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

Media Stories: 20/12/2008 - Press Reaction to Government Report delay

Equitable Life statement delayed

The near-collapse of Equitable Life affected more than a million people.

BBC website 11th Dec


The government has delayed its promised response to a report that called for a compensation fund for policyholders in Equitable Life.

More than a million policyholders were left with reduced retirement savings after the life insurance company came close to collapse in 2000.

The government promised to respond to an official report on the saga by the Parliamentary Ombudsman in the autumn.

But it confirmed on Thursday that no statement would come before Christmas.

Earlier this week, Treasury Minister Ian Pearson promised MPs that a statement would be made in the Commons next week.

But on Thursday, Leader of the Commons Harriet Harman said there would be no statement until Parliament returned from its Christmas break on Monday, 12 January.

The government has come under strong pressure from opposition MPs to make a statement.

Previously ministers have said that they needed time to consider a "weighty report" produced after four years of investigation by Parliamentary Ombudsman Ann Abraham, although they have consistently said the response would be made during the autumn.

Equitable Life hit trouble when it was ordered by the High Court to fulfil financial promises which it could not afford.

Ms Abraham said the government should apologise for a "decade of regulatory failure" and identified 10 instances of maladministration by its departments.

She said that the various regulators, such as the Department of Trade and Industry, the Government Actuary's Department and the Financial Services Authority, simply failed to use the powers available to them to protect the interests of Equitable's policyholders.

The key to Equitable's problems lay in the policy of its executives who had, for more than a decade, told policyholders that their investments were worth far more than was actually the case.

The Ombudsman, who published her report in July, said a compensation fund should be set up for policyholders, but she did not say exactly how many people might be eligible for compensation or how much they should receive.

Anger over new delay on Equitable Life compensation

The Times, Miles Costello
December 12, 2008

The Government provoked outrage yesterday as it abandoned a promise made by Gordon Brown to decide by the end of next week whether to set up a compensation fund for Equitable Life policyholders.

The decision, already delayed once, means that more than a million policyholders who lost an estimated £4 billion when Europe's oldest mutual nearly collapsed will have to wait until next year to learn their fate.

Equitable Life, which had called for a swift decision, reacted with fury. Vanni Treves, the chairman, said: "It is an outrage that the Prime Minister continues to treat our policyholders with such contempt."

Harriet Harman, Leader of the House of Commons, told MPs yesterday that the Government would not be making a statement on Equitable Life until the week beginning January 12, when Parliament reconvenes after the Christmas break.

"These are very important issues," she said. "If the Treasury is needing to dot the i's and cross the t's, surely it is more important to have the report properly considered rather than on any artificial timetable?"

The statement came just over a week after the Prime Minister pledged to respond before Christmas to a damning report into Equitable published in July by Ann Abraham, the Parliamentary Ombudsman.

And on Tuesday Ian Pearson, Economic Secretary to the Treasury, told a select committee of MPs that the Government would provide Parliament with a detailed response to the report "very shortly".

Although he was consistently pressed by members of the Public Administration Select Committee, Mr Pearson refused to talk about the outcome because it was so close and required a statement to Parliament. He admitted that the Government had made no effort to establish the size of losses suffered by policyholders.

George Osborne, the Shadow Chancellor, said: "He has broken the promise he gave just days ago and betrayed thousands of Equitable Life savers waiting for justice."

The delay, condemned by the Liberal Democrats as "inexcusable", was all the more embarrassing for Ms Harman as she had repeatedly promised a statement "in the autumn".

Equitable Life was brought to the brink of collapse in 2000 after a House of Lords ruling that it must honour guaranteed annuities sold to its customers.

The ruling left it facing liabilities of £1.5 billion and the society was forced to close to new business.

Ms Abraham, who said there had been a "decade of regulatory failure" around Equitable, found three government departments guilty on ten counts of maladministration for failing to spot obvious signs that the society was running into trouble.

She demanded that the Government apologise and set up a compensation fund for Equitable policyholders within six months. The Ombudsman noted that neither the Department of Trade and Industry, the Government Actuary's Department nor the Financial Services Authority took adequate steps to protect the society's customers.

Ms Abraham's office declined to comment on the delay.

However, campaign groups took it as an indication that there was now a chance that the Government was finally taking their case seriously.

Paul Braithwaite, general secretary of the Equitable Members Action Group, described it as an embarrassing U-turn, but added: "This is probably a tipping point. About 50,000 letters have been written to MPs. I have personally seen about 40 MPs. This is a patent injustice."

Mr Braithwaite said an estimated 32,000 Equitable Life policyholders had died since the society shut its doors in 2000 and more than 2,000 of those deaths have been in the five months since Ms Abraham's report.

