Andrew Turner, the Island’s MP, this week highlighted the total failure of the Government’s handling of the Equitable Life compensation saga.
The Equitable Life Assurance Society almost collapsed in 2000, leaving the future uncertain for tens of thousands of policy holders. Eight years later and the Government have made little progress in deciding when and how Equitable Life policy holders should be compensated. Mr Turner called the Government’s position into question during a debate at Westminster. He asked why compensation was not forthcoming. Mr Turner accused the Government of procrastination whilst those affected by Equitable Life suffered.
Mr Turner said:
“I think it is disgraceful the way the Government is treating those affected by the near-collapse of Equitable Life. The recent Parliamentary Ombudsman’s report looking into the Equitable Life situation made it quite clear that the Government should pay out compensation. In response, the Treasury stated that is was ‘not generally appropriate’ for the Government to pay out in such circumstances and that the process may take a further 2 and a half years, ‘if not significantly longer’. Equitable Life policy holders cannot afford to wait this long.
“I suspect that the Government is waiting for nature to takes its course so that if and when compensation comes, they have to pay out fewer sums of money. Sadly, 30,000 policy holders have already died before justice was done. We cannot let this continue.
“In addition to the unacceptable delays, the Government is set on ignoring the Ombudsman’s recommendations and replacing proper compensation with a means-tested hardship fund. This so-called hardship fund, it seems, will be smaller than an adequate compensation package and will, no doubt, require lengthy means-testing before Equitable Life policy holders see any money. Means-testing is a most unwelcome factor the Government have introduced. In their response to the report they talked of identifying those who have been ‘disproportionately affected’. In effect, it would be the Government who decides who is worthy or help and who is not – but these are people have been prudent and put money aside for their old age..
“The whole situation is totally unacceptable. I call on the Government to get its act together and come to the aid of the victims of Equitable Life.”
The inaction has incensed other MPs, including the Member for Chichester, Andrew Tyrie, who said that the Government had employed “a series of blocking and delaying tactics” in response to the Parliamentary Ombudsman’s report, which stated that the Government should act to compensate those affected. Mr Tyrie also blasted the Treasury’s decision to replace compensation with a watered-down hardship fund.
In his contribution, the Member for Hammersmith and Fulham, Greg Hands, illustrated the asymmetry and unfairness of Government action. He cited the example of the Government’s overnight protection of savers who were affected by the recent collapse of Icelandic banks and compared it to the “glacial progress on Equitable Life”. Echoing Mr Tyrie’s contribution, Mr Hands said that “every step of the way, the Government have sought to block, frustrate and delay the fight for justice”.
Mr Turner along with many of his colleagues and counterparts from across the House have argued that, whilst this was not a party-political issue, the Government had become isolated on the matter.
As the Island’s MP, Mr Turner said later he would stand up for anyone who suffered from the collapse of their pension fund, not just Equitable Life victims.
“It is unacceptable in this day and age that people from across the private sector, who have saved diligently throughout their working lives, can wake up one morning to find they have nothing. There are schemes to protect workers’ pensions, such as the Pension Protection Fund but the Government needs to be proactive in looking for ways to safeguard pensions, rather than waste their time looking for excuses to dither.”
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Contact: Andrew Turner’s office 01983 530808
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