few points. Like everybody else, I have an enormous mailbag, and I think, actually, people really were hoping that you would actually review the whole situation and come up with a different decision. My first question is, obviously there has been an exchange of letters between Lord Penrose and the Treasury Select Committee quite recently, in February, and Lord Penrose has stated quite clearly that there are issues that go right back before the 1990s, and there is the suggestion, I think, that there is maladministration. Now I am wondering if actually we could ask you today to take on board those letters and comments to the Treasury Select Committee, perhaps actually to make a better basis for getting stuck into the pre-1999 period; because that does seem, to me, a change since you wrote your letter to us in December?

(Ms Abraham) I am not sure I would see that in the same way, and I think what is happening in Lord Penrose's inquiry is a matter for Lord Penrose. Certainly I have not seen anything which suggests to me that I should change my decision about the scope of our inquiry, and I cannot give you the assurance that you are asking for. At the moment, that is the scope of our investigation, that is the basis on which we are heading to report in June, and that is how I am proceeding.

46. The other area of confusion is, I think, that people feel that the Ombudsman's inquiries are being held up with the Penrose inquiry?

(Ms Abraham) Not so.

47. So we will have an absolute guarantee that there will not be a delay in the June pronouncement?

(Ms Abraham) Well, not because of the Penrose inquiry. What I have said is that we are on target to report in June, and unless something happens that I do not know about yet then we are on course to report.

48. Why has this single inquiry taken quite so long; because, as I understand it, it is related to the Baird report, and that report in itself took about eight months, I think? So why is your inquiry taking so long; can you tell us what the hold-ups are?

(Ms Abraham) At the moment, there are not any hold-ups. There has been a huge amount of documentation to go through, there have been many, many interviews with witnesses, it is a very big investigation. But it is about the scale of it and the amount of paperwork, it is not about hold-ups in the sense that you describe.

49. Was there a clear plan with target times set out for the investigation?

(Ms Abraham) There is a clear plan with target times set out for the investigation.

50. And is it on target?

(Ms Abraham) It is.

51. Can I just go back again, because I strayed from my point of questioning just to go there. I still have this great concern about Penrose, on the one hand, which is commissioned by the Treasury, and if there is maladministration going back over previous years then we are talking about that it would be, presumably, by the Treasury or the DTI over that period. I think people really want to be sure that there is going to be something totally independent, looking at the potential of maladministration; after all, I believe the SERPS inquiry went back over a much longer period of time. I just feel really that we need some convincing statements that there is this true independence, because all the time it seems to come back, "Well, Penrose is looking at that." But, surely, with the particular issues of the Ombudsman, whether it is maladministration, whether there is a legal liability, that is your brief and your brief entirely?

(Ms Abraham) It is my brief in one sense. The constraints that I have are about jurisdiction, and that has been set out very much in previous memoranda to the Committee and it is set out again in my letter. So, of course, there are no questions about my independence. I could not possibly seek to speak for Lord Penrose, but I think his independence is something that certainly he would want to stress as well. There are limits to my jurisdiction, they have been clear from the start.

52. And yet your jurisdiction is maladministration?

(Ms Abraham) My powers and my statutory existence are about maladministration, but the bodies over which I have jurisdiction do not include all the bodies that Lord Penrose is looking at, or that might be an issue here.

53. But they would include the DTI and the Treasury as the regulatory bodies?

(Ms Abraham) In terms of the specific investigation that we are conducting now, the Treasury and anyone acting on their behalf, obviously the DTI if we were to go back.

Sir Sydney Chapman

54. I have to confirm that, 'outrage' is the word that is used in this session, I have got a lot of outraged constituents, who are, of course, Equitable policy-holders, or annuitants, and I confirm most of what Ann and Ian have said. If you report, as you hope to do in your pilot study case, in June, that will be 20 months after the inquiry was instigated; would that be right, in saying that?

