EQUITABLE LIFE MEMBERS
“E 7” press release: 29th October, 2002
Last Updated: Tuesday, October 29, 2002 06:33 PM
7” press release: 29th October, 2002
Equitable Life’s policyholder groups accuse Treasury of cover-up and call for a comprehensive study by the Parliamentary Ombudsman with a view to Government compensation for a decade of regulatory failure.
Life policyholder groups are united in their demand for action on
Government compensation for serial regulatory failure. They accuse the
Treasury of orchestrating a cover-up, with delays and deliberate attempts
to “ring fence” the perceived regulatory problem to a brief period to
distract from its own extensive culpability for regulatory failure
new group of groups, calling itself E
7, is pleading for the new Parliamentary Ombudsman, Ann Abraham,
immediately to broaden to a comprehensive study the P.O.’s
current modest pilot investigation. As things stand, just one case relating to 1999/2000 is being
evaluated but E 7 wants the
P.O.’s office to commit now
to addressing the other 250 cases of claimed maladministration already
lodged by MPs, going back to 1994 and beyond.
E 7 group’s spokesman, Paul
has shown us how huge financial scandals can and should be addressed –
swiftly, independently and honestly. Equitable policyholders are fed up
with being fobbed off with a shabby establishment cover-up.”
Treasury has played Lord Nelson. Cynically,
a year ago the minister Ruth Kelly knocked the Equitable Life neatly into
the long grass by announcing the far from independent Penrose Inquiry,
with a totally toothless remit. It has since been used by the Treasury and
also, disgracefully, the Treasury Select Committee, as an excuse to do
nothing. It’s unlikely that MPs or policyholders will see any version of
Lord Penrose’s report before 2004.”
in an impressive display of unanimity, a dozen committee members from
seven independent Equitable Life action groups and 15 sympathetic MPs from
all parties assembled to meet the press outside The Commons. The demand for action now by
the P.O. is also being backed by the Consumers' Association, The Equitable
Life, Age Concern, NAPF and Arthritis Care.
of the E7 group, each holding
an alarm clock aloft, surrounded a cake with the words: “Parliamentary Ombudsman, please
HELP!”. It was an
anniversary reminder that both the P. O.’s office and Lord Penrose have
been working on reports for a year with no visible progress. It is nearly
two years since Equitable ignominiously closed to new business. In that
time the million policyholders who have suffered on-going uncertainty and
anguish have been stuffed with write-downs to their policies of more than
£3 billions - about one third of each policy’s value.
E 7 claims that this was not related to the stockmarket crash – but
down to over-distribution of bonuses that went endorsed and unchecked by
regulators throughout the 1990s whilst the Society continued pyramid
selling to unsuspecting policyholders.
Life is at the epicentre of the crisis of confidence in pensions.
There’s a very important principle at stake: we’re entitled to believe
that if there is regulatory failure, then it will be admitted and we will
be compensated – otherwise, our trust is gravely misplaced and
amount of fine words about the future from the breathtakingly expensive
FSA will overcome the fact that a million voters who thought they had made
prudent pension self-provision are convinced that regulation has failed
them. The Treasury is shirking its responsibility to own up and pay up.”
Braithwaite (EMAG) 020.7267.5938
Watson (Consumers’ Association)
federation of independent action groups, was represented by:
– Paul Braithwaite, ELMHG – Liz Kwantes, EPHAG – Bob Widdess, ELJAG
– Chris Harlow, Income Drawdowns – Geoff Glover, Annuitants –
Nicholas Oglethorpe and Internationals – Leslie Seymour.
year anniversary of the P.O.’s letter to MPs:
one year ago the Parliamentary Ombudsman, Sir Michael Buckley, wrote to
all MPs saying that he: “…..had
decided to await the outcome of the inquiry (Penrose) before considering
further whether I might usefully intervene”, whilst announcing a pilot
investigation of one representative complaint into maladministration by
the FSA during the narrow period covered by the Baird Report. One year on
and there’s no prospect in sight of even that modest report. A cause for
concern is that the P.O. himself has already departed and his deputy, Alan
Watson, will soon be retiring. It
is therefore timely for E 7 to
petition the new P.O, Ann Abraham, to plead for the immediate
commissioning of a full-blown study. Justice
delayed is justice denied.
the Parliamentary Ombudsman is credible as having both the true
independence to scrutinise regulatory failure and to propose redress –
which is explicitly not within Lord Penrose’s power. It is rumoured that
the Treasury has not been co-operating with the P. O.’s office. The Treasury refused MPs on the Treasury Select Committee
briefing papers and minutes from 1998, so how can MPs or policyholders be
confident that the Penrose Inquiry report, which is to Treasury ministers,
will not be similarly blue-pencilled? Barlow Clowes is a precedent: the
Treasury denied wrong-doing but was found by the P.O. to
be culpable and compensation was paid.
interim report of the Treasury Select Committee in March 2001 concluded,
prima facie, that serial regulatory failure had occurred dating back to
1994. That report was 20 months ago. Despite this, the Treasury has
been successful in confining the period of scrutiny to the 23 month period
up to December 2000. E
7 believes that the Treasury itself must be put under the spotlight.
Maladministration should be investigated back to 1994 (arguably earlier)
and forward to date.
the Equitable Life was closed to new business the Treasury called upon the
FSA to study its own supervision since the FSA’s inception in January
1999 – resulting in the highly critical Baird Report.
This swift move very neatly erected a fire-wall from the earlier,
largely unscrutinised, period of embarrassment to the Treasury when it had
itself direct regulatory responsibility pre 1999.