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Equitable Life

I am disappointed by the tone of the hon. Gentleman's response. The Government recognise that serious events occurred at Equitable. As the Penrose report set out, those were principally the responsibility of the society, however, we recognise that maladministration took place. Today, I have apologised to the House and to policyholders on behalf of successive Governments and the public bodies that were involved. I would hope that the hon. Gentleman's party will join in that apology on behalf of the previous Conservative Governments, who were, of course, also responsible for the regulatory bodies in a way that affected Equitable Life and policyholders over that period. The hon. Gentleman also quoted from the Penrose report, which said that events might not have unfolded in the way that they did had there been in place an appropriate regulatory structure. The Penrose report indeed pointed to a series of faults with the previous regulatory regime, which stretched back to the previous insurance Act and the regulatory framework that had been put in place and supported by the previous Conservative Government over very many years. I did not seek to make that a political point in my statement and my response to the House. However, as the hon. Gentleman raised the matter, I must point out that it was this Government who introduced substantial reform of the regulatory process, which took account of many of the failings by Equitable Life and was based on the Penrose report. Indeed, that report welcomed many of the reforms that were under way as a sensible response to the failings of the regulatory regime as it affected Equitable Life—[Interruption.] ... The hon. Gentleman asked a series of questions, and I shall try to deal with them. He asked when we expected Sir John to report. We would like him to report continually on an interim basis, because we need to engage in practical work to deliver a payment scheme alongside his work. We should not simply wait for the judge to come up with final conclusions, but work alongside his assessments, so we have asked him to update us continually on his work and conclusions. On the question of why we have not pursued the overall principle of compensation as set out by both the ombudsman and—as the hon. Gentleman rightly said—the Select Committee, I set that out in my statement. It is important that financial regulation does not come with a taxpayer guarantee. It is important for the future interests of the taxpayer and the relationship between the Government and the financial markets that if a company gets into trouble or takes dodgy action and the regulator fails to prevent that, compensation by the taxpayer is not automatic. I think the hon. Gentleman would agree that that would fundamentally change the relationship between the regulator and the financial markets, and between the Government and the financial markets. We recognise, however, the points that many hon. Members have made about the difficult circumstances facing their constituents as a result of the events at Equitable Life. That is why it is right to set up the ex gratia payment scheme. That is the right approach, and I hope that hon. Members recognise that although the process is not simple, we are trying to be fair to both policyholders and the taxpayer, and to take the matter forward as fairly as possible.