Equitable Life - Now offer justice to Investors - MP (July 17th 2008)
It is time to recognise that investors in Equitable Life, the company that came close to bankruptcy in 2000, have been treated shoddily by successive Governments and by the regulator and that they deserve compensation for their losses, says North Thanet's MP, Roger Gale.
Speaking at Westminster this morning following the publication of the Ombudsman's damning report following her investigation into the debacle Roger Gale said:
"Ann Abrahams` scathing finding of "serial regulatory failure" must lead to some payment to those many of our constituents who have lost a significant part of their life's savings and whose retirements have suffered as a result. At the time of the collapse I received harrowing letters from those whose dreams of a comfortable old age following a lifetime of hard work were shattered as a result of the mis-management of the company and the failure of the Financial services Authority, the "watchdog" to identify the problem and to take swift and appropriate action.
The question is asked "why should the taxpayer bail out investors in a private company". The answer has to be that those investors paid, through a premium, for the services of the official regulator and that regulator let them down. That is a responsibility of Government.
At the time and in opposition we said that Government should assist those who had suffered losses but at the time the economy bequeathed to a new Labour government was in rather better shape than it is today. Nevertheless, the Ombudsman has made independent recommendations and they should be honoured.
First, the recommendation that the public bodies apologise to policyholders for the justifiable sense of outrage they have caused" must be implemented immediately.
Second, the recommendation that "the Government should establish a compensation scheme. The aim of the scheme should be to put people who have suffered relative loss back into the position that they would have been in had the maladministration not occurred" should be set in train. Clearly such a scheme will take time to set up and implement but if the Government moves swiftly then monies due should be payable before the end of the lifetime of this government. It will never be possible to compensate for the misery and distress caused by this sorry chapter of financial failure but hard cash will go some way towards making amendsĒ.