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Equitable Life

Volume 687: debated on Thursday 21 January 2021

I beg to move,

That this House expresses grave concern regarding the Government’s continued inaction with respect to the injustice suffered by Equitable Life policyholders, the vast majority of whom have only received partial compensation compared to the confirmed losses directly attributed to regulatory failures despite the Government’s acceptance of the Parliamentary Ombudsman’s findings to compensate victims in full in relation to the maladministration of Equitable Life; notes the concern previously expressed by the Public Accounts Committee on the transparency and accuracy of the payments being made to victims; further notes the Government’s failure to fulfil the Committee’s request to publish an intelligible and transparent explanation to policyholders on how to verify the correctness of the compensation they have received; notes examples of grossly inaccurate payments, adjusted only when identified by policyholders, gathered by the Equitable Members Action Group (EMAG); notes the Government’s continued insistence that there have been no mistakes in the methodology for calculating payments to policyholders; and therefore calls on the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee to establish a joint inquiry into the accuracy of the payments made to victims of the Equitable Life scandal.

This debate has been delayed since 26 March 2020 because of the covid pandemic. I thank the Backbench Business Committee for finding the time for it, and the Leader of the House and Mr Speaker for allowing us to participate virtually in debates so that we can explore these issues in some detail. I declare my interest as co-chairman of the all-party parliamentary group for justice for Equitable Life policyholders. I co-chair the group with the hon. Member for Leeds North East (Fabian Hamilton), who sadly has a prior commitment and cannot be with us this afternoon. Our all-party group now has 289 members—almost a majority of the House—which demonstrates how important the issue is to all our constituents.

I want to set out several things during the debate and to frame it appropriately. The Equitable Life case is absolutely unique. There have been other failures of pension schemes and of financial institutions—failures that unfortunately happened, and where, quite rightly, the Government have not chosen to bail out the organisations. But this failure was unique. Back in the 1980s, Equitable Life started what can only be described as a Ponzi scheme. I distance the current Equitable Life board from what was going on in the 1980s, but the company then deliberately set out to create a scheme whereby it promised bonuses that could not be achieved and could not be sustained in the long term.

As a result, over 1 million people invested their money with Equitable Life, in the expectation that it was a safe and secure environment in which to hold their money. That led to a position in which it was all very well while the money was coming in, but when the money had to be paid out in such a way that the scheme was recognised as being unsustainable, action clearly had to be taken.

The Equitable Life case is unique because, of course, it was a conspiracy between Equitable Life, the regulator and the Government of the day. Equitable Life was considered too big to fail because if it did, the Government would have had to pick up the costs. The scandal went on, and the House of Lords was involved in setting aside the position way back in 1999, as a result of which Equitable Life closed to new business in 2000.

Some 10 and a half years ago, I was proud to stand and be elected on a manifesto—as was my hon. Friend the Minister—that promised full and proper compensation for the victims of the Equitable Life scam. Basically, people lost their livelihoods and the pension that they all looked forward to in their old age. It should be recognised that Equitable Life victims are typically retired nurses, teachers, civil servants and factory and shop workers, plus small business owners, who had no choice following the scandal but to set up a personal pension. The majority of those individuals had less than £20,000 in their pension pot.

In 2010, we promised the victims proper and full compensation, neither of which has been delivered. Almost 1 million pension savers have received just 22% of the losses they suffered following maladministration. It is worth reminding the House that way back in 2008 the parliamentary ombudsman ruled that this was the most severe case of maladministration ever seen and that the victims’ loss was directly attributable to a decade of serious, serial regulatory maladministration. It is therefore right that we set out to compensate the individuals affected.

So far, the Treasury has refused to disclose the full workings of the calculations of the payments that have been made. That can hardly be considered transparent. In 2010, we promised that victims’ losses amounted to £4.3 billion and that they would be provided with full compensation. The amount was later revised to £4.1 billion, but so far only £1.5 billion has been allocated for compensation. The Government allocated £620 million to those already receiving an annuity, leaving only £780 million to share among the 1 million other victims, plus £100 million of contingency. That has meant that the pension savers have received only 22.4% of the money that they lost as a consequence of a decade of failure by the Treasury and the financial regulators.

Let us be clear about what else has happened. For some bizarre reason that I have never been able to fathom, those people who were classified as the pre-1992 trapped annuitants—the most vulnerable and the oldest victims of this scam—were excluded from the scheme. It is true that we were able, through lobbying and the good work of Ministers, to ensure that those victims received a one-off payment of £5,000, increased to £10,000 if they were on pension credit. That went some way towards compensating them.

The reality is that to compensate the entirety of those pre-1992 victims would cost no more than £100 million. They were excluded because of the position on their having taken out their policy before 1 September 1992. The question of what happened between them taking out their policies and 1 September 1992 seems bizarre. The ruling seems to have been that they could not have known that this was a Ponzi scheme and they could not have known about the regulatory failure prior to 1 September 1992, so even though they were in ignorance, they should be excluded. In my view, that is an injustice that we need to put right.

In addition, we seek to achieve full payment for the 895,000 traced pension saver victims, which would finally settle the unpaid debts covering their losses that were incurred through no fault of their own. That would cost £2.6 billion and could be phased over time. We also want equality of treatment for the pre-1992 trapped annuitants, which could easily be met with the underspend of the £1.5 billion already allocated.

We need to see full transparency on the Treasury calculations. There remains serious doubt over the accuracy and reliability of the methodology that has been used by the Treasury to calculate moneys owed to qualifying Equitable Life policyholders as part of the compensation scheme that was established under the Equitable Life (Payments) Act 2010. The Treasury should disclose full details of how those calculations were made. The motion calls for the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee to hold a joint inquiry into payment accuracy.

The Equitable Members Action Group, which represents the Equitable Life victims, has uncovered cases where policyholders were significantly undercompensated for their losses due to errors in the Treasury’s calculations. In those instances, no attempt was made by the Treasury to contact the policyholders, and cases were only revealed following appeals made to the independent review panel. In all cases of appeal to the independent review panel, the appeal was upheld and the panel made recalculations that resulted in increased payments made to the policyholder. Not a single appeal has failed to be upheld. The most extreme case brought to our attention so far is that of a policyholder whose losses were calculated as £17, when they were actually £8,661. He won on appeal. EMAG is calling for a joint inquiry into the accuracy of the payments made to victims of the scandal, which is something we all wish to see.

We are all living through an immensely challenging and unpredictable period due to covid and the current economic position. The virus has had a significant impact on people of all ages, but especially the elderly. Many Equitable Life victims are currently confined to their homes, increasingly vulnerable and worried for their futures, which makes the need for this issue to be settled all the more important. This, after all, is a debt of honour. Equitable Life victims were pushed to one side as a direct consequence of the timing of the 2008 financial crisis, which saw the UK’s banking corporations bailed out, while hard-working and responsible pension savers took the hit. The same must not happen again.

Equitable Life victims did the right thing and saved prudently for their retirement. The Government should now do the right thing by them. The current crisis has shown that money can be found when the political will exists. As I said, this is a debt of honour that must finally be paid. The compensation payments would be spent on or shared down the generations, and in doing so would be recycled in the economy, supporting the economic recovery that we all need.

I thank you, Madam Deputy Speaker, for allowing me to introduce the debate. I look forward to hearing contributions from Members on both sides of the House and to the response from my hon. Friend the Economic Secretary to the Treasury.

As colleagues will know, a large number of Members wish to contribute to the debate, so I will introduce an immediate four-minute time limit. When Members are speaking virtually, a clock will appear on the screens of Members participating virtually and the screens in the Chamber. For Members participating physically, the usual clock in the Chamber will operate.

It is a real pleasure to follow the hon. Member for Harrow East (Bob Blackman). I know that he, alongside the Equitable Members Action Group, the APPG, of which I am a member, and others, has campaigned extensively on this issue for several years. I also thank the Backbench Business Committee for granting this debate.

This scandal will affect most, if not all, constituencies represented in this place. It has been, and continues to be, a long battle for justice and recompense for those affected. Many of the victims are now elderly and exhausted from this 20-year campaign. Some of them have sadly passed away. Many of them are former key workers—people whom we in the Opposition have always known are the backbone of our country: nurses, teachers, civil servants, factory and shop workers. They are hard-working people such as my constituent, Mr John Petty.

Mr Petty is 84 years old and a pharmacist. He was sold an Equitable Life pension plan. At the time, he felt it was a decent and reputable firm. After a career working 70-plus hours most weeks, he sold his pharmacy in 1996, looking forward to a happy retirement with his wife. However, soon after, without warning and through no fault of his own, he lost a considerable amount of his pension. At 59 years of age, he had to go back to work. Mr Petty now has to budget every year, as living costs continue to rise but his pension does not. He said: “This whole saga has been disturbing, to put it mildly.” He is not alone. There are nearly 900,000 people still waiting for their losses to be recovered in full.

I acknowledge that in 2010, the then Government accepted the parliamentary ombudsman’s findings in full —that, between 1992 and 2000, Government Departments and regulators were responsible for maladministration, and that victims should be returned to the position that they would have been in had that maladministration not taken place. The ombudsman also found that victims had lost £4.1 billion. However, having accepted the findings in full, the Government then failed to give adequate compensation, offering only £1.5 billion. That is the crux of today’s debate. All victims should be repaid in full, and there needs to be some transparency regarding how the Treasury calculated its payments.

