Wed, 28 July, 2021

New rebuff for Equitable victims

Posted: February 3rd, 2019

The Equitable Life disgrace rumbles on, and the govenment came under pressure in a recent Commons debate, as TOM BROWN reports…

MIRROR pensioners who lost out in the Equitable Life scandal have been rebuffed by the government – but a growing group of MPs has vowed to make Parliament think again and pay out on “a debt of honour”.

During the Commons debate on January 31 the government claimed the issue was closed, but a resolution was passed calling on them “to make a commitment to provide full compensation to victims of the scandal”. And the MPs’ action group warned that the government might be forced to do the right thing.

MPs of all parties from all over UK said they had thousands of Equitable Life (EL) losers in their constituencies, and some declared an interest, saying they themselves had lost money.

There are now 238 MPs, and growing, in the All-Party Parliamentary Group for Justice for Equitable Life Policy Holders.

They said many of their constituents have written the most heart-breaking stories about how their lives have been destroyed by this scandal.

The group’s co-chairman Bob Blackman (Harrow East, Con.) told the House – after the flat “No” from the Economic Secretary to the Treasury: “If the Government does not wake up to the fact that, on a cross-Bench basis, we are determined to get justice for Equitable Life policyholders, they may find that if they do not do the right thing it will be forced upon them.”

He recalled that EL encouraged people to move their life savings into unsustainable pension funds by promising bonuses that could not be delivered, and many companies encouraged their employees to invest with EL thinking it was a safe haven.

The parliamentary ombudsman has said this was the most serious case of maladministration she had ever encountered, but under the compensation scheme most [EL victims] received a fraction of what they were due.

Mr Blackman pointed out: “Bizarrely, the government drew a line at 1 September, 1992 for the people who would receive compensation. Someone who took out a pension policy on 31 August, 1992 got not a penny, but those who took a policy out on 1 September 1992 could end up with full compensation. That seems completely arbitrary. Many of these people are particularly vulnerable.”

Some 15,000 of those due money have since died, but 9,200 are still alive and should receive full compensation. Typical was one pensioner, who wrote: “My losses… were £28,942. I received a payment of £6,483.”

The Treasury’s excuse for not fully compensating the EL victims was pressure on the public finances, but MPs argued that as public finances have improved and austerity is at an end, it is now time to compensate the victims of the scandal properly.

However, Economic Secretary to the Treasury John Glen – whose own father died two years ago having been paid only 22.4 per cent of his Equitable Life bond – took a hard line. He said: “I want to be clear: when this settlement was made, it was not subject to future review by the Government.

“No obligation linked it to the future state of public finances. Being in government is about making difficult decisions. These difficult decisions are about how to be fair to both hard-working taxpayers and those in receipt of public spending and services, and where the need to spend public money is greatest.

“The government’s view is that this issue is now closed, and as a Minister I have never been in the business of offering false hope.”

Bob Blackman said the victims of the scandal would be disappointed by what the Minister had said but made it clear the fight will go on: “The reality is that we have a debt of honour. I believe that we should repay that debt.”

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