Press Coverage 22/08/2007

Equitable Life victims visit Treasury

Daily Telegraph, by Faith Archer
22/08/2007

Victims of Equitable Life's near-collapse called on the Treasury yesterday to stop ignoring claims for compensation which were upheld by the European Parliament more than two months ago.

The Equitable Members' Action Group (Emag) delivered a letter to Chancellor Alistair Darling demanding a response to a highly critical report, approved by the European Parliament in June.

This found that the British Government failed to ensure that Equitable Life maintained adequate capital reserves. The insurer was plunged into difficulties after losing a legal battle in the House of Lords, leaving it with a £1.5bn liability.

A Treasury spokesman said yesterday: "It would not be appropriate for the Government to comment on the substantive findings made in the report, pending the outcome of the UK Parliamentary Ombudsman's investigation into the regulation of Equitable Life."

Paul Braithwaite of Emag accused the Treasury of "breathtaking contempt" for the European Parliament and said: "The Treasury has cynically stalled the Parliamentary Ombudsman's report three times now and is using the delay and obfuscation it causes to avoid responding to the European Parliament's calls for compensation of Equitable victims."

Yesterday, the Ombudsman, Ann Abrahams, confirmed that no conclusions from her investigation - which began in 2004 - are expected before the end of the year.

Claimants fear more Equitable Life delay

Financial Times, by Andrea Felsted
Published: August 21 2007

A long-awaited parliamentary ombudsman’s report into possible regulatory error over Equitable Life may not be published this year.

The Equitable Members’ Action Group, an independent association of policyholders, said in a letter to the government yesterday that Ann Abraham, the ombudsman, now appeared “very unlikely to report in 2007”.

It accused ministers of stalling and of using the excuse of waiting for the report’s conclusions to avoid responding to European legislators’ recommendations that Equitable members, who lost billions of pounds when the life assurer ran short of cash, should be compensated.

Ms Abraham wrote to MPs in May saying she could not give a firm timetable for publication.

Publication beyond this year would be a further blow to Equitable members . Her report is already said to have been delayed four times. The action group called on Alistair Darling, the chancellor, to respond to the European legislators’ report.

The Treasury said it would “not be appropriate” for the government to comment on the findings of the European parliament’s report, pending the outcome of the UK ombudsman’s investigation.

The Treasury was co-operating fully with the Ms Abraham’s inquiry – the timetable for completion of which was “a matter for her”.

Letter calls for end to ‘festering’ Equitable problem

The Herald, SIMON BAIN
August 22 2007

Equitable Life campaigners have urged the Chancellor, Alistair Darling, to "break the logjam" of six years of critical reports on the insurer's near-collapse, and to respond to the European Parliament's call for the UK government to compensate policyholders.

Equitable Members Action Group (EMAG) delivered a letter to the chancellor yesterday with the backing of Dr Vince Cable, the LibDem Treasury spokesman, and the LibDem MEP Diana Wallis, who was the European Parliament's rapporteur in its Equitable inquiry, the first of its kind in 10 years.

In June, the European Parliament overwhelmingly endorsed the 385-page report, which urged the setting-up of a compensation scheme for one million policyholders damaged by the government's failure to regulate Equitable at the end of the 1990s.

The report said regulators had "behaved with undue awe or deference towards Equitable Life . . . and apparently believed (it) to be too good and too reputable to make mistakes". This had exacer-bated a "weak regulatory environment, which allowed the difficulties at Equitable Life to grow unchecked".

It concluded that "given the absence either of accessible legal redress through the courts or of effective alternative means of redress ... the UK government is under an obligation to assume responsibility".

The EU's 22-member committee heard from a total of 38 witnesses at 11 public hearings, including evidence last November from The Herald, on orchestrated mis-selling by Equitable Life and the discriminatory treatment of complainants.

Leading barrister Lord Neill of Bladen, the former chairman of the Committee on Standards in Public Life, had told the inquiry that the government was "using every conceivable excuse to ensure that the Treasury is not liable for compensation".

In the letter to the chancellor, Paul Braithwaite, the secretary of the 10,000-strong EMAG, says he hopes that the "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".

Braithwaite says it was six years ago this month that he and Cable delivered a letter to then chancellor Gordon Brown about the plight of Equitable Life sufferers. "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."

The letter goes on: "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."

The government has said it will not be responding to the European report until after the parliamentary ombudsman, Ann Abraham, has published her report - which has been delayed several times by the "discovery" of fresh documents by government departments and is now unlikely to be published this year. EMAG's letter says the ombudsman has "absolutely no remit with regard to European Law or the single European Market, which are the central issues addressed by (the EU report)". It asks the new chancellor to "ensure a comprehensive response" to the European Parliament, and urges new economic secretary Kitty Ussher to relent on her refusal to meet with EMAG.