I say politely to the Minister that, at a time when trust in the Government is low, the stubbornness displayed repeatedly by the Treasury in constantly dismissing requests makes it appear either to have a lack of care or to have something to hide. I and others simply cannot understand why, if the methodology used was sound and robust, it cannot be shared. Either way, it is not a good look for the Government. We call today for the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee to establish a joint inquiry into the accuracy of the payments made to victims. Surely, if that would lead to a discovery that the methodology was flawed, it would save the Minister and the Government some embarrassment if they just showed transparency now.

We are not asking for much, but our asks would make an immeasurable difference to the victims. This is about fairness, transparency and trust. People who paid into their pensions in good faith should not be treated in this way. Those who are currently saving for their future need to know that their money is safe and that the Government will intervene if it is not. Just last year, the Chancellor said:

“We care very much about pensioners and making sure they have security and that’s indeed our policy.”

The Minister has an opportunity today to prove that those were not just empty words and that pensioners really are a priority. I sincerely hope he takes that opportunity.

I thank my hon. Friend the Member for Harrow East (Bob Blackman) for the way that he introduced the debate, and I am proud, with him, to be a sponsor of it.

This has turned into a saga, which has now been ongoing for decades. The facts of the original case are well known; we have seen them demonstrated again and again. There were dubious practices. This was a company that was too big to fail. Perhaps, as my hon. Friend said, there was a conspiracy to stop matters coming to light before they did. There was a culture of manipulation and concealment.

In addition to the Treasury’s own 2004 report, there have been other reports: the report from Lord Penrose in 2001, and a report from Ian Glick and Richard Snowden. All those showed lessons to be learned, both in terms of corporate culture in financial services and in terms of the state’s role in overseeing the sector sufficiently. Everyone acknowledges that the company was primarily at fault, but the state has a role and a responsibility in regulating financial services. All business today is conducted on the understanding that ultimately, the law and the state ensure an honest and transparent playing field.

More than a decade ago, in 2010, George Osborne announced a £1.5 billion package in compensation. These payments were to begin in mid-July of 2011, but by the end of 2011, many of my affected constituents had not received a penny. Not only were there delays in payments, but some payments were made for incorrect amounts—sometimes wildly inaccurate. These were caught not by the Treasury, but by policyholders themselves. There is also a lack of transparency over how policyholders can verify the amount they have received is correct.

The Equitable Members Action Group has pointed out:

“There is serious doubt over the accuracy and reliability of the methodology used by the Treasury to calculate what’s owed.”

The Treasury insists that there were no mistakes. If so, how can Government explain inaccurate payments? One hundred and sixty complaints of inaccuracy in payment were upheld, yet EMAG reports only eight received recalculations. The Minister needs to explain how this happened.

We must remember that many hundreds of thousands of policyholders were affected by this scandal. The Government scheme offered only partial compensation. I know that full compensation would be expensive, but as my hon. Friend the Member for Harrow East said, let justice be done and let there be full transparency. People need to save for their retirement. Living off their state pension affords little comfort, and most people do not realistically expect to be able to live off it. Very few young people even think about their retirement. But these policyholders did save for their retirement. They are now getting on, and they are elderly and often vulnerable.

Over the years, I have received terrible, sad letters from many of my constituents, some of them received as much as 10 years ago. Some of them will now, I am afraid, no longer be with us. As one said, and this was nearly 10 years ago:

“This is a matter of urgency.”

Another said:

“Sadly my husband died four years ago without the assurance that…he…would ever be recompensed.”

One wrote:

“I am 89 years old, now a widow.”

So I repeat the call from my hon. Friend the Member for Harrow East: let us have an inquiry from the PAC, let us have the full light of transparency on this and let justice be done for some of the most elderly and vulnerable—and responsible—in our community.

Campaigners have now been fighting for two decades for the compensation they are owed to cover pensions lost due to the collapse of Equitable Life and the UK Government’s administration of the pensions industry. My Kirkcaldy and Cowdenbeath constituents were first let down by their own then MP, one of my constituency predecessors, Mr Gordon Brown, when he served as Labour Chancellor and then Prime Minister. In 2010, as one of their first moves in office, Conservatives and Liberal Democrats promised that money would be forthcoming, but 10 years on, my constituents and up to 1 million more people across the UK are still waiting for that fair and transparent settlement they were promised.

Donald Scott, the east of Scotland regional representative of EMAG, represents dozens of local cases where people are having to work well into what should have been their well-earned retirement. Others have had to sell their homes because of the shortfall in their pensions. He described the Chadwick report as “discredited”, the financial offers made to date as “derisory” and rightly condemned the parliamentary ombudsman offer as a “pittance”. My constituents want to know: how can the Government condemn benefit cheats or abandon 3 million self-employed for fear of cheating, when Her Majesty’s Treasury continues to cheat the victims of its own maladministration?

The victims of this scandal have been cheated. According to Westminster Governments of every hue, they did the right thing and saved diligently for their retirement. The compensation offered to them amounts to 22%—often less—of the losses that they suffered. EMAG has identified cases of serious errors in the Treasury’s sums, such as calculating the loss of one pensioner at £58 who actually lost over £7,000, and another, which has already been mentioned, at £17 when the actual loss was over £8,500.

The party of Government agreed in 2010 to pay £1.5 billion in redress for this scandal, despite accounts estimating losses to be between £4 billion and £4.8 billion and EMAG claiming that the true figure of relative losses is probably in the order of £6 billion. It is no wonder then that nearly 1 million policyholders feel short-changed of their pension and of their retirement.

In 2005, Equitable Life victim Liz Kwantes was so angry at losing tens of thousands of pounds that she had saved to provide financial security in her retirement that she stood for election against Gordon Brown in his and now my home constituency of Kirkcaldy and Cowdenbeath. She stood as an independent on that issue alone. While Mr Brown enjoys a gold-plated pension, she and so many others are still suffering because of the inaction of successive Westminster Governments. It cannot be difficult to imagine why this is causing some to question whether the delay is a cynical ploy to wait for those impacted on to die before receiving the compensation that they are due.

I can assure my constituents that they now have an MP who is firmly on their side, but, to date, that cannot be said of this Government. Last March, I was glad to be joined by 42 cross-party Members who signed my early-day motion, but that will be of little consequence until this Government honour their word and commit to increasing the available funding from £1.5 billion to the £4.1 billion required to cover the Treasury’s own calculation of the true costs of full compensation to all victims.

I am afraid we are all here again, having another debate about Equitable Life and the dreadful way that our constituents have been dealt with. To begin with, I thank my hon. Friend the Member for Harrow East (Bob Blackman), my dear friend, for being so assiduous over this matter and for his continued chairmanship of the APPG. I congratulate the Backbench Business Committee on agreeing to have this debate today, even though it has been delayed for so long. However, I am very glad that we are here again—albeit unbelievably here again, and I see the poor Minister on the Front Bench yet again having to reply. We will hear some calm words from him later, I am sure.

The facts are so well known: 895,000 people have suffered dreadfully through no fault of their own, and the pre-1992 people are excluded as well. This is just a dreadful history of the bad leading the bad, and we hope that the good story that could come out of this really will be listened to by the Treasury. None of us is in a position to chuck money around, but ultimately, we all know that with these people, who are getting older, when the possibility of another £2 billion actually comes down to them and to their families, that money will be recycled straightaway into all our communities and the Treasury will get it back in VAT or whatever way possible.

I am not going to go on, Madam Deputy Speaker, because I know that lots of people want to speak. But on behalf of Michael, Colin, Tim, Kevin, Agnes and Peter, Tom, Patricia and Bob, Neville and Colin—dear constituents of mine who are suffering very, very badly—I really do want to see some wriggle room from our dear friend the Minister on the Front Bench. I sincerely hope that in the mix of conversations that are going on in the Treasury, particularly over the issues of these miscalculations, the fact that people had to appeal themselves, and the rise from 50-odd quid to 8,000 quid, it sees that it is a nonsense and that this pain needs to stop. I will finish there. The good people of South Derbyshire need to know that the Treasury is listening.

I really do appreciate the opportunity to speak in this debate on behalf of the constituents who have contacted me over the years, having been victims of the Equitable Life scandal. As other Members have highlighted, almost 1 million pension savers have received back just 22% of the losses they suffered as a result of colossal maladministration. The Treasury has refused to disclose the full workings of the calculations behind the payments made to date, putting paid to the notion of a fair and transparent programme of compensation, which was promised to Equitable Life victims back in 2010.

The human impact of this scandal cannot be understated, and many of those affected by the collapse of Equitable Life are still bearing the costs of this injustice every day. As others have pointed out, Equitable Life victims are not individuals and families who can afford to write this scandal off as a kind of unfortunate administrative error. Typically, as the hon. Member for Harrow East (Bob Blackman) said, they are retired nurses, teachers, factory and shop workers, and small business owners with less than £20,000 in their pension pot. They put their hard-earned savings pension rights into what they understandably saw as an established, reputable and well-recognised provider, and they were badly let down.

