EQUITABLE LIFE MEMBERS

Treasury Select Committee 30 Oct 2001

Last Updated: Tuesday, October 30, 2001 11:17 PM

With thanks to Paul Braithwaite

Along with Nicholas Oglethorpe, Margaret Felgate, Leslie Seymour, David Browning, and a dozen members of the press, I attended two and a half hours of TreasCom this morning.

Between the seemingly endless game of slick tennis (or pass the parcel?) there were some VERY promising signs:

The new chairman lost his rag with teflon-coated Sir Howard and said that he expected to be seeing a lot more of him if that was his view (that the regulatory regime was flawed).

Committee member Kali Mountford had the refreshing habit of actually repeatedly alluding to policyholders.

You may not know (I didn't) that the ill-defined concept of Policyholders' Reasonable Expectations (PRE) will be superceded at N2 (sounds like some crap new account from Barclays) on Dec 1st by a broader concept of "Fair Treatment".

Davies, I felt, WAY overstepped the FSA's prerogative when he did a sales pitch for the draft compromise that has been published. He said that its adoption, "will result in the fund in future being reasonably sound". But...there is NO proposal before us. And the FSA is bound, WHEN classes have been defined, only to opine whether what is proposed is NOT UNFAIR to all classes.

My view is that the Berlin Wall is cracking. Try as she did, Ruth Kelly could not rule out compensation. TreasCom really has the bit between its teeth. Penrose is his own man but I absolutely don't believe we'll hear from him in 2002 and committee member James Plankett expressed concern that we may not hear from Penrose in the life of this Parliament.

The best line came last when Sir Howard agreed that Martin Roberts WOULD be available to give evidence (having protected him Feb 16th). He on "the smoking gun" Dec 18th 1998 - and one man who has remained involved through the past several years. Unlike Davies, he's a manager not a conjurer.

But to my headline:

The ambitious young Ruth Kelly defended the indefensible.

She regretted that Baird had not looked outside the Jan 99 to Dec 2000 period, though those dates had been chosen with enormous care by her predessors.

She suggested that ELAS, Herbert Smith and/or policyholders could sue the regulator - whilst knowing in practical terms that that is almost inconceivable (and VT has expressed that view to me Sept 18th).

The Treasury has behaved in a deeply, deeply cynical fashion for years not months and Kelly tried to hold the line.

She was enthusiastic but not convincing. She had the gall to claim that announcing Penrose in August was in response to concern for policyholders when it was actually an attempt to bat a hot potato into deep field.

To give it a bland remit of "learn lessons for the industry" was offensive when a million of us were suffering losses and anxiety and she chose not to intervene on our behalf. On August 30th VT trumpeted with seeming relish that "there will be no compensation. There will be no lifeboat." Singing from the same song sheet, or what?

She called for a murder inquiry whilst the crime was still being commited!