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

Press Releases: 15/05/2004 - EMAG says Treasury is still in denial

EMAG says the Treasury is still in denial over Equitable.

On Wednesday May 12th the committee of EMAG met financial secretary to the Treasury, Ruth Kelly, to discuss the ongoing scandal at Equitable Life. Kelly herself has recently effectively given the green light for further investigation by the parliamentary ombudsman (PO) by admitting that the Government Actuary's Department can be subject to the PO's review. But in the meeting with EMAG she had nothing to say about how the re-opened enquiry might be handled, how long it might take, or whether the Government would respond to the inevitable findings of failings by the regulators. Neither did she explain what good could come out of the policyholders' claiming from one another through the Courts or the FOS. The group expressed grave concerns about Kelly having misled Parliament over Lord Penrose's report.

EMAG's chairman Alex Henney said:

"Through selective quotations to the House and in subsequent letters to MPs, Ruth Kelly has misled Parliament about Lord Penrose's report. That she had the brass nerve to tell us that her ministerial statement was impartial and not political, given that she lambasted failings before 1997 and pretended subsequent regulation had been fine, beggars belief! It's depressing when a minister of the Crown puts in writing that: 'Governments cannot be held responsible for the policy decisions of past administrations'."

EMAG presented Kelly with a paper (attached and at www.emag.org.uk) that compared the assertions of the minister to what Lord Penrose had written and also handed over EMAG's own précis of Penrose to Treasury officials. One example quoted was the use of the words "light touch", which make two minor appearances in Lord Penrose's 840 pages yet featured four times in Ruth Kelly's eight-page ministerial statement presenting his report.

Paul Braithwaite, general secretary of EMAG, said:

"The Treasury has been batting Equitable into the long grass for more than five years. First it was the FSA who were set up as the fall guys. Then Penrose was asked to chew over 50 years. Instead of addressing the loss of billions of pounds of policyholders' pensions down to regulatory negligence, we see the same old Sir Humphrey strategy - only this time the problem is being dumped firmly on the Parliamentary Ombudsman, which should park it neatly out of play until after the election."

EMAG's central demand was for an undertaking from Ruth Kelly that if the PO does find maladministration in Equitable Life that led to loss then a Labour government would, like the Tory party, commit to paying compensation. No reply has yet been received.

Braithwaite added:

"We know that personal provision is the future for pensions. The Government is right to help the 60,00 who lost company pension funds at ASW et al and wrong to callously ignore the plight of one million who have suffered at Equitable Life. There's little moral difference between ASW and Equitable but Gordon Brown assumes incorrectly that there are no Labour votes at stake in Equitable."


Notes for editors:

Other comments from Ruth Kelly:

  1. It had not been her intention to give the impression that the government was encouraging policyholders to sue the Society. Policyholders must make their own decision.
  2. The FOS is totally independent from the FSA (!).
  3. Kelly would not be drawn on the reasoning behind the need for urgent new legislation to protect Equitable policyholders from unlimited liability, but said that a consultative process would be announced in July.
  4. The Treasury is of the opinion that the British government has not breached the EU's Third Life Directive.