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Equitable Life

This may be the last opportunity that I have to speak in this Parliament and it is an honour to follow so many thoughtful contributions today. I particularly want to put on record that, soon after I became a Member of Parliament in May 2005, one of the first groups to make representations to me was those of my constituents who had already taken up this matter with my predecessor—I think particularly of Mr. Roy England, Professor Bonn and others. Five years on, I want to do what a Member of Parliament should do, which is make representations on their behalf in the House tonight. The joint chairmen of the all-party group made thoughtful speeches. The hon. Member for Leeds, North-East (Mr. Hamilton), who is not in his place, was absolutely right that the main focus of this debate should be the plight of those who still require justice and compensation, but he was wrong so easily to dismiss the point made by my hon. Friend the Member for Fareham (Mr. Hoban) that, by their inaction, the Government have undermined confidence in the savings system, as my hon. Friend the Member for Cities of London and Westminster (Mr. Field) also said. Thirteen short years ago, we had a state pension system that was working, which could be topped up by occupational pensions, excellent personal pension schemes and a savings culture that had been encouraged by personal equity plans, and the majority had certainty about their retirement age. Equity markets were starting to boom and the economic recovery had been in place in for three years. People had some certainty and were able to plan. The environment now is very different. Retirement plans are not living up to optimistic forecasts. The public and private sectors have abandoned final salary schemes, and we are moving to defined-contribution schemes, the returns from which are infinitely less certain, with higher charges and increasingly expensive annuity propositions. As my hon. and learned Friend the Member for Harborough (Mr. Garnier) said, the Government's initial actions to alter advance corporation tax and the dividend tax credit have also played their part. The Government have failed on any number of occasions to take the opportunity to sort out this injustice and so have engendered a lack of confidence in the system. "By your actions shall you be known" is a well known phrase, and the Government will be known by their actions in this place, even their response to the Penrose inquiry. Penrose did say that the company is the author of its own misfortunes, but pointed out that there was a general failure of regulators and the Government Actuary's Department. It was seriously disingenuous of the Government at that time to try to hide behind that first remark, yet not acknowledge the mistrust and opprobrium that Penrose attached to the Government actuaries and the regulatory process. It was also seriously disingenuous of the Government at that stage to say that Penrose had not recommended compensation, because that was specifically excluded from inquiry's remit. Understandably, therefore, one or two colleagues tonight have commented with some cynicism on the contribution of the Chief Secretary, who was unable to give any details of the payment scheme. Yet I note that the Government, in their amendment to the motion, appear to be moving slightly from their initial position that they would react within two weeks to the Chadwick report. Now they say that they will""respond with details of a payment scheme within two weeks of receiving this advice"." If they could respond within two weeks, surely they must already know some of the dates. They must know now when they would start paying out. Either this is a failure of the wording of the amendment, or the Government have changed their position; if so, the Chief Secretary should be able to give us that information now. The comments made in the House last year by the then Chief Secretary were extraordinarily crushing. It is understandable that my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) should have made the point about the frustration felt when the Chief Secretary said that there has been maladministration in several areas. It had been pointed out by Penrose eight years before that there was a general failure of the regulatory system, and the ombudsman's report made that point as well. My hon. Friend the Member for Banbury (Tony Baldry) referred to the hardest hit, but surely all the policyholders have been hard hit. There has been speculation that, in today's money, the pension might be £75 a week, but there is an opportunity cost lost, because a number of people were locked into the scheme in 2000 when they were told that penalty fees would be charged for withdrawal. For the Chadwick process not to look at losses incurred after 2001, when it was already known that a penalty charge would be incurred if the money was withdrawn, seems disingenuous of the Government. A number of hon. Members question whether Chadwick is a transparent and independent process. To limit compensation on those grounds seems spurious. That the scheme was already falling apart had to be known. The whole issue of penalty payments has to be taken into account. The Government conceded the case for compensation some time ago. They conceded that it was not an ex gratia payment, but a payment for wrongs done—a payment for justice. By continually putting off the payment and not being able to tell us any details in this House tonight, even though their amendment says that they will produce them within two weeks, the Government are, at the very best, being disingenuous, so it is no surprise that there is considerable cynicism about their good intent on this matter. I hope that when the Exchequer Secretary responds, she is able to restore our confidence in that good intent by giving us details of the payment scheme; telling us why the Prime Minister said in 2008 that there would be a statement before Christmas, when it came only in January 2009; and telling us in detail that the Chadwick process is independent and transparent. If she cannot do those things, there will be real concern not only from Members, but from the people whom we seek to represent tonight—the people who require that compensation for the injustice done to them—about whether this Government really do intend to publish those details.