My office has received harrowing accounts—others have said the same—from constituents in recent years, including, recently, from a woman writing on behalf of her husband, who is now 89 and living with dementia. He is one of many who lost thousands of pounds by putting the profits of his small business into an Equitable Life pension, as he was advised. Another constituent, one of the many who received only 22% of their losses, as calculated by the Treasury, describes it in painfully frank terms. He said:

“The amount I have lost would have enabled me and my family to enjoy more things such as holidays before I die.”

He added:

“I was amazed by the revelations that the successive governments had failed to regulate the Society properly. In such circumstances I expected government to ensure the losses sustained by policyholders were made good. I feel particularly incensed by the successive government administrations’ failure to accept the report and advice of their Parliamentary Ombudsman that policy holders should be put back in the position they would have been if the maladministration had not occurred. I am even more incensed by the excuses they have made over many years”.

That point about “many years” is worth emphasising. We are now 13 years on from the parliamentary ombudsman concluding that the victims’ loss was directly attributable to a decade of serious serial regulatory maladministration. We are 11 years on from Equitable Life victims being promised fair and transparent compensation and from the coalition Government accepting that the victims’ losses amounted to about £4.3 billion, before allocating only £1.5 billion for compensation. Many of those who were promised, who deserved and who indeed needed recompense are no longer with us, but the Government still owe it to those traced pension saver victims still with us to find a solution quickly. As one constituent put it to me, “It is a policy decision that is now delaying and preventing action.”

I urge the Prime Minister and the Chancellor to look carefully at the recommendations from the action group and the all-party parliamentary group as soon as possible. Every effort should be made to ensure that those who are owed compensation are identified and that the process of compensation is accurate and transparent. It is important that the Government, once and for all, get to the bottom of what happened, and we all look forward to the Public Accounts Committee and Public Administration and Constitutional Affairs Committee responding to the proposal for a joint inquiry.

I think I can be brief, Madam Deputy Speaker, because there is no question: there is a huge and remarkable degree of cross-party agreement across the House. The question really is: what is the UK Government Minister going to do about it? I warmly praise the hon. Member for Harrow East (Bob Blackman) for bringing the debate forward, and I praise the Backbench Business Committee too. I commend him for a balanced and passionate speech, with which I would very much associate myself. I also congratulate the Equitable Members Action Group and pledge my continuing support for its efforts. It has been very tough in keeping this going and making sure that this injustice is not allowed to be put into the long grass forever.

This is a historic injustice, but there are daily consequences for hundreds of people across Stirling, thousands across Scotland and 890,000 people UK-wide. Sadly, a number of policyholders have died still suffering the losses that were not their fault. As we have heard, there were three interlocking failures in Equitable Life: the initial failure of management, in that they were selling products they should not have been; the failure of shareholder oversight of that corporate entity; and then sustained regulatory failure—arguably collusion—in terms of allowing these products to be sold when they should not have been. There was no failure on the part of the investors. I agree with those who have said that Equitable Life in those days was effectively running a Ponzi scheme, but it was not marketed as such; it was marketed as a sensible, prudent investment, and it was taken up by people who were doing the right thing to provide for their own futures and the futures of their families. They did not make a mistake; they did not invest in a get-rich-quick scheme. They invested in something that they thought was a very sensible thing to do.

The facts of this matter are really not in doubt; this issue has been investigated to death. The parliamentary ombudsman has produced a report on it, we have had the Penrose inquiry, and the European Parliament’s Committee on Petitions has also conducted a major inquiry—and all made the same recommendation that there was an injustice that should be rectified.

The findings have been well ventilated and the fact remains today that a settlement of 22.4% for the policyholders is unjust and unfair. It has daily consequences for hundreds of thousands of people across these islands, and it undermines trust and faith in the pensions sector going forward, so there are real-world policy implications right now. It is high time that the UK Government put this historical wrong to right, and I look forward to hearing some better news from the UK Minister today than we have heard from his predecessors.

An 84-year-old widow in my constituency writes as follows:

“In the year 2000 our pension was £11,120, it is now £3,187. When my husband died in 2015 it was reduced by one third, so this accounts for some of the loss. It continues to go down annually. With inflation, of course, my loss is even greater than this. The state pension increases because of inflation, yet the Government give no consideration to EL annuitants who invested savings to ensure a decent standard of living in retirement.

When we heard that EL were having problems we were not that worried as we assumed the Government would step in. Why was not the same concern given to EL victims as to those now suffering financially because of the covid pandemic? The effect on us is just as great, and probably more long term. It is twenty years since this debacle began.

My life is very different to that we planned when we put our savings with EL: no holidays, no treats.”

This is the sort of issue that gets politics and politicians a bad name, although 280 Members of this House have been trying through the good auspices of the all-party group on Equitable Life policyholders to put matters right.

In his able introduction to the motion, my hon. Friend the Member for Harrow East (Bob Blackman) referred to the miscalculation for one pensioner who, it was said, was due £17 when the actual figure was over £8,500. He could also have referred to another mis-calculation discovered by the Equitable Members Action Group: £58 was awarded, instead of over £7,000.

When mistakes are being made on this scale and of this magnitude, it stands to reason that the Treasury should not be sheltering behind any sort of argument or excuse as to how these sums are calculated. The methodology should be out there, and it should be capable of objective independent verification; it should not be necessary for appeals of this sort to go forward. [Interruption.]

My hon. Friend the Minister, chuntering from a sedentary position, anticipates that I was about to come to him next, and despite his obvious dissatisfaction with the point I have just made, I would like to say that he is a very sincere and fair-minded fellow, but he is the latest in a long line of Ministers who have had to defend the indefensible.

On interrogating my own website, I find that the Exchequer Secretary to the Treasury in June 2010 was Mr David Gauke, and he said then:

“The coalition Government have pledged to make fair and transparent payment to Equitable Life policyholders, through an independently designed payment scheme, for their relative loss as a result of regulatory failure.”—[Official Report, 8 June 2010; Vol. 511, c. 167.]

I said to him at the time how glad I was that that was going to happen. A little later, however, the Financial Secretary to the Treasury, Mark Hoban, had to defend the fact that it appeared that only a fraction of the losses were to be paid. I know that the ombudsman said that it would not be a matter of the entire sum being paid, but who can honestly believe that paying just 22% of a loss is a fair outcome? Both parties are to blame. Like me, the Minister, my hon. Friend the Member for Salisbury (John Glen), was elected in 2010 on a manifesto pledge to settle this matter. It needs to be settled, and that has not yet happened.

It is a pleasure to speak in this debate. I pay tribute to the hon. Member for Harrow East (Bob Blackman) for securing this debate and the Backbench Business Committee for granting it.

Over the past few days, my constituents have contacted me about this issue and have expressed deep concern about the Government’s inaction and the injustice that Equitable Life policyholders have faced. Many policyholders have received only partial compensation and others have not received one penny. This debate is timely as it allows us to press the Government on the importance of pushing forward a full and proper consultation with policyholders and the Equitable Members Action Group to ensure that their concerns are raised, considered and addressed.

In 2010, Equitable Life victims were promised fair and transparent compensation. We have to remember that they were hard-working teachers, pharmacists, shop-floor workers and small business owners, many of whom spent their lives in service, caring for others. They have been short-changed, let down and swindled out of their hard-earned money. It is 21 years since the House of Lords ruled that the Equitable Life Assurance Society must close to new business due to being rendered financially unviable. Since then, more than 1 million people have been left with significant financial losses.

The parliamentary ombudsman concluded in 2008 that the victims’ loss was directly due to decades-worth of regulatory maladministration. In 2010, the coalition Government accepted those losses and allocated £1.5 billion for compensation. That was 11 years ago; 11 years later, victims in my constituency are still waiting for compensation. That is not good enough. In the process of seeking justice and compensation, they have been denied transparency over how their payments have been calculated. Her Majesty’s Treasury has refused time and time again to reveal the methodology that its advisers used to calculate payments.

The victims rightly feel as if they have been swindled out of their savings, and it is very hard to disagree with them. Only 22% has been rendered in compensation so far. That is not right or fair, so I ask the Government to consider the Equitable Members Action Group’s demands. The victims have waited long enough for justice and compensation.

The Government must commit to ensuring full payment to all 895,000 traced pension saver victims. They must commit to ensuring full Treasury transparency over the way repayments have been calculated. They must commit to a Public Accounts Committee and Public Administration and Constitutional Affairs Committee joint inquiry into payment inaccuracies. Finally, they must commit to ensuring that the oldest and most vulnerable victims receive equality of treatment with regard to the with-profits annuity contracts from September 1992.

Victims of Equitable Life’s scandals have waited long enough. Now is the time for fair treatment in compensation. Now is the time to do right by them, so I hope the Government do the right thing.

It is a pleasure to contribute to this debate. I recognise the outstanding work that my hon. Friend the Member for Harrow East (Bob Blackman) has done not only in securing this debate but in his chairmanship of the APPG. Like every Member who has spoken so far, I have constituents who have been affected by this scandal. It is a scandal that people are fighting for what is rightly theirs. The Minister will not be immune to the fact that all contributors from across the parties are reiterating very similar points today, because the situation is affecting every part of the United Kingdom, and constituents are suffering as a result of it.

In advance of today’s debate, I was contacted by constituents who have been very affected. One wrote to me to say:

“My dear father put me into Equitable Life because in 1970 he thought they were the outstanding pensions company and with an honest reputation.”

The constituent went on to say:

“Luckily, he did not put all his eggs in one basket”—

they survived—

“but between himself and his wife they put in a substantial amount of money.”

