Equitable Life: Don't let them get away with it again

James Daley in The Independent on 26 May 2007

Victims of the Equitable Life debacle were dealt yet another heavy blow this week, as the Parliamentary Ombudsman, Ann Abraham, revealed that she won't be publishing her report on the scandal until the autumn – at the very earliest.

Her latest investigation has now been going on almost three years, and it remains the last real hope of compensation for Equitable customers who lost out when the society went bust seven years ago.

Her letter to MPs announcing the latest delay this week was telling. Apparently, the reason for the hold-up is that the Treasury has provided a 500-page response to her preliminary (and yet to be published) findings, ensuring that there is no chance of filing her report before Parliament breaks up for the summer recess.

Such a lengthy response can only suggest that Ms Abraham's report found the Government guilty of maladministration in its regulation of Equitable during the 1990s, and that she has directed that it duly stump up some compensation for those who lost out.

But Equitable members should not start getting excited just yet. As the Government demonstrated in its handling of the recent occupational pensions scandal – where 125,000 lost their pensions when their companies went bust – it does not care what the Ombudsman says. Ms Abraham found the Government guilty of maladministration in its handling of occupational pensions too. However, Gordon Brown simply brushed the report aside, forcing the Secretary of State for Work and Pensions, John Hutton, to say that he disagreed with the findings and that he would not pay out any compensation.

The Government's 500-page response to Ms Abraham's latest damning report is surely just another delaying tactic, ensuring that her findings are not published anywhere near the time when Mr Brown is taking over as Prime Minister. And when the report is finally published, you can bet your life the Government will brush its findings aside, just as it did with the Ombudsman's last pension report.

The one hope is that MPs will finally take a stand against the Government's arrogance. No administration should be above the Ombudsman. Ms Abraham's job is to keep Parliament in check – and there is no point in keeping her office if the Government can simply ignore her reports and recommendations.

Although the Parliamentary Affairs Select Committee has already criticised the Government for its handling of the Ombudsman's office, and several backbenchers have sniped at the Treasury from the sidelines, it is about time a proper stink was kicked up.

The Government's stubborn stance ultimately undermines our entire democracy – not to mention that it denies due compensation to thousands of victims of these financial scandals. Hopefully, this time, the Government won't get away with it.

http://money.independent.co.uk/personal_finance/invest_save/article2582316.ece

“Further delay is hardly equitable

Alistair McArthur in The Scotsman
26th May 2007

AND so the Equitable Life debacle goes on. The Parliamentary Ombudsman has yet again had to put back the publication of its report into the collapse of the troubled life insurer, this time because it has received a response that Ann Abrahams said is so long she can "give no commitment as to the timetable for publication [of the report]".

The document in question was a joint response from the Financial Services Authority, Treasury and Government Actuary's Department and ran to an impressive 500 pages.

It covered issues such as the investigation process; scope of the draft report; and a range of legal and actuarial issues.

It led to a response from Abrahams to MPs: "Given the nature and extent of these representations, I will need time to consider, with my professional advisers, all of the points which have been made by the bodies under investigation."

As this will inevitably have an impact on the timetable for completion of the investigation - as Abrahams intends to send preview copies of her revised report to relevant bodies before reaching her final conclusions - it is clear she will not be able to publish the final report before the summer Parliamentary recess.

This latest postponement will come as a blow to Equitable Life policyholders, who saw their savings slashed as a result of the debacle and hope the ombudsman's findings could strengthen their claim for compensation.

The report, which will look at the handling of the Equitable Life crisis by government and regulators, was originally expected to come out by the end of 2005.

But after a series of postponements and the late discovery of relevant evidence that had not been submitted, the date was put back to "May at the earliest". This is the third time the Treasury has thrown a spanner in the works to delay the report. It seems the department has now succeeded in making sure it doesn't interfere with Gordon Brown's coronation.

As Paul Weir, spokesman for the Equitable Late Contributors Action Group, said: "The Treasury is cynically giving the Parliamentary Ombudsman the runaround to buy itself more time, coming up with a stream of new arguments or suddenly 'finding' van-loads of 'new' evidence previously hidden from Lord Penrose.

