29 October '02 - Treasury accused of blocking Equitable inquiry - From the FT

Equitable Life action groups believe that the Treasury is blocking an investigation into regulation of the troubled mutual that could lead to government compensation for some policyholders.

All seven of the Equitable Life policyholder groups will lobby MPs tomorrow - more than a year after Sir Michael Buckley, the parliamentary ombudsman, announced he would investigate the regulation of Equitable by the Financial Services Authority, the City watchdog, acting on behalf of the Treasury. Christopher Chope, a Tory frontbencher, recently wrote to the ombudsman, saying:

"There have been rumours circulating that the Treasury has not been co-operating with your investigation, which is adding to the delay. Are you able to throw any light upon the accuracy of such suggestions?"

Sir Michael had previously written to Mr Chope, stating:

"My investigation of a representative complaint . . . is one of the most challenging cases my office has ever been involved in . . .it is likely to be some time before I am able to report to referring members."

Sir Michael is only looking into the actions of the FSA between January 1 1999 - when the Treasury and the regulator took over responsibility for Equitable - and December 8 2000, when it closed to new business.

Paul Braithwaite, general secretary of the Equitable Members' Action Group, said:

"More and more, the Equitable Life scandal looks like an orchestrated Treasury cover-up to deny its culpability in over a decade of misregulation."