He concluded by saying that he recalled

“clearly watching it all go wrong and being horrified about what happened. As a result his wife and he both joined EMAG to help fight our corner.”

That is a message I have heard time and time again.

Other hon. Members have suggested that the Government might be hoping that this will quietly go way—as people get older and sadly pass on, this issue will somehow be forgotten. It will not be. I have another constituent who has been working on this issue for his mother for the past 19 years since his father passed away. This issue affects people now and their families are not going to forget about it either.

As we have heard, there are opportunities in the motion today for two of Parliament’s Select Committees to work together to hold an inquiry. I hope they agree to do that and that we resolve some of the issues, but we need more than just another inquiry. The facts are the facts. They are very clear in this case. An inquiry would try to push the Government further, but I do not think that should be necessary. The previous coalition Government made it clear that an injustice had been served and that they were going to compensate people, but it is simply unacceptable that people have received just 22.4% of their claims. How would any of us feel if, at the end of the month, our salary was only 22.4% of what we expected it to be? These people put their faith and trust in a scheme, and, through no fault of their own, it has been devalued to such a level that the payments are simply unrecognisable in comparison with what they expected.

On behalf of my constituents here in Moray, and many people across Scotland and the rest of the United Kingdom, I hope the Minister listens to what has been said in Parliament today. He knows I have corresponded with him on many occasions on behalf of local constituents. This issue is not going to go away. I know he is an excellent Minister who takes his job extremely seriously. I hope he will once again look at the issues put forward by hon. Members from across the House, so we can finally resolve this scandal and give closure to many of the people affected right across the United Kingdom.

I am pleased to have the opportunity to support the motion by my hon. Friend the Member for Harrow East (Bob Blackman) and I applaud the efforts of the Equitable Members Action Group to date. I thank the Backbench Business Committee for allowing this debate.

One of the most rewarding parts of being a local MP is the ability to bring local issues that affect our constituents to the attention of Ministers. On a daily basis, I get to speak to members of the public, such as Harry Cruddace from School Aycliffe, who ask us, as their representatives, to support them. Harry represents the many other victims in Sedgefield and across the UK. While running his own successful business, he made financial decisions he thought would enable him to retire properly, including a pension fund with Equitable Life. As a result of its inability to deliver on its promises for Harry, he was forced to work for an extra six years to the age of 71. That took away a number of his best retirement years that he had planned to spend with his wife.

In 2010, Harry, along with about 1 million Equitable Life policyholders, was promised a fair and transparent compensation. Given the parliamentary ombudsman’s 2008 conclusion that the victims’ losses were directly attributable to a decade of regulatory maladministration, this was a welcome and much-needed Government intervention.

I am not going to reiterate all the details that have been so eloquently communicated by other Members, but the victims of Equitable Life’s inability to deliver on its promises included police officers, nurses and small business owners who were trying to invest prudently in a happy retirement with what was at the time a respected household name. I ask the Government to consider extending the financial support to fulfil the 2010 commitment to a fair compensation to Equitable Life victims, ensuring that pensioners have security in their retirement—something that the Chancellor reiterated on 6 October was a Government priority. The benefits of this would be twofold. First, as a Conservative, I believe that those who made the decision to invest in their and their family’s future, such as Harry, should benefit from that decision. Receiving the remaining 78% of compensation would afford many of the victims the ability to have the comfortable retirement that they had planned for decades ago. Secondly, Equitable Life policyholders receiving this compensation package could act as a much needed stimulus to the country. These are people who will spend this money when they get it; it is very unlikely to end up in savings. It can therefore stimulate part of the economic recovery by helping our small businesses, pubs and restaurants.

I ask that the Government commit urgently to the inquiries being proposed, but also that they put thought into how funds can be made forthcoming to the victims of this scandal as urgently as possible to give some relief to the people of Sedgefield and across the country who have been victims of this scandal.

It is a privilege, but not a pleasure, to take part in this debate, it being 20 years on from the moment when more than 1 million policyholders lost part of their pension savings. They are still waiting for full transparency about what happened and justice regarding the retirement they planned and thought they were saving for. They are victims of maladministration.

We have already heard how Equitable Life policyholders who did not have with-profits annuities have received compensation worth only about 22% of the loss they faced, how in 2008 the Parliamentary Ombudsman recommended that policyholders should be put back in the position they would have had, and how the coalition Government promised to do so. Numbers and statistics are an easy way for us to hide what that all really means. Hard-working people who have done nothing other than seek to provide for themselves and their families after years of work have had their lives turned upside down. Nurses, teachers and war veterans have all been left behind—and now, more than ever, we have seen exactly what being left behind can mean. Yesterday, in his inauguration speech, the new President of the United States, Joe Biden, asked Americans to walk in each other’s shoes. That is advice that we would do well to listen to in this place. We should put ourselves for a moment in the shoes of those whose lives are behind the statistics—pensioners whose lives have been affected.

I have personal experience of knowing how important retirement pots can be at any age. At the age of 45, my mother was suddenly alone with three daughters. She worked miracles for us, none of which would have been possible without my father’s pension pot. He was only 44, so it was not huge, but if it had been depleted by maladministration in the way that these pots have been, our lives would have been very different. Let us not forget that Equitable Life pensioners are not the only pensioners in this country who have been let down by successive Governments. I am sure that women who are approaching 70 and have had their state pensionable age changed feel a great deal of sympathy for the Equitable Life pensioners. There are so many in a generation who have been let down in their later years.

We must not now use covid or Brexit to shield us from the problems that still exist. They have not gone away, and, if anything, those involved will now feel further away from the Government than ever before. A constituent who wrote to me was one of the many people across the country who did not receive the full redress—in fact, less than a quarter of it. As grateful as they were, this is still a drastic depletion of their retirement funds. That is acknowledged by the Treasury but blamed on the state of the public purse—a bit much when we consider some of the spending decisions that have been made since.

Perhaps the worst thing in all these years, which have seen protests, lives lived and lives lost, is that this could have been avoided. No one should be penalised, particularly in their later years, for having done the right thing. The Treasury has not been transparent enough about how these payments came to be. It has not given this due diligence. Over 1 million people deserve better. Many people have had any semblance of financial stability whipped out from underneath them in what was and is one of our worst financial scandals. They deserve better. They deserve more than just another inquiry.

The coalition Government decided that people should be compensated. We must fulfil that now; it is our job in this place not to hinder it. We are duty-bound, morally bound, to help to fix this.

I thank my hon. Friend the Member for Harrow East (Bob Blackman) for the incredible campaign that he has been fighting for so many years to get justice for victims of a scandal that has caused so much pain to so many. We talk about numbers and sums of money, but this is about lives destroyed and dreams shattered—people who were responsible, and spent their lives saving for their and their families’ futures, only to have it stolen away from them. They say you cannot buy happiness and that money isn’t everything, but these are life-changing sums, years of work and saving, and there are huge impacts on people’s quality of life in later years.

I recently met a group of constituents who are affected by this issue. I was told that the last time they had met there had been many more of them, because for some of the victims who lived in my constituency it is already too late. They will never see their money; they will never know justice. One man shared his story with me. It is a story that I will never forget and one that he is happy for me to share with the House.

Tom Coulson was born in 1935 to a working-class family. The son of a furnaceman, he lived through the war and is a grafter; he worked hard and did the right thing, saving to provide for his family’s future. At 15, he got a job as an apprentice. At 28, after 10 years of night school, he qualified as a chartered mechanical engineer. At 39, he set up his own design and project management company, and began planning for his retirement at 60. At 56, his wife persuaded him to retire and put all the capital they could spare into an Equitable Life pension scheme. He is now 85 and life is not what he planned for, worked for, saved for, or deserves. Eighteen months ago his wife, Anne, was diagnosed with vascular dementia. She is wheelchair bound and living in a care home, reliant on funding from the local authority.

Tom has two assets. The first is his home. If he sells this, half will go to local authority assessment. He also has a joint life-assured investment plan, and any early withdrawal could see 50% taken into account by the local authority. Expenses on the upkeep of his home—and, for example, the £4,000 spent on skin cancer treatment last year—mean that he is now eating away at his working capital, promising future hardship, which could be prevented if the Government settled this obligation.

Tom’s losses would have been a life-changing amount over the years. If recovered now, those sums would make a huge difference to Anne and Tom’s life, allowing them to spend more time together, after 62 years of marriage. Mr and Mrs Coulson have lost a heartbreaking £264,000. I beg the Government to do justice: give these victims what they worked for, saved for, need and deserve.

A scandal like the collapse of Equitable Life has unimaginable repercussions for the lives of the victims, many of whom live in my constituency of Liverpool, Riverside. Ten years ago, when the life insurance company collapsed, policyholders lost billions of pounds in total, and the Government were forced to pay more than £1 billion in compensation, but the cost to the lives of those affected was far greater: pensions wiped out; lives destroyed; thousands dying before they received justice. People who had strived all their lives to save for a comfortable retirement had their plans and dreams shattered overnight—a burning injustice and one that undermined the wider confidence in saving for retirement. Everyone has a fundamental right to grow old with dignity and security, to relax and enjoy the fruits of a lifetime of endeavour. These victims were robbed of that opportunity.