(Ms Abraham) I am just trying to think. It may well be that length of time.

55. You see, what my constituents cannot understand is why it is taking 20 months. You said you have put in a lot of research, and all those things, the call for papers, but this is on one test case, is it not, so why does one test case take probably at least 20 months?

(Ms Abraham) I am tempted to say, in response to that, so that any future cases would take a lot less time. We have conducted a very extensive investigation about the prudential regulation of Equitable Life in that period, so we are looking at the generality of prudential regulation and how it impacts on that case, but it is a representative case that means that we have to look at all the circumstances. So I suppose it is difficult. I have been around only since November and I have not been involved in all of the detail going back, but I have seen, obviously, the extent of the files, the paperwork, the investigations, the interviews that have been involved in that, and that has taken a considerable amount of time, we have had to take professional advice, and so on. I suppose when the report appears it may be clearer why the investigation has taken that length of time. I am sure that is very little consolation for the people who have waited that length of time. But what I can say is when I arrived in November the first thing I did, in the very early weeks, was to conduct a full review, to write to members to tell them the results of that review, to establish a very clear timetable for the completion of the investigation and production of the report, and I have reviewed with the investigation team that timetable as we have gone forward, I did so most recently at the end of last week. So I have ensured that the investigation has progressed as quickly as I think it can realistically, and it is progressing against the timetable that I established with my staff shortly after my arrival, and we have not departed from that.

56. Do you know when Lord Penrose will be reporting?

(Ms Abraham) I do not.

57. The latest information seems to suggest that his report will not come into the public domain until at least the autumn. Will you get a copy of it before it is published, do you know?

(Ms Abraham) I do not expect to get a copy before it is published, no. The Committee may be interested to know that I did have a very brief meeting with Lord Penrose recently, at my request, because I wanted to be clear that I did understand the remit of his inquiry, but, clearly, we could not discuss the content of our respective investigations and the inquiry. So I do not anticipate that I am going to get any special treatment in relation to Lord Penrose's inquiry. I would not ask for it.

58. You will know that the Treasury Select Committee reported on 27 March 2001, saying that there was a prima facie case of maladministration. Now, of course, you have been in your post only since October, but do you know why your predecessor, or his office, did not act upon the publication of that Treasury Select Committee report, or perhaps your office did; could you give me any information about that?

(Ms Abraham) I really do not know the answer to that question, I do not know.

59. Let me go back to the very first principle then. You depend upon somebody asking you to find out if there is a case of maladministration, this is a genuine question I do not know the answer to myself, so that, if a Select Committee report saying there is a prima facie case of maladministration, that is not an application to your office, or to you, to act?

(Ms Abraham) No. The legislation is about a complaint being referred to my office by an MP in relation to an individual, so I am not responding in that sort of way.

60. I am grateful for that, because I think that is an important point that we might have to consider. But can I just confirm, because my constituents are deeply affected, as are many other constituents who are policy-holders, clutching at any hope that there will be a speed-up in the process, and, in case there is any misunderstanding, you did say, in effect, that although your report into this pilot study case may take 20 months, June 2003, one of the reasons for the length of your inquiry is that it might speed up consideration of many more cases that might be put to you by the policy-holders?

(Ms Abraham) Yes, that is what I am saying.


61. Thank you very much for that. Could I round that off by just confirming that you have said, and I thought interestingly, that you have not closed your mind to pre-1999 investigations, if the case for that seems to emerge from the current inquiries; is that right?

(Ms Abraham) I did say that.

62. Thank you. It is also the case, is it not, that people look to you because you are the only person that has some sort of redress role too; so you are very conscious of that, presumably, as you do your work, and that the issue of redress would feature in your report?

(Ms Abraham) It is right that I have the power to recommend redress. There does seem to be, in some quarters anyway, a view that I can order redress, and the Committee will be well aware that that is not so. But, yes, clearly, if I find maladministration and injustice then redress is where I go next.