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Finance: Equitable Life

My Lords, I, too, thank the Minister for repeating the Statement. We on these Benches are pleased that the Government have accepted the principle, at least to a degree, of compensation from public funds for Equitable Life policyholders. However, I am afraid that that is far as I can go in keeping company with the Government in approving the approach they have adopted. On timings, why has it taken well over six months for the Government to do little more than accept a principle and appoint an adviser? Why could not this Statement have been made when Parliament resumed in October, or even before? When we briefly debated the issue a couple of months ago, the Minister replying at the time said that the Treasury had other priorities. But having read today’s announcement, it is clearly not the case that the entire Treasury—officials and Ministers—has been taken up in reaching such an incomplete conclusion. It is thus very difficult indeed to avoid the conclusion that the Government are stringing out the process to minimise the amount that they eventually have to pay out. However, given where we are, have the Government given Sir John any indication of how long he might take? Have they specified when they would like to receive updates? If, when he starts looking at all the documentation, he finds it is extremely difficult and gets bogged down in it, what pressure will the Government seek to apply to try to ensure that months and months of silence do not pass as poor Sir John tries to deal with this issue? What resources has he been given to help him? Does he have a support team, and who are they? As the noble Baroness asked, what do the Government mean by ““disproportionate impact””? Do they have a view on what proportion of Equitable Life policyholders might be included in that definition, and does that, by definition, mean that the bulk of policyholders who suffered equally will get nothing? The Government say that, alongside Sir John’s advice, they will take account of the position of the public finances. We hope that the advice will be forthcoming in a matter of months rather than years. But the Government know about the position of the public finances—they are shot through. Why can they not make a Statement at this point about what the phrase means? Does it mean, in effect, that if at the time the finances are as bad as we expect them to be—and as the Government expect them to be—they could simply disregard all Sir John’s advice completely? It is advice and the Government have given no indication of whether they will accept it in whole or in part. Why can the Government not set at least an indicative timetable for even initial payments? When the ombudsman originally reported, she said that the whole process should take two and a half years. The Government imply in their Statement that they do not want to follow the route she proposed because that would take too long. If that is the case, what view do they have about what would be an acceptable period? If they believe that we are talking about a matter of years rather than months before the whole process is completed, is there any reason why there cannot be an interim fast-track system of payments to start the process of meting out justice to those who have suffered—or are we going to find ourselves in the same situation as with the miners’ compensation scheme, where it takes decades to make payments and as a result, in many cases, justice is actually negated? When this issue was raised earlier in your Lordships’ House I contrasted the lack of speed of payment in this case with the speed of payment of depositors in Icelandic banks. The Minister chided me, saying that that was an unfair comparison. I disagree. The truth is that if a Government want to act quickly, they can. If they had wanted to act quickly—or at least significantly more quickly than this, in the case of Equitable Life—they could have done so. They could now have started making payments, as the ombudsman suggested and believed was perfectly possible. The Government’s failure to do so and the further delays that today’s announcement will set in train simply demonstrate an unacceptable lack of urgency in dealing with a problem created, albeit in part, by regulatory failure.