The independent action group for current and ex Equitable Life policyholders, funded by contributions.

Equitable Members Action Group

Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK

Correspondence: 15/01/2009 - EMAG to MPs demanding Commons debate on the Statement and the PASC Report

EMAG to MPs demanding Commons debate on the Statement and the PASC Report

Dear  XXXXX YYYYYYYY MP _________, 15th January 2009

Government statement on Equitable Life – inadequate and unacceptable

The Government today announced a completely unacceptable response to the Parliamentary Ombudsman’s report and recommendations on Equitable Life.  It has rejected the Ombudsman’s recommendation for an independent tribunal, substituting one retired Judge to act alone on devising an ex-gratia proposed scheme for those ‘most disproportionately affected’ – but what does that MEAN?  This is a dereliction of duty and a disaster for hundreds of thousands of people who have suffered loss. 

The Parliamentary Ombudsman said that the Government should establish and fund a compensation scheme, which should be independent, transparent and simple.  She said this was her central recommendation.  The report said:

“The aim of such a scheme should be to put those people who have suffered a relative loss back into the position that they would have been in had maladministration not occurred.”

The Public Administration Select Committee (PASC) unanimously agreed with her recommendations.

An ex-gratia payment scheme is NOT compensation.  Ex-gratia payments only for those “who have suffered a disproportionate impact” (i.e. means tested) is totally unacceptable to those who lost out and, following the PO’s report had reason to expect compensation for the injustices found.  Although the Government has finally admitted and apologised for the maladministration, it is refusing to put matters right and is, once again, parking the issue. 

The PASC said in its report:

“Where regulators have been shown to fail so thoroughly, compensation should be a duty, not a matter of choice.”

The Treasury’s own guidance, Managing Public Money, published in October 2007, says that:

“Where financial remedies are identified as the right approach to service failure, they should be fair, reasonable and proportionate to the damage suffered by those complaining.”

It also says that:

“When a public sector organisation recognises that it needs a scheme for a set of similar or connected claims after maladministration or service failure, it should ensure that the arrangements chosen deal with all potential claimants equitably. It is important that such schemes take into account the Ombudsman’s Principles of Good Administration.”

The Treasury is failing to follow its own guidelines, and those of the Ombudsman which it endorses.

The Government has a duty to ensure that ALL policyholders affected, regardless of their current circumstances, obtain redress for the failures that the Ombudsman identified.  Compensation must also be determined independently, not behind closed doors by the Treasury that has been found to have been responsible for five of the findings of maladministration.   This is just more of the same: obfuscation, delay and damage limitation.  We reject compensation lite.

We urge you to call for a full parliamentary debate on both today’s statement and the PASC report.  The Government’s statement has fallen far short of policyholders’ hopes and expectations, based on the PO and PASC, and our members will feel profoundly let down.

With kind regards,

Paul Braithwaite
General Secretary