---

Equitable Life

I think that is an accurate description of the Minister's position. [Mr. Roger Gale in the Chair] When the House resumed in January, we finally had a statement from the Chief Secretary to the Treasury, which was the culmination of eight years of waiting. We have had 13 reports on Equitable Life. In 2001, there were reports from the Corley Institute of Actuaries, the Treasury Committee and the Financial Services Authority. In 2003, there was the parliamentary ombudsman's first report. There was the Penrose report in 2004, Paul Myners's review of corporate governance of mutuals and Sir Derek Morris's review of the actuarial profession. In March 2007, we had the Faculty of Actuaries consideration of Ranson and Headdon. There was an FSA report on Penrose in July 2004, a Financial Ombudsman Service report in March 2005 and a report by EQUI, the European Parliament's Committee of inquiry into the matter, in June 2007. We also had the report in relation to the joint disciplinary scheme for the Institute of Chartered Accountants, which has not yet been published, and in July 2008 the parliamentary ombudsman's second report. Therefore, although we have had no shortage of reports on the issue, the Government have effectively announced yet another review and yet another report. They issued an apology, but it was partial, not an apology for the things for which an apology was needed. Uniquely, after an ombudsman's findings of maladministration and injustice, no compensation was offered. Ex gratia payments were made to a few people who were affected. We had this concept—again unique in response to an ombudsman's report—that the money was not to go to those who suffered the injustice or the maladministration, but to those whom the Government considered needful of support. That cannot be right. I have a series of questions to put to the Minister. Why is Sir John Chadwick's brief so restricted? Why has it been pared down to such a point that he cannot consider what many of us feel to be the crucial questions? Will that not ensure that the payments are minimal? Sir John Chadwick's review is designed to ensure that the minimum amount, not the right amount, is paid out as proper compensation. What has happened to the oft-quoted precedent that the Government cannot compensate everybody who finds themselves at a disadvantage, when they are prepared to compensate the depositors of Icesave without any culpability on the part of the regulator? No one is suggesting that the regulators were at fault in the circumstances of the Icelandic banks, yet the Government were prepared to make compensation. In this example, in which the ombudsman has clearly demonstrated that the regulators were at fault, the Government are trying every technique that they have in their armoury to avoid payment. What estimate has the Minister made of the proportion of with-profits annuitants who will receive ex gratia payments? Many feel that it will be a small proportion of those who should be compensated. Has she even made such an estimate? Are the Government walking into this with their eyes closed? Does the Minister believe—this is the crucial question with regard to the role of the ombudsman—that the payments will put individuals in the position they would have been in had maladministration not occurred? That is the whole point of the ombudsman system. It is not the role of the ombudsman to compensate for commercial losses; everybody accepts that. The question is, will everyone who has suffered an injustice and a loss—not just those who find themselves extremely hard up—be placed in the position they would have been in had the maladministration not occurred? The answer is transparently clear—they will not. Why have the Government conceded the findings of maladministration but not injustice? Why do the Government take this pick-and-choose approach to the ombudsman's report, which enables them to assess that the ombudsman is absolutely right when the findings are inconsequential, but absolutely wrong when the findings are damaging to the Government's reputation? If the Government take the view that they can pick and choose from the ombudsman's findings, what future is there for the ombudsman? I have asked that crucial question in a couple of debates on this subject. What is the point of having a parliamentary ombudsman—an Officer of the House, not of this Government—if the Government are found wanting and to have created maladministration and injustice, but then walk away from those findings and are prepared to ignore them? What is ““disproportionate effect””? How are we going to assess the consequences of this review if we do not know what factors Sir John Chadwick will be asked to take into account in assessing what ““disproportionate effect”” means? Is a person's losing half their life savings disproportionate? I would say it is, but I suspect that the terms of reference will mean that, unless someone is virtually destitute, they will not receive compensation and their loss will not be considered as having disproportionate effect. That is wrong.