"How much longer are the victims of this scandal going to have to wait for justice? It's delay, delay, delay, until we're all dead or gone away."

http://business.scotsman.com/banking.cfm?id=817642007

“Brown under fire for delay on Equitable

Financial Times: 24th May 2007
By James Blitz and Andrea Felsted

The Conservatives last night accused Gordon Brown of deliberately seeking to delay publication of an independent report into the Equitable Life crisis until after he has left the Treasury.

George Osborne, the shadow chancellor, suggested the Treasury had "deliberately swamped" the parliamentary ombudsman with hundreds of pages of new documents to force a delay in publication of a potentially embarrassing report for the government.

Mr Osborne was commenting after the long-awaited report by the parliamentary ombudsman into possible regulatory error over Equitable Life was delayed for what is believed to be the fourth time because of a "substantial" response from bodies including the Treasury and the Financial Services Authority.

Mr Osborne said: "Hundreds of thousands of people had their life savings cut by the crisis at Equitable Life and it is vital that the parliamentary ombudsman has the time she needs to complete a thorough investigation.

"However, a cynic might think that Gordon Brown has deliberately swamped the ombudsman with paperwork in order to delay the report until after he's left the Treasury and can try to escape the blame."

Ann Abraham, the parliamentary ombudsman, told MPs yesterday, that at this stage, she can "give no commitment as to the timetable for publication".

The latest delay is a further blow to Equitable members, many of whom hope Ms Abraham will force the government to pay compensation to members. Equitable's annual meeting is today.

Ms Abraham said she had sent a draft report to the Treasury, the Government Actuary's Department and the FSA in January.

"I have received a substantial joint response from these bodies [which runs to more than 500 pages]", her letter to MPs said.

"Given the nature and extent of these representations, I will need some time to consider, together with my professional advisers, all of the points which have been made by the bodies under investigation."

The ombudsman's office declined to give further details of the response.

Ms Abraham said last October that the earliest she would be able to present the final report was May 2007. This followed comments in February 2006, when the report was again delayed, that it may not appear before the end of 2006.

When Ms Abraham, in November 2004, gave details of her wider inquiry into possible regulatory error over Equitable, she said she hoped to complete it some time during 2005.

The ombudsman said she would write to MPs again in October.

http://www.ft.com/cms/s/55c23d76-0993-11dc-a349-000b5df10621.html

Equitable report delayed again

New delay for Equitable verdict

Rupert Jones, Guardian
Wednesday May 23, 2007

It is four years since the investigation into Equitable Life was launched,

A parliamentary watchdog's long-awaited report into what went wrong at Equitable Life and whether government departments were at fault has been delayed again, to the dismay of long-suffering policyholders.

They will now have to wait until autumn at the earliest and perhaps next year for the parliamentary ombudsman's verdict. Some have already died since the inquiry was launched

News of the fresh hold-up is a bitter disappointment because it is regarded by many policyholders as their best remaining hope for government compensation.

Equitable Life shut its doors to new customers in 2000 and later repeatedly slashed the value of 1 million policyholders' investments after it lost a legal battle involving guaranteed annuity rates, sold as part of pension plans.

The ombudsman, Ann Abraham, announced in July 2004 that she was reopening her inquiry into the scandal.

She is looking at whether policyholders were caused an injustice as a result of maladministration by regulators and what form any redress should take, and has been investigating a number of accusations of regulatory failure.

Ms Abraham originally indicated she would complete her investigation before the end of 2005, then later said the report was due to be published by the spring of 2006.

After putting publication back to the end of 2006, Ms Abraham wrote to MPs last autumn to say the earliest she would be able to publish her findings was May 2007.

Now she has written to them again to say the report will not emerge before the summer parliamentary recess.

"Indeed, at this stage, I can give no commitment as to the timetable for publication," she stated in today's letter. "I recognise this will be a disappointment to many of your constituents and I am sorry about that."

Ms Abraham said the reason for the delay was that she needed more time to consider a 500-plus page joint response to the allegations sent to her office by the Treasury, the Government Actuary's Department and the Financial Services Authority.

This bulky document addresses a range of issues, from the scope of the draft report to the merits of the complaints.

Paul Braithwaite, general secretary of the Equitable Members Action Group (EMAG), said: "Along with the hundreds of formal complainants and a million-plus Equitable Life victims, EMAG is weary about the news of another delay, taking us into the fourth year since this investigation was announced."