Delay piles on the agony for Equitable policyholders

Commons statement on ombudsman's report delayed until January

The Guardian, Saturday 13 December

Long-suffering Equitable Life policyholders will have to wait until mid-January to learn if they will receive government compensation, it emerged this week.

Ministers had promised to make a statement on the parliamentary ombudsman's scathing report into what went wrong at Equitable before Parliament rose for Christmas. But on Thursday they said the statement would be delayed until MPs returned in the week beginning January 12.

No reason for the delay was given, and the move came just two days after Treasury minister Ian Pearson told a committee of MPs that a statement would be made in the Commons next week.

In her report, published in July this year, parliamentary ombudsman Ann Abraham called on the government to apologise to Equitable Life policyholders and compensate them for any money they lost as a result of its regulatory failure.

She said she had found evidence of "serial regulatory failure" for more than a decade at the insurer. Overall, she identified 10 instances of maladministration by government departments and regulators.

A Treasury spokesman says: "It is a significant report that took several years to compile. We need to give it the serious consideration it deserves. We will make a statement in the first week back."

The move could be seen as a blow to Equitable Life policyholders, more than 30,000 of whom have died since the insurer ran into problems almost 10 years ago. An Equitable spokesman says: "It is an outrage that the prime minister continues to treat our policyholders with such contempt."

However, Paul Braithwaite at the Equitable Members Action Group (Emag) was more upbeat. He believes the delay indicates ministers realised they could not fob policyholders off with a bland statement telling them to forget any hope of a payout.

"We are finally getting through to the government that we are not going to go away," he adds. Emag now has more than 18,000 paid members - up from just over 10,000 last year.

Equitable payout decision on hold

FT, By Andrea Felsted and George Parker

Published: December 12 2008

More than a million policyholders who lost billions of pounds in the Equitable Life debacle must wait until the new year to find out whether the government will pay compensation.

The government said on Thursday it would delay from next week until parliament returned in January its response to a damning report by Ann Abraham, the parliamentary ombudsman, which set out a series of regulatory failings over Equitable and called for policyholders to be compensated.

Disclosure of the delay comes just days after Ian Pearson, economic secretary to the Treasury, repeatedly insisted to MPs that the response would be made “very shortly”.

It also comes after Gordon Brown had promised in the Commons that a government response on the Equitable case would be forthcoming before Christmas.

The Treasury insisted it would set out its position soon and that “timetabling” ministerial time before Christmas to deal with the issue had proved impossible.

Equitable Life attacked the delay. “It is an outrage that the prime minister continues to treat our policyholders with such contempt,” said Vanni Treves, chairman of Equitable.

Government compensation delay 'betrays' thousands of Equitable Life savers, opposition says

Daily Mail, by James Chapman 12th Dec

Labour has been accused of betraying hundreds of thousands of Equitable Life policyholders who lost up to half their savings in the insurer's near-collapse.

Gordon Brown had told MPs that the Government would respond to recommendations that it pays compensation to those who lost out before Christmas.

But it has shelved its response yet again until the New Year.

A damning report in the summer from the Parliamentary Ombudsman found the Government guilty of a 'decade of regulatory failure' that contributed to the collapse and said losers should be compensated.

Equitable Life was brought to the brink of collapse after the House of Lords ruled in 2000 that it must honour its obligations on policies with guaranteed annuities. It faced liabilities of £1.5 billion.

More than one million policyholders lost an estimated £4 billion as Europe's oldest mutual came close to bankruptcy.

In her report, Parliamentary Ombudsman Ann Abraham condemned the Department of Trade and Industry, the Government Actuary's Department and the Financial Services Authority for failing to take proper steps to protect policyholders.

Shadow Chancellor George Osborne said: 'Even in Parliament, Gordon Brown's word is worth nothing.

'He has broken the promise he gave just days ago and betrayed thousands of Equitable Life savers waiting for justice.

George Osborne says Gordon Brown has broken a promise he gave just days ago

'The Parliamentary Ombudsman's report is a damning indictment of Gordon Brown's failings as Chancellor and we don't have to wait until after Christmas to know that the recommendations should be implemented and savers should be treated fairly.'

Shadow Financial Secretary Mark Hoban added: 'The government has had the Ombusdman's report for nearly five months and have always promised that they would respond to it before Christmas.

'Labour ministers have consistently tried to block attempts by Equitable Life policyholders to get justice.

'We believe that the Government should accept the Ombudsman's recommendations. Gordon Brown has given a bleak Christmas present to struggling Equitable Life policyholders.'

Liberal Democrat MP Jo Swinson, who led a recent Commons debate at Westminster, said: 'More than 30,000 Equitable policyholders have died since the events of 2000. For them, justice delayed has been justice denied. The time has come for the Government to face up to its responsibilities to Equitable policyholders.'