Updated 18th June 2015
EMAG exists to campaign for full government compensation. Will members of EMAG please note that because of pressure of work we regret it is not possible to answer individual written enquiries.
The “Justice for Equitable Life Policyholders” APPG group was formally re-established at a meeting held in Committee Room 12 of the Palace of Westminster on 17 June at 4.30pm. The previous joint-chairs of the APPG - Bob Blackman MP (Tory) and Fabian Hamilton MP (Labour) - were duly re-elected.
Latest important press article
“What I learned from investing in Equitable Life
My name is Louise and I'm an Equitable Life pension holder. In April 2000 I began putting £1,000 a month into an Equitable Life plan. Back in the 1990s, Equitable's fund managers had a reputation for delivering great returns. But in July 2000 the House of Lords ruled that the society had to pay guaranteed annuity rates to policyholders: this was deemed a blow, but not sufficient to threaten solvency. In fact it was expected that Equitable might be demutualised, and savers would get 'free' shares. For this reason I invested £1,000 in the 'with-profits' fund - for the free shares - and the rest in unit-linked. Fifteen years later I have finally got around to looking into this decision, and there are lessons to be learnt.
We now know that the House of Lords ruling was the final nail in the coffin for Equitable. Paul Braithwaite of EMAG, which campaigns for compensation for Equitable members, says the society was in crisis beforehand: 'Equitable Life was technically insolvent... from about 1991. But it was kept hidden by regulators and management.'...
In June 2002, chairman Vanni Treves wrote: 'We are now in a more stable position. The society is solvent.'
'Baloney,' says Paul Braithwaite. If the society was in such great shape, how come with-profits policyholders lost around £4.5 billion? And why did the government compensate them unless there was significant regulatory and management maladministration?
But compensation has only been partial. On average, with-profits policyholders have received 23 per cent of what they lost. And that was only in 2012, and only thanks to the change in government in 2010...
But the last lesson goes to Paul Braithwaite, who has fought all these years for compensation for almost a million Equitable Life policy-holders facing pensioner poverty through no fault of their own: 'This is a tale of the establishment covering its own arse... No blame has ever been allocated and full compensation has not been paid. It's a damming indictment of the industry and he devious ways of the Treasury who for 15 years have perpetuated smokescreen to conceal their own guilt.'
Paul Braithwaite fights on...”
What next for EMAG?
After the general election policyholders will probably be wondering where EMAG's campaign goes from here. After pause for thought and due consideration the board's answer is “ONWARD!”
While it would have been good if the political parties had promised us £3 billion, that didn't happen and we will need to do more to convince the MPs who make up the new parliament. The EMAG board met on 18 May and decided to retrench and persist in our campaigning. EMAG's current goal is to ensure that the Government and the Treasury realise we are still alive and kicking and that we will not go away until we win.
Re-forming the APPG
With the previous APPG joint chairs, on 17 June we'll be re-forming the All Party Parliamentary Group (APPG). Bob Blackman and Fabian Hamilton have both agreed to stand again as the joint chairs and we have approached the SNP to provide a secretary for the group. There were 80,000 with-profits policyholders in Scotland.
The new Treasury minister
The Economic Secretary to the Treasury, Andrea Leadsom MP, has been moved on and replaced by Harriet Baldwin MP. Harriet, in her West Worcestershire constituency, is well versed in the Equitable victims' plight. Earlier this year she met a delegation of policyholders and she was previously a member of the APPG. EMAG wrote to her requesting an early meeting on 5 June which you can read here.
Ros Altmann and Harriet Baldwin
The appointment of Dr Ros Altmann as the new Pensions Minister is welcomed news. For many years she fought a parallel battle on behalf of Pensions Action Group (PAG). With them, she retained the same solicitors and silk as EMAG, with similar success. As such, she is fully aware of Equitable. She has proved to be a tireless long-term pensions campaigner and she was instrumental in setting up the new free pension advisory service. We hope we will come to regard her as an ally and advocate on our behalf.
That she has written a joint article with the new Economic Secretary in the Daily Mail is promising:
“No excuses allowed from insurers failing to offer pension freedoms... To help you make decisions, the Government has set up Pension Wise, which offers free, impartial guidance on your options and will help you to understand the tax that you might pay, what charges to look out for and other important information...”
After a decade at the coalface EMAG director John Newman has stepped down from the board. John was chairman for four years and in 2006 fought to alert the High Court to the flaws in the deal to transfer WPAs to the Prudential. The board, at its meeting on 18 May, passed a heartfelt vote of gratitude for his work.
Commons debate on Equitable compensation
On 26 February the Backbench Business Committee dedicated one of its privileged debates to Equitable Life, and the Motion demanded that there be a commitment in the next Parliament to pay out the compensation in full, as the economy recovers. 37 MPs spoke and only the Minister responsible, Andrea Leadsom MP, maintained the government's position. At the end of the debate there was a unanimous vote to adopt the motion, which read:
“That this House congratulates the Government on providing a scheme to compensate victims of the Equitable Life scandal; welcomes the Government's acceptance of the Parliamentary Ombudsman's findings in full; notes that the Parliamentary Ombudsman recommended that policyholders should be put back in the position they would have been had maladministration not occurred; further notes that most victims have only received partial compensation compared to the confirmed losses; and calls on the Government to make a commitment to provide full compensation during the lifetime of the next Parliament as the economy and public finances continue to recover.”
You can watch the debate (start at 12.53) here.
You can download a digest of the press coverage so far here.
All in all, a triumph! And great credit to the three-man APPG Executive officers, all of whom spoke well in our favour.
The Treasury's dissembling
On 12 February EMAG wrote to all 217 MPs on the APPG to provide them with a detailed explanation as to why they should not trust the Treasury's replies to Equitable Life questions. It may be an eye-opener for you too!