It was the Government’s maladministration that played a role in the collapse of Equitable Life, so it should be the duty of the Government to ensure that the victims are fully and fairly compensated, and that this never happens again. Every effort must be made to ensure that those owed compensation are identified, and that the process is accurate and transparent. The Equitable Members Action Group wants full payment for 895,000 traced pension saver victims, finally settling the unpaid debt covering their losses. Current levels of complaints and appeals clearly demonstrate the inadequacy of the system. A freedom of information response exposed that in every case where a complaint had been raised—[Inaudible]—victims of the Equitable Life scandal, it resulted in an increased payment to the policyholder.

On top of this, the scheme has been unable to trace over 100,000 policyholders who are eligible for reimbursement. Many of them will now be in their 80s and 90s. As such, I welcome the proposal for a joint inquiry into the accuracy of the payments made, and I look forward to the response to that proposal from the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee. Would the Government support such an inquiry?

A scandal such as Equitable Life should never be allowed to happen again, yet just last month the Government had to establish a new compensation scheme for London Capital & Finance investors, many of whom lost their entire life savings. Given the apparently flawed methodology behind compensating the victims of the Equitable Life scandal, what steps are the Government now taking to ensure that those eligible for compensation in the London Capital & Finance investor scheme are not short-changed and can have full faith in the compensation process? What action have the Government taken to make sure that such firms are properly regulated from now on, to ensure that such a devastating loss never happens again?

People approaching retirement deserve security and the peace of mind that they can grow old with dignity and comfort and that the savings they put away during decades of hard work will be safe. Flaws in our financial regulations have been exposed in such a disastrous way, and we cannot, a decade down the line, be found again to have been asleep at the wheel. We must tighten regulations, protect savings and uphold people’s right to dignity in old age, and we must ensure that the 2,000 victims of Equitable Life in Liverpool, Riverside receive fair and transparent compensation.

I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this debate and his many years of campaigning alongside the members of the Equitable Members Action Group and the APPG on justice for equitable life policyholders.

The Equitable Life scandal has deeply affected hundreds of thousands of people throughout the country and the lives of many of my constituents in Putney, Roehampton and Southfields. As has been said, these people are not rich; they are typically hard-working retired nurses, teachers, civil servants and factory and shop workers. The majority of them had less than £20,000 in their pension pot, so the scandal has affected them deeply.

The scandal has rumbled on for decades without satisfactory conclusion. When the Equitable Life Assurance Society closed to new business in 2000, it left its 1 million policyholders with pensions that were worth far less than they had been told, resulting in significant suffering and financial losses. Many of the affected pensioners are elderly, and many have died or will die without ever having received adequate compensation, so the time for action is now.

One constituent of mine wrote to me in despair at how she had received only a quarter of her pension and was worried that, at 91 years old, there was not much time left for justice to be done for people like her. Last week, I met affected constituents, who said that they had invested in good faith—they had trusted and Equitable Life and the regulatory system, but have lost money that they need now more than ever.

Following investigations of the scandal, the parliamentary ombudsman ruled that the losses were directly attributable to a decade of regulatory maladministration, including by the Government Actuary’s Department in the Treasury. In 2010, the coalition Government accepted the ombudsman’s recommendations in full and announced the creation of the £1.5 billion scheme to pay compensation to Equitable Life policyholders. However, given that the losses were £4.3 billion, that amounted to just 22.4% of the losses of the 895,000 traced pension savers. All those victims should be repaid.

I know that money is tight at the moment, but that cannot be an excuse for not paying. As one of my constituents pointed out, the tax Department would not accept him saying, “Sorry, I can’t pay my taxes—it is too expensive,” but that is, in essence, what people feel the Treasury is telling them. There were errors in judgment in existing payments and, as has been said, all the appeals in that respect have been upheld, so it is time for a joint inquiry into the errors in payments.

Now is the time to settle this debt and right this wrong. We may be living in an economically tumultuous period, but the current crisis has shown us that money can be found when the political will exists. It has also shown us the value of stimulating the economy by putting money directly into people’s pockets when they need it the most. As one of my constituents said, “If you find something that is wrong, you should rectify it. This has undermined the whole system. Why would I tell my children to invest in pension schemes when this can just happen again?”

The Government owe it to the victims of the Equitable Life scandal in Putney and across the country to get this right, to fulfil the Government’s promises, and to compensate the victims at long last.

I am grateful to the Backbench Business Committee for allowing this debate, and I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on securing it, and on his co-chairmanship of the all-party parliamentary group for justice for Equitable Life policyholders, which I have been happy to join. He very eloquently set out the background to this matter in his opening speech, and I associate myself entirely with his comments. As he said, this situation has its origins in unique circumstances, and as the parliamentary ombudsman found in 2008, the victims’ losses have been directly attributable to a decade of serious and serial regulatory maladministration.

These matters have been well covered so far, but I would like to make three brief points. The Equitable Members Action Group has raised doubts about the accuracy and reliability of the Treasury’s methodology, and how it has been used to calculate the compensation payments made. I hope that can be addressed in the interests of open government, so that concerns in that area can be resolved. I also note the action group’s call for a joint inquiry on payment accuracy by the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee. I am a member of the latter Committee, and I note that call. I am sympathetic to it, so that this can be looked into further.

This is a very technical matter, but I think we should look at the human side of it as well. A recent Prime Minister said:

“The British people are decent, sensible, reasonable and they just want a government that supports the vulnerable, backs those who do the right thing and helps them get on in life.”

That really sums up some of the Equitable Life victims I have met in Gedling. I have met only a small handful of the 2,300 victims and their dependants in my constituency, but they come across as quiet, unassuming people who do not want to cause a fuss, and tried to do the right thing, work hard, and make the right preparations for their retirement. It is time that we tried to address their valid concerns. Equitable Life had a series of adverts in the early 1990s that traded on the solidity of its investments. A 1993 commercial finished with the slogan, “You profit from our principles”. That appears not to have occurred, and I hope this is something that we can finally begin to address.

I would like to try to give everybody on the list a chance to speak. Therefore, with apologies to the right hon. Member for Orkney and Shetland (Mr Carmichael) for giving him no notice whatsoever, I now have to impose a time limit of three minutes.

Thank you, Madam Deputy Speaker. I am delighted to take part in the debate, so absolutely no apology is necessary.

Here we go again. I think I have lost count—as you no doubt have, Madam Deputy Speaker—of the number of these debates we have had over the years. I congratulate the hon. Member for Harrow East (Bob Blackman) on obtaining the debate and on the work that he does with the all-party parliamentary group for justice for Equitable Life policyholders. I hope that if those on the Treasury Bench take away no other message today, they will take away this one: this case is simply not going to go away. The number of people who are affected will undoubtedly dwindle over the years, but this case will not go away until their claims are met and justice is given to them.

Others have made points about the handling of claims, and constituents who are in touch with me tell very much the same story.

There is just one point on which I would like the House to focus this afternoon, and that is the need for transparency from the Treasury on the compensation that it has paid out. The principle was accepted right at the start, as far back as 2010—I was Minister in that Government, throughout the five years of the coalition—that there would be compensation for the maladministration. The source of the anger—as I say, it will not go away—is the fact that getting on for 11 years later, we have not seen full compensation.

The importance of this case goes beyond those who lost out under Equitable Life, because such treatment of people in similar cases continues to this day. Over the last few years, I have been working with constituents and other people throughout north-east Scotland who have lost money as a result of the fraud of Alistair Greig, director of Midas Financial Solutions in Scotland. He was eventually jailed for 14 years by the High Court in Scotland for running a Ponzi scheme. The financial services compensation scheme has started paying out compensation to the victims of that fraud, but let us just say that it did not do so willingly. My constituents and many others have had to put together and invest more than £2 million in legal fees to get the FSCS to the point where it was prepared to pay out.

That is the sort of situation that we find ourselves in when we have a culture—an attitude among regulators and others—in which it is okay to leave the little people, who have smaller claims, swinging in the wind. That is the attitude that has to change, and that is why Treasury transparency is crucial here.

I add my congratulations to my hon. Friend the Member for Harrow East (Bob Blackman) on securing this important debate. The long-running Equitable Life scandal has impacted a tragically dwindling number of people in my constituency. When I was first elected in 2010, I would have had numerous emails in my inbox asking me to attend a debate such as this, and to speak up in favour of justice and fairness for Equitable pensioners. Now there are very few. Tragically, many have died, and others have simply given up—given up waiting and given up hope.

These are people who did the right thing, or thought they had. They invested for their retirement and saw their savings cruelly ripped away from them decades ago. Back in 2010, the Government pledged to sort the problem once and for all, and I am often reminded that that was the manifesto on which I stood. In my constituency, the retired nurses, teachers, shop workers and small businesspeople we have heard about this afternoon are still waiting. One of the things that they call for most is full transparency on the calculations done by the Treasury on the moneys that were owed to qualifying policyholders as part of the compensation scheme set up under the 2010 Act. There remains significant disquiet from a number of my lovely Equitable Life action group constituents as to how calculations about their entitlements were made. As we have heard repeatedly throughout this debate, there have been significant errors. A joint inquiry could well give my constituents, such as Reg, the answers that they want.