Many of those who suffered "are dying waiting", he added.

http://money.guardian.co.uk/news_/story/0,,2086388,00.html

By Andrea Felsted, Insurance Correspondent
Published: May 23 2007 13:01

http://www.ft.com/cms/s/92692098-0883-11dc-b11e-000b5df10621.html

A long-awaited report by the parliamentary ombudsman into possible regulatory error over Equitable Life has been delayed for what is believed to be the fourth time because of a “substantial” response from bodies including the Treasury and the Financial Services Authority.

Ann Abraham, the parliamentary ombudsman, has written to MPs telling them that at this stage she can “give no commitment as to the timetable for publication".

The latest delay is a further blow to Equitable members, many of whom hope Ms Abraham will force the government to pay compensation to Equitable members who lost billions of pounds in the crisis.

It comes ahead of the Equitable’s annual meeting on Thursday.

Ms Abraham said she had sent a draft report to the Treasury, the Government Actuary’s Department and the FSA at the end of January.

“I have received a substantial joint response from these bodies (which runs to more than 500 pages)”, her letter said. “This addresses matters concerning the investigation process, the scope of the draft report, a range of legal and actuarial issues relating to the matters covered by the report, and the merits of the relevant complaints.”

She added: “Given the nature and extent of these representations, I will need some time to consider, together with my professional advisers, all of the points which have been made by the bodies under investigation.”

The ombudsman’s office declined to give further details of the response.

Ms Abraham said last October that the earliest she would be able to present the final report to parliament was May 2007.

This followed comments in February 2006, when the report was delayed for the second time, that it may not appear before the end of 2006.

When Ms Abraham, in November 2004, gave details of her wider inquiry into possible regulatory error over Equitable, she said she hoped to complete it some time during 2005.

The ombudsman said she would write to MPs again in October.

The latest delay comes just weeks after European legislators said investors who lost billions of pounds through the Equitable crisis should be compensated by the UK government.

The European legislators also urged the UK government to ”accept and implement any recommendations the UK parliamentary ombudsman may make” in her wider report on Equitable.

Paul Braithwaite, general secretary of the Equitable Members’ Action Group, said: “We are frustrated, but we are suspending our hostility and still being supportive in the expectation that the report, when it comes, will be absolutely fireproof and rigorous.”

He added that it was “ominous that this time Ann Abraham says she cannot give an indication of when she will publish”.

A Treasury spokesman said: ”The parliamentary ombudsman’s investigation into the prudential regulation of Equitable Life is, like all such investigations, being conducted in private. The Treasury is co-operating fully with the investigation. The timetable for the completion of the parliamentary ombudsman’s investigation is a matter for her.”

The FSA declined to comment.

Equitable Life report delayed again

Press Association:

…….News of the latest postponement comes amid allegations that the Government is trying to delay criticism being made public.

Putting back the document will mean that it will now come out after both a handover of the Labour leadership to Gordon Brown and a separate report on Equitable Life by MEPs.

The European Parliament committee of inquiry voted earlier this month in favour of a critical report on the role of UK Government and regulators in the crisis.

A vote on the report by the full European Parliament is expected in June.

The latest delay by the Parliamentary Ombudsman had been anticipated. Speaking earlier this month, Paul Braithwaite, general secretary of Equitable Members Action Group (EMAG), said: "We can be completely confident that it will not be May and confident that it will not be until the new prime minister has been appointed.

"All the shenanigans and filibustering by regulators has been to ensure that this report does not a) inform the European Parliament and b) does not prejudice the forthcoming transfer of power."

http://icbirmingham.icnetwork.co.uk/birminghampost/business/tm_headline=equitable-life-report-delayed-again&method=full&objectid=19171768&siteid=50002-name_page.html

QUOTE FROM EMAG:

Paul Braithwaite, general secretary of EMAG commented:

“EMAG takes hope that Gordon Brown’s promise of new respect for Parliament will mean that THIS PO report will have its findings respected by Government - in contrast to the contempt shown to one into failed occupational pension schemes last year. The importance of re-establishing honouring the office of Parliamentary Ombudsman can’t be overstated.”