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Equitable Life

My hon. Friend is absolutely right, and I am grateful to him for that point. I shall say something in a moment about how many people I think are now within the scope of the ex gratia scheme, but I hope that he will allow me to take a short run-up to that. The starting point for the debate about scope is the fact that the ombudsman acknowledged—I think in her evidence to the Public Administration Committee—that the Government could have chosen not to make any payments at all. She also recognised that the Government have a responsibility to balance competing demands on the public, a point that was underlined by the court last week. That said, however, there is clearly a moral and ethical case for the Government to provide an ex gratia payment scheme from the public purse. The question then becomes, "What is the rational basis for the operation of that scheme?" Having considered that question carefully, we concluded that the right approach was to look at where we agreed with the ombudsman in thinking that injustice had arisen. We decided that that should be the foundation of the ex gratia scheme that we put in place. We lacked the information about Equitable Life policyholders needed to understand exactly who would be embraced by such a scheme. That is why we asked Sir John Chadwick for his advice on the fastest and fairest way forward. That approach was then challenged in judicial review proceedings by the Equitable Life members action group. The hearing took place in July, and the judgment was handed down last week. It is an important ruling. I think that it takes us one step closer to a swift resolution and the provision of support for those who are suffering. The court recognised that the Government’s basis for a payment scheme was lawful, and it accepted that the Government were entitled to seek Sir John Chadwick’s advice in establishing the scheme. We very much welcome that confirmation of the legal basis of our approach, but the hon. Member for Twickenham was right to go on to say that the court also concluded that in two areas we focused too narrowly on the question of regulatory compliance. Having considered that judgment very carefully, and because I am ambitious for a speedy resolution to the matter, we took the view that the scope of the ex gratia scheme should be widened. Therefore, we have asked Sir John Chadwick to consider injustice arising in the period from mid-1991. What will be of interest to many right hon. and hon. Members is that that decision ensures that a number of the policyholders who are often called "trapped annuitants" are now likely to fall within the scope of the ex gratia scheme. The fact that the scheme has been widened means that something like up to 1 million people could be covered.