Little did I think when we passed this Act in 2010 that 11 years later, in 2021, we would still be fighting for justice for this small and, as I said, dwindling group of pensioners. I know that my hon. Friend the Minister will want to do the right thing. He is a good Minister, and I hope that this afternoon he can give some hope to my constituents who are still waiting in hope that the Government will deliver on their 2010 commitment.

So here we are again. First, I would like to endorse the calls for an inquiry on some of the wildly inaccurate payments received by Equitable Life pensioners. That transparency is needed by those who are dependent on what they get through the Equitable Life scheme run by the Government for any kind of income in retirement. That is so important.

This is a reminder of how Governments of various colours have let these people down. It is clear to me that the Government, in their failure to regulate Equitable Life, allowed people a false sense of security when investing and doing what Governments of all shapes, sizes and political hues had encouraged them to do: provide for their own retirement. Those people then discovered, to their horror, that their plans for retirement—often modest plans—had been destroyed.

The Government’s first response was to provide about half a million pounds of support. I am proud that my colleague Vince Cable was instrumental in ensuring that an additional £1 billion was provided in 2010, but even that is far short of the £4.5 billion that the independent ombudsman recognised was owed to the people who have been so cruelly hit by the Equitable Life crisis. People who have been encouraged to save and provide for themselves and their families in retirement, and who then dutifully take that advice, should not be punished and left to a retirement in penury because the Government of the day did not do their job in regulating Equitable Life properly.

In my community alone, 2,000 victims of the Equitable Life scandal are making the best they can of a reduced circumstances retirement. It seems to me that the Treasury is callously banking on the number of people in receipt and deserving of compensation reducing year on year. That is a tragedy, and the Government should step up right now. It is not only a historical injustice to the 2,000 people in my community who are Equitable Life pensioners that they have not been given their due payments and the retirement that they had saved and provided for. It is also damaging to our communities. Let us remember that if those 2,000 people in Westmorland and Lonsdale were to receive the payments they were due by this Government, it would make a big difference to our local economy. Morally and practically, it is right for this Government to do what the independent ombudsman called for some years ago and pay the full £4.5 billion to those pensioners.

I thank my hon. Friend the Member for Harrow East (Bob Blackman) for securing the debate, and I take this opportunity to thank very much indeed my predecessor, Sir Oliver Letwin, for all the work that he did on behalf of West Dorset constituents on this matter.

What is before us today is, I am afraid, a shocking example of regulatory failure, and we need to make sure that it does not happen again. It is also about us in this place achieving justice and fairness for many hard-working constituents who have saved for much of their lives. When approximately 2,000 of my constituents began contributing to their pensions at the beginning of their working lives, never did they think that they would lose their savings due to the errors of a company to which they entrusted thousands of pounds. Approximately 500 of my constituents have not received compensation at all. Most people have received around 22% of their pensions, but when we consider that most had less than £20,000 in their pension fund, the desperate nature of this scandal is clear; 22% of £20,000 is £4,400, which is nowhere near enough to retire on.

My constituents affected by this scandal did not work hard to play hard. They worked hard to save hard, and those savings were for their pension. However, the loss of £30,000 from one constituent’s pension fund meant that he had to work right up to the point at which he was physically unable to do so anymore. His wife, sadly, passed away before this injustice was rectified, which I am very sorry to hear. Many other constituents have similar stories.

Equitable Life is not the only fund that has been mismanaged. I also have many constituents who were employees of AEA—Atomic Energy Authority—Technology. They were given incomplete information about the switching of their pensions from the UK AEA scheme, which was backed by the Treasury at the time, to the new scheme, which I am afraid was not. The AEAT went bust in 2012, and the pensions were transferred into the Pension Protection Fund in 2016. The difference in indexation for inflation has seen people’s pensions eroded greatly, and in some cases by up to 20%.

There is a clear need for the joint Committee inquiry that my hon. Friend the Member for Harrow East is proposing. I very much encourage the Minister and the Government to do all they can. Once again, it is important that we make sure that we focus on achieving fairness and justice for those constituents who have been wronged.

I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this important debate, which was scheduled to take place early last year, but has been much delayed, and I think that delay is at the heart of this whole issue. We now find ourselves in a situation where many of the Equitable Life policyholders have been retired for some time. Sadly, as other Members have alluded to, many have died, particularly the older policyholders in the pre-September 1992 with-profits annuity group, who never received any compensation at all.

The last time that the hon. Member held a debate on this issue was in 2019, and it is a tragedy that each time a debate is held, the number of policyholders who would benefit from the compensation is decreasing. That is simply not right. Time is limited, yet there has likely never been a time when the compensation would make more difference than right now. I know that is the case for my constituents who were Equitable Life policyholders.

The coronavirus pandemic has placed an enormous strain on financial resources for many people, and we have never experienced an economic case like this one. One group who were particularly impacted by the Equitable Life scandal have also been largely left to face the full force of the economic impact of covid without support: small business owners.

I believe there are some common themes between successive Governments’ treatment of Equitable Life policyholders and the provisions and support for the self-employed and small business owners during covid. The first is arbitrariness. My constituents who were policyholders cannot understand why they should be merely given 22.4% compensation; they have been excluded. Secondly, there is the refusal to expand support, justified by reference to the public purse. When the Government have made a commitment to provide support, as they did when they accepted the Parliamentary and Health Service Ombudsman’s findings to compensate victims in full, they must follow through on their word. Thirdly, there is the very large degree of cross-party support. According to the website of the all-party parliamentary group for justice for Equitable Life policyholders, 282 Members of this place are members of that group. That is nearly a majority of the House, and plaudits for that should go to the determined campaigning of the APPG itself and EMAG.

Non-binding motions have previously been agreed by this House in debates just like this one, calling on the Government to make a commitment to provide full compensation, yet we find ourselves in the ludicrous position where, despite all that, there still appears to be no willingness from the Treasury to look again at the issue of compensation. How many more debates do we have to hold? How many more motions do we have to pass? How many more Members will have to join the APPG?

As I said earlier, delay is incredibly damaging, so I urge the Government to look again at the issue. I look forward to hearing from the Minister and to him making a commitment to providing full compensation. The Government should do so now, because we clearly cannot afford to waste any further time. This compensation has never been more needed. Justice delayed is justice denied.

May I congratulate the hon. Member for Harrow East (Bob Blackman) on setting the scene? With every one of these debates that I have attended, unfortunately there are fewer of my constituents who would receive the benefit. That is why today we again ask for the same thing.

In 2010, Equitable Life victims were promised fair and transparent compensation. To date, almost 1 million pension savers have received just 22% of the losses they suffered following the maladministration. That is hardly fair. Her Majesty’s Treasury has refused to disclose the full workings of its calculations of the payments that have been made, and that does not seem to meet the requirements that the Government set that all dealings must be open and transparent. I again call on the Minister and the Government, as he knows I often do, to make clear the method by which calculations are made, to ensure that victims do not continue to be left in the dark.

I have read of cases where policyholders were significantly undercompensated for their losses due to errors, yet I am given to understand that the Treasury made no attempt to contact those individuals. It is very frustrating. It is only upon appeal to the independent review panel that recalculations are made. What is of note to me is that every case has resulted in increased payments. Perhaps there is something there that the Minister could take on board. The process must be reassessed by the Treasury.

I have always found it difficult to reconcile the fact that, although losses were found to amount to £4.3 billion, only £1.5 billion was allocated for compensation for the victims. I have heard that the Government have allocated £620 million to those receiving annual payments, leaving only £708 million to share among 1 million other victims along with a contingency fund of £100 million. The working out of this has been explained to me: savers receive only an average of 22.4% of the money that they lost. Surely, Minister, we can and must do better. Those who have saved hard and consistently and prepared for their later life have been left disenfranchised. This is an issue for the Government and for the Minister directly to answer. Our constituents who contact us regularly have not forgotten about this. Their hard-earned savings have been lost.

The campaign has asked for numerous ways of helping victims, one of which is equality of treatment for those who took out with-profits annuity contracts before September 1992. They are the oldest and most vulnerable victims, and this could be easily met from the £140 million underspend of the £1.5 billion already allocated by Parliament.

Through you, Madam Deputy Speaker, I ask again that this matter is considered by the Minister and his team. Society is always marked by how it treats those who are less well off. Here is a supreme example of those who have saved hard, worked hard and risk losing out. I ask the Minister to please look at this again.

When people work hard and invest in their retirement, we praise them for doing the right thing. In so doing, these people tend to make fewer demands on the state in later life because of their financial independence. A constituent of mine has lost a small fortune because of the Equitable Life scandal. He received back only 22% of the sums he had invested, which will clearly negatively impact on his retirement.

I have been invited by my local EMAG group in Dudley to speak this afternoon. I have listened to and considered their concerns and, of course, I wish to represent them and support them as best I can, without ignoring just how generous the Chancellor has been in supporting the country through covid. I know that there are many competing priorities for the Treasury and that our public services are critical to tackle this dreadful pandemic. I am sure that Ministers and the Chancellor have enormous sympathy for those who have lost out because of the Equitable Life scandal. I understand that the Equitable Life payment scheme closed to claims in 2015. Taking into consideration the hardship that innocent members have suffered, I would welcome the thoughts of Ministers as to whether any consideration could be given to reopening the challenge mechanism. I ask this in the full knowledge of the financial predicament that we find ourselves in as a result of the pandemic.

