I recently received the below letter from Sajid Javid, the Minister with responsibility for Equitable Life, which I thought may be of interest to constituents.
Archive for the ‘Equitable Life’ Category
The All Party Parliamentary Group on Equitable Life met on 25 April at which I had a representative. Following the meeting I have written to Mark Hoban, the Minister with responsibility for Equitable Life, in order to pass on concerns that were raised at the meeting. Once I receive a reply I will post a copy on this blog.
I went this afternoon to a meeting of the All Party Parliamentary group to support Equitable Life policyholders. It was a packed meeting. In fact, I feared at the start that it would be a bit of a scrum. The organisers had booked one of the large committee rooms for the meeting but had been displaced at the last minute into a much smaller room because priority was given to one of the official House of Commons committees that needed to sit today. Not only was every seat is taken but pretty well every square foot of standing space was occupied as well.
In the event, it proved to be a sober and serious session. Liam Byrne, who as Chief Secretary to the Treasury is the government minister responsible for handling the Equitable Life compensation, and Sir John Chadwick, the retired judge whom the government has commissioned to design a payments scheme, spoke briefly and then answered questions for about half an hour.
I think that every MP there wanted to impress upon the Minister and Sir John the impatience bordering on despair felt by many policyholders who had been responsible and made regular payments from their salaries into their pension schemes only to see their efforts set at naught by the collapse of Equitable Life. For a long time, the government tried to deny that maladministration by state agencies or regulators was in any way responsible for the debacle at Equitable Life but eventually trenchant reports from the Ombudsman forced ministers to concede that regulatory failures had occurred.
I am afraid that we still do not know how long it will be before policyholders know how much compensation they will get or when that compensation will start to be paid. However, we did this afternoon discover some cause for hope that we may finally be moving towards the end of this saga.
Sir John Chadwick said that she intends to publish his third interim report within a few days and that he will present his final report and recommendations to the government by May. Mr Byrne said that he was aiming to produce the government’s response to Sir John’s recommendations within a fortnight of receiving that final report. (I suspect that the normal rule that no major political announcements may be made by the government of the day during a general election campaign means that we risk that timetable is slipping by a few weeks).
Sir John made it clear that he did not see it as his job to recommend a particular sum of money to be paid in compensation. Rather, he saw it as his task to recommend how losses attributable to maladministration should be calculated and to design a scheme to enable payments to be made on that basis. His intention was that the scheme would cover all with-profits annuitants. He did not say whether he was likely to recommend cash payments or payments in the form of alternative financial products.
Liam Byrne said that the government could not give a blank cheque and would, after receiving Sir John Chadwick’s report, set a maximum sum of money as the pot from which compensation payments should be made in accordance with whatever formula derived from the final Chadwick report. When pressed about how long a period of time would elapse between the government announced see its response to the final Chadwick report and payments actually starting to be made, he said that that would depend to some extent upon the nature of the compensation which Sir John recommended. If compensation would be paid in cash, it should be a fairly quick and straightforward task to identify an agency like the Department for work and pensions to make those payments. However, if compensation were to be paid in the form of alternative financial products then it might take somewhat longer to identify a delivery partner and establish the systems for compensation to be paid.
Mr Byrne said that he had rejected the idea of making interim payments. In his view, the problem was that interim payments would inevitably reduce the amount of money available at the end of the process for all the other policyholders. More encouragingly, he also said that he thought that to means test payments would be both wrong and impracticable. This decision in particular was very much welcomed by the MPs present and I think will be welcomed by Equitable policyholders.
Both Sir John Chadwick and the Minister thought that it was probable that the final compensation scheme would include payments to the estates of policyholders who had died.
Like other MPs who represent a fair number of Equitable Life policyholders, I shall continue to lobby ministers (of whichever party forms the government) to get a decent compensation system put in place as soon as possible. Equitable Life policyholders, many of them now very elderly and frail, have already waited for far too long.
On 1st December David led a House of Commons adjournment debate about the effective of recent job losses at Lloyds Group in Aylesbury Vale. The Minister attending the debate was Ian Lucas MP who is The Parliamentary Under-Secretary of State for Business, Innovation and Skills.
The Minister has assured David that he will write to him addressing the proposals to help encourage local economic growth that were raised by David at the debate. This will of course be posted on the website once it has been received.
Below is a short extract from last night’s debate. If you would like to view the debate in full please follow the link to the Hansard here.
Mr. David Lidington (Aylesbury) (Con):
I am grateful for the opportunity to bring before the House the impact on Aylesbury vale of job losses recently announced by the Lloyds Group.
The Lloyds Group is by far the biggest private sector employer in my constituency or in the wider Aylesbury vale district, which includes the parliamentary constituency of Mr. Speaker in Buckingham. Last week, Lloyds announced major job losses in Aylesbury. To some extent, this news was not surprising. Ever since Halifax-Bank of Scotland-HBOS-was hit by the credit crisis and forced to merge with Lloyds TSB, staff at the company, along with local business and political leaders, have had to live with uncertainty. It was always clear that that merger would lead to a review at some time of office locations and, on top of that, the impact of what is now the deepest and longest-lasting recession since the second world war has clearly reinforced the pressure on Lloyds to cut costs dramatically.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas):
First, I congratulate the hon. Member for Aylesbury (Mr. Lidington) on securing this debate on an important subject and on the way in which he has acted as a persuasive advocate on behalf of his community. Many of us in Parliament have of course experienced job losses in our communities during the past 18 months to two years, and they are always profoundly to be regretted. They have a profound effect on people’s lives, and each individual is severely affected. He put across very strongly how his community has been affected, and I thank him both for the tone in which he approached the matter and the constructive way in which he made proposals to help his constituency at this difficult time. I sympathise profoundly with his constituents, and I want to do all I can to assist. I shall certainly examine his proposals closely.
Another post on this topic will follow shortly.
To view the Bucks Herald’s report on the debate click here.
Commenting on today’s announcements from Equitable Life and Lloyds Group, Aylesbury MP David Lidington said:
“This is devastating news for employees and their families and for the town’s economy.
“I have talked to senior executives at both Equitable and Lloyds. They have assured me that they will do all that they can to advise and support staff. I shall expect them to live up to those promises and, for my own part, stand ready to help constituents who now face losing their jobs in any way I can.
“I have also talked to the District and County Councils and to SEEDA about the need for an urgent plan of action to attract new employers to Aylesbury.
“The government has designated Aylesbury as a growth area. It makes no sense at all to build thousands of new homes unless you plan for new jobs at the same time. I shall be pressing Ministers to make sure that government departments and agencies now do their utmost to deliver the jobs that Aylesbury needs.”
View the full story on the Bucks Herald’s website by clicking here.