People have been wronged, and my plea is that, when circumstances allow, we revisit the situation with a view to helping people who have still lost out. It would be very helpful if we could revisit the calculation of the compensation payments made, as concerns have been raised by the Public Accounts Committee. Moving forward, it is also important that future commissions of this sort are clearer and more transparent in publishing the calculation comparators that guide compensation payments.

I thank my hon. Friend the Member for Harrow East (Bob Blackman) for his tireless campaign. I do not think that anybody participating in this debate could fail to be moved by the stories that we have heard today. As one of my constituents said:

“As time passes and age increases, the volume of our voices are decreasing, too, so we need to keep the volume of our situation loud and clear, and look to you being one of those who will raise yours.”

Quite literally, we have heard time and again of good, honest, decent people who, after saving diligently all their lives, have had that ruined. What is striking is that this is not just about a select few or the better off, but everyone in society being affected. A total of 900,000 people affected by maladministration received just 22% of their entitlement. We know the story, and we know that it is wrong. As the MP for North Norfolk, where many people have enjoyed, and are enjoying, their retirement, I am staggered by just how many constituents have been affected by this terrible situation. I have 2,800 policyholders and dependants in my area alone. Listening to their stories is heart breaking. Some have even given their permission for me to use their names. 

Take Terry, who is 82. He retired as a plumber at 60 when his knees were too bad to continue working. He started saving for his retirement in 1979, diligently putting away, but today all those years of saving amount to virtually nothing given the collapse of Equitable. Terry told me that he cannot afford holidays and has not had a holiday abroad for 20 years. How can it be fair that we ask people in society to take responsibility for themselves, good people like Terry save for a pension, and then, through no fault of those people’s own, the pension company and the regulator fail in their duty to protect them?

We know that the Government accepted in 2010 that the victims’ losses were in the order of £4.3 billion, but the £1.3 billion set aside has not gone far enough for those constituents, such as mine, who are having their happy retirement wrecked. It is pretty clear not only that Equitable had been misleading customers with over-the-top returns and promises, but that the regulator had failed to protect customers, knowing quite well that the accumulated pension pots would not be worth what customers expected.

Let me quickly conclude with a heartbreaking story of another of my constituents. He too saved for years, but his pension is just a third of what it should have been, and it contracts every year. I will not reveal his name, but of all the stories, this encapsulates the dire situation that so many are left in. He said:

“I am sad that my wife died in 2007 but perversely, glad she hasn’t lived to see that all the sacrifices she made to allow our pension pot to grow have all been in vain. She gave up many of the more enjoyable things in life because I said we would benefit in retirement. I could cry when I think about it. But I live in the hope that one day soon justice will be done and the government will pay its debts. I very nearly didn’t make it a few weeks ago when the doctors thought I was to become another victim of Covid19. But I came through the night to everyone’s surprise and now I just want to have what is mine and live a few years longer and enjoy them.”

I pay tribute to my hon. Friend the Member for Harrow East (Bob Blackman) for securing this vital debate. Ever since my election to this place just over a year ago, I have been contacted by dozens of constituents from across Keighley and Ilkley asking for my support on this issue, and they have it. The Equitable Life scandal has gone on for far too long.

Fundamentally, this comes down to one simple principle: fairness. When we save for retirement, we expect the money that we invested to be there for us, but the customers of Equitable Life, even after compensation, have been left with just a fraction of what they were owed. The final report on the Equitable Life payment scheme in 2016 set out that compensation payments to policyholders equated to only 22.4% of their relative loss. Some victims have spent years campaigning for compensation. Very sadly, some people died before they could receive the compensation they were due.

In 2010, when the parliamentary ombudsman found in favour of savers, stating that there had been a decade of maladministration, many savers breathed a sigh of relief, expecting to be compensated for their losses. While I recognise that in 2010, the coalition Government took significant steps, despite tough economic circumstances, by delivering £1.5 billion in a compensation scheme, there were inherent unfairnesses in the way the scheme was administered. Some policyholders rightly received their full compensation, but others were unfairly excluded. These are people who have worked hard and form the backbone of our country.

I accept that this is not an easy position for the Government. Of course we have to strike a fair balance between the interests of policyholders and taxpayers. Our public finances, especially in the coming years, will be put under enormous strain as we recover from the terrible pandemic. But what better place to start building back better from the pandemic than delivering a fair and just outcome for these savers?

I know that the Government have already taken action to do all they can to prevent a scandal like this from happening again. I know that the Pensions Minister, my hon. Friend the Member for Hexham (Guy Opperman), has worked hard as part of the Pension Schemes Bill to protect customers from reckless actions of pension bosses. But I urge the Economic Secretary to the Treasury to look at this again and see what more action can be taken to compensate those victims. Has he considered, for example, reopening the challenge mechanism, which allowed policyholders to identify errors? No one should be penalised for doing the right thing. We owe it to the Equitable Life generation to stand by them.

This is an incredibly emotive and serious topic, and I wish to start in the only way possible, which is to thank EMAG for all the fantastic work it does, and also to commend the hon. Member for Harrow East (Bob Blackman) for once again bringing this most important of issues to the Chamber, of course with the assistance of the Backbench Business Committee.

Almost immediately on my election to this place in 2019, I, like many others, received correspondence from constituents who had been impacted by this appalling scandal. I will be honest and say that I was not fully clued up on all the specifics; after all, I had barely started secondary school in the year 2000, when this issue really took hold. However, having trawled through the record books, it quickly became apparent to me just how much effort Members on all sides of the House have put into trying to gain justice for those impacted—in the Chamber or through the APPG—and it is safe to say that, since 2010, the hon. Member for Harrow East appears to have been in the vanguard of that charge.

To be absolutely clear, I could not be more emphatic in expressing that my colleagues and I on the SNP Benches believe that this UK Government have a moral obligation to provide full restitution to those people who were victims of this appalling scam. I say “scam” because that is clearly what it was—a scam that induced people to put their hard-earned life savings into a scheme that promised huge bonuses and pay-outs, neither of which could ever have been delivered. Teachers, nurses, shop workers, factory workers, engineers, small business owners—the list goes on, and each and every one of them was swindled by this dodgy deal.

Despite the fact that a lot of time has passed, there will of course be the cynics who say that when people invest, they have to face up to the risks, but these were not normal risks. This was not simply a case of the stock market ebbing and flowing; this was a scheme that could never have financed itself. It was a con—a scam—with real victims. The worst part is that the Treasury, the Government and, indeed, the regulator all appeared to know exactly what was going on. They knew, but they never put an immediate halt to it, and that is why there is a moral obligation on Government to provide the funds that people are due.

As Members are aware, and this has been mentioned across the House on numerous occasions today, the coalition did indeed put forward a £1.5 billion pot in 2010, but in reality, it does not even scratch the surface. We all know that about £4.1 billion was needed to fill the gap, and we all know that, as a result, some 895,000 policyholders have only got back about 22% of what they were owed. It is simply not good enough, particularly when we consider what the then Chancellor said in 2010:

“For 10 years the Equitable Life policyholders have fought for justice. For 10 years the last Government dithered, delayed and denied them that justice. It is time to right the wrong done to many thousands of people who did the right thing, saved for their future and tried not to depend on the state, and then were the innocent victims of a terrible failure of regulation.”—[Official Report, 20 October 2010; Vol. 516, c. 960.]

Well, make that 20 years of dithering, delay and denial.

Sadly, the intransigence on this issue from Government shows no sign of changing. Like others, I have written to them on many occasions, and the answer has been a flat no: “There is no money, and we consider the case closed”. In reality, that has meant that good, hard-working people never received the pension money they were due, and it means that many more, including many of my constituents, will never receive that to which they are entitled.

I have been fortunate enough to spend some time in this House opposite the Economic Secretary, and he seems to be one of the few of the Government’s Ministers who fall within the “reasonable” category. While I appreciate that he and his colleagues across the Treasury are under enormous pressure, I would simply say to him that where there is a will, there is a way. The dithering needs to end, the delaying needs to end and the denial needs to end. It is time to deliver what my constituents and so many others deserve.

I will bring my remarks to a conclusion, but, as I do so, my efforts and, indeed, those of all my SNP colleagues do not end here. We are proud to be members of the APPG and, working across this Chamber, we will not stop battling until those who are still without money gain the recompense they are due.

As we have heard today, it has been more than 20 years since the House of Lords ruling rendered the Equitable Life Assurance Society financially unviable, and it has been over a decade since the then Chancellor announced the Equitable Life payment scheme to compensate policyholders who had lost out as a result of the scandal at that company, yet even after so many years, thousands of Equitable Life policyholders do not feel they have been treated fairly.

The Equitable Members Action Group continues to campaign tirelessly on their behalf, and during this afternoon’s debate—I congratulate the hon. Member for Harrow East (Bob Blackman) on securing it—we have heard Members from all sides passionately setting out the injustice that so many policyholders feel. My hon. Friend the Member for South Shields (Mrs Lewell-Buck) powerfully set out the upsetting case of the 84-year-old pharmacist she represents as an example of how the scandal has affected people living in constituencies across the country. My hon. Friend the Member for Newport East (Jessica Morden) spoke of the human impact on her constituent, an 89-year-old living with dementia, whose life has been hit by this scandal, alongside nurses, teachers, shop workers and so many others over many years.

My hon. Friend the Member for Coventry North West (Taiwo Owatemi) emphasised how long the scandal has been going on, and spoke about the crucial importance of transparency, which I will return to. The importance of transparency was also underscored by my hon. Friend the Member for Liverpool, Riverside (Kim Johnson), who spoke about the costs of the scandal on the plans and dreams of those affected, and the ongoing impact of current cases such as London Capital & Finance. My hon. Friend the Member for Putney (Fleur Anderson) spoke about a 91-year-old in her constituency and others who invested in good faith but have gone for decades without a satisfactory conclusion.

It is crucial that we learn lessons from what happened at Equitable Life, including about the wider importance of having a well-regulated financial services sector, as the right hon. Member for Gainsborough (Sir Edward Leigh) said. In recent months, the cases we have seen at London Capital & Finance and Brewin Dolphin underline the importance of the Government’s doing more to ensure that people are well protected in the first place.

On Equitable Life itself, the issue at the heart of the disagreement over the past decade has been how the payments to the vast majority of its policyholders have been determined. As we know, that has generated intense disagreement with the Government over their approach, and as today’s motion makes clear, there is a further issue of transparency and trust. Many policyholders lack confidence that those payments have been calculated fairly.

In October 2020, my hon. Friend the Member for Oxford East (Anneliese Dodds), the shadow Chancellor, wrote to the Chancellor of the Exchequer, asking for the Treasury to set out clearly the basis on which it had calculated the payments that had been made to policyholders and to ask what assessment his officials had made of the overall accuracy of the scheme. In his reply, the Chancellor claimed that when the Equitable Life payment scheme was operational, it was fully transparent, and that its calculations methodology was published in full. He claimed that the Treasury had worked with the Equitable Members Action Group and others to produce a simplified explanation for policyholders.

Unfortunately for the Chancellor, the Equitable Members Action Group does not share his assessment. It contends that the Treasury refused full disclosure and hid behind commercial confidentiality. The group had to attempt to reverse-engineer the calculations, and it remains unsatisfied that payments can be shown to be accurate. It has presented cases of policyholders who received an amount substantially less than they were due. In one of the most extreme examples, which the hon. Member for Harrow East drew attention to, it quotes a case where the Treasury calculated a policyholder’s loss at £17, only for that to be revised to £8,661 when challenged. More widely, the group cites a freedom of information request that revealed that, where compensation had been recalculated following complaints, it resulted in an increased payment to the policyholder in every case—on average, by a factor of three.

A report of the Public Accounts Committee, under its former Chair, my right hon. Friend the Member for Barking (Dame Margaret Hodge), concluded:

“Policyholders have struggled to understand how their payments have been calculated and cannot, therefore, check that the amount that they receive is correct.”

In a letter to the Committee’s current Chair, my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), the permanent secretary to the Treasury restated the Government position. He said:

“no errors in the actual methodology have been found, including when the Equitable Members Action Group’s own actuary examined the methodology.”

Again, the group does not share the Treasury’s assessment. It contends that the actuary acting on its behalf was denied the information he needed to validate the methodology used, and he could not verify the calculations for one third of the sample policies studied.

It is the Government’s responsibility not only to do the right thing but to earn people’s trust that they will do so. It is clear from the continuing challenge presented by Members of Parliament on behalf of Equitable Life policyholders today that that is not yet the case. I find it hard to disagree with the Equitable Members Action Group’s view that the Treasury’s refusal to be fully transparent only increases suspicion that something is wrong.

After such a long-running disagreement, we believe that a transparent approach is the best way forward, and that it is the only way to find a way forward that is widely trusted and accepted. We therefore look forward to the response from the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee on this important call to establish a joint inquiry into the accuracy of payments made to victims of the Equitable Life scandal.

I thank the hon. Gentleman and apologise to him that the timer has been put on. Can the timer please be taken off by whoever is controlling it? It is very distracting and it was not fair to Mr Murray to have those numbers apparently telling him he had to stop when he did not have to stop. I am sorry for that, but these technical hitches sometimes just happen.

Let me start, as others have done, by acknowledging the role of my hon. Friend the Member for Harrow East (Bob Blackman), his long-standing work on the issue and his success in securing the debate. I also need to declare an interest, as I did when I responded to the debate on 31 January 2019: my late father was an investor in Equitable Life and, therefore, I am keenly aware of the history and the importance of the issue to all concerned.

As we have heard and grasped again today, this is a complex and technical subject, the history of which has been very well documented over many years. I should also remind Members that the Equitable Life payment scheme closed to new claims over five years ago, so nothing has changed since that previous debate two years ago. Many of the speeches made today have covered the long and sad history of this matter. I do not propose to revisit all of that this afternoon. I do, however, want to remind hon. Members that the Government took more action than any of their predecessors to resolve this issue and committed significantly more funding than any other.

I appreciate that some investors remain disappointed by the steps that we took and would like to see further funds made available, but the Government have been clear and consistent in saying that this issue is closed and no further money will be paid out. This is in line with the ombudsman’s report, which was explicit about having no expectation of the full amount being paid.

I will not, because of time. Indeed, the ombudsman wrote to the APPG to clarify that position. Today, we have heard additional representations on the transparency and accuracy of the payments made by the scheme. I heard very clearly that point from my right hon. Friend and his reference to me during the debate, and I shall respond to that now.

First, the Treasury published the calculation methodology in full in 2011, as well as a simplified explanation to assist members of the scheme who were anxious about how it would work, with worked examples of the calculation. These explain how every payment made by the scheme was calculated. In addition, the Treasury has also incurred actuarial fees well in excess of £100,000, answering the questions reasonably posed by the actuarial representative of the Equitable Members Action Group, in an effort to ensure that there was maximum transparency to that group and to those members who were concerned, but no errors were found in the methodology. The group confirmed to their members that the payments to annuitants were accurate, and all this was set out in detail to the Public Accounts Committee in 2018.

Some hon. Members have spoken about policyholders who have received increased payments from the scheme, but given the closure of the scheme to new claims, I can only assume that these are historical cases. The Treasury is not aware of any corrected payments having been made to policyholders since the scheme closed, but I recognise that it may be helpful to go into some more detail on this point. The most critical determinant of the value of any payment is the input data received from Equitable itself, including payments in, payments out and the type of policy bought. Actuaries checked this data carefully and made any obvious corrections automatically before payments were made. But then the scheme also gave policyholders the opportunity to verify their own input data, which would be a significant driver of any errors, and where an error was found, the scheme corrected it and recalculated the payment. That is likely to have been what happened in specific cases that Members have raised today, and I believe that they show that the system that the scheme established to ensure accurate payments worked well.

The Government have taken significant action to resolve this issue and to balance the expectations of the policyholder with the needs of the taxpayer. The scheme was fully transparent, as I have set out. We published the calculation methodology in full. We made significant resources available to explain it. And we put systems in place to ensure that where there were errors in that input data and, therefore, payments, they were remedied swiftly. I appreciate investors’ desire that the scheme should pay out more, but the Government’s position has always been clear and consistent, both since the original announcement back in 2010 and since the scheme was wound down over five years ago. I am afraid that that position remains and will not change.

With the leave of the House, I would like to thank the, I think, 25 Back-Bench Members from five different political parties who have contributed to this debate. In direct answer to my hon. Friend the Minister, let us be clear: £280 billion has been found to shore up the economy because of covid; less than 1% of which would provide full compensation to the victims who have been waiting more than 20 years for it. Equally, had Equitable Life been allowed to fail, the people who lost their money would have been entitled to 90% compensation under the industry scheme, but they were denied access to that scheme because Equitable Life was too big to fail.

The reality, as has been mentioned, is that the Treasury has hidden behind commercial confidentiality in terms of displaying and disclosing the information necessary for individuals to calculate the compensation they were due, even under the reduced scheme. In addition, the pre-1992 trapped annuitants, who are the most vulnerable victims, were never singled out by any report until the Government laid legislation in 2010.

I ask that the House passes the motion by acclamation and that we get on with the inquiries. I call on my right hon. and hon. Friends at the Treasury to do the right thing and ensure that full compensation is provided to the victims of this terrible scam.

I thank the hon. Gentleman. Although I am, of course, impartial in all matters that happen here in the Chamber, I am an enthusiastic member of his all-party parliamentary group and most grateful to him for all the work he does.

Question put and agreed to.


That this House expresses grave concern regarding the Government’s continued inaction with respect to the injustice suffered by Equitable Life policyholders, the vast majority of whom have only received partial compensation compared to the confirmed losses directly attributed to regulatory failures despite the Government’s acceptance of the Parliamentary Ombudsman’s findings to compensate victims in full in relation to the maladministration of Equitable Life; notes the concern previously expressed by the Public Accounts Committee on the transparency and accuracy of the payments being made to victims; further notes the Government’s failure to fulfil the Committee’s request to publish an intelligible and transparent explanation to policyholders on how to verify the correctness of the compensation they have received; notes examples of grossly inaccurate payments, adjusted only when identified by policyholders, gathered by the Equitable Members Action Group (EMAG); notes the Government’s continued insistence that there have been no mistakes in the methodology for calculating payments to policyholders; and therefore calls on the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee to establish a joint inquiry into the accuracy of the payments made to victims of the Equitable Life scandal.

I will now suspend the House for a few minutes, to enable the necessary arrangements to be made for the next business.

Sitting suspended.