Ten-minute rule motions offer MPs an opportunity to seek permission to introduce a Bill to Parliament. While Bills introduced this way go to the end of the long queue of Private Members’ Bills and so don’t make progress, they are in important way for Members to raise issues of concern in the House.
I recently had the opportunity to propose such a Bill. I chose a subject on which I have long campaigned – compensation for the victims of the Equitable Life scandal, who lost pension savings because of government and regulatory maladministration.
The campaign for justice on this issue has always had cross-party support, and I was extremely pleased that colleagues from six political parties co-sponsored my proposed Bill.
The Equitable Life scandal is a sorry saga spanning over 25 years. The Equitable Life Assurance Society was considered the gold standard of pension companies. Founded in 1762 as a mutual, it was widely respected and considered a safe place to out your hard-earned pension savings.
It turned out that during the 1990s it was, in fact, effectively being run as Ponzi scheme. Returns and bonuses were being funded by contributions from new members.
The house of cards eventually collapsed in 2000 following a House of Lords court case, which led to the inescapable conclusion that the Society didn’t have enough money to cover its commitments.
The question inevitably arose as to how this could have happened. While several inquiries were set up with varying and limited remits, it wasn’t until a four-year investigation by the Parliamentary Ombudsman that we discovered the truth – there had been a decade of serial maladministration by government departments and their regulators, whose job it was to oversee the Society.
The Ombudsman found that the prudential regulation of the society comprehensively failed, resulting in “the true financial position of the Society being concealed and misrepresented.”
As a result, the Society was able to continue to take people’s money, while savers had no idea of the house of sand into which they were placing and entrusting their hard-earned money.
The Ombudsman made five findings of injustice and called on the Government to provide full redress by putting people “back into the position that they would have been in had maladministration not occurred.”
In 2010 the then Chancellor accepted all the Ombudsman’s findings and apologised to the over one million people affected. The Government accepted their losses amounted to £4.1 billion. Despite this only £1.5 billion of compensation was made available for redress.
Where the State accepts responsibility for a failure – and how much someone has lost because of it – I believe it should provide full redress. But my Bill is not about the £2.6 billion of compensation still owed to the victims of maladministration. It is about the £1.5 billion already allocated.
From public information, parliamentary questions and freedom of information requests, it appears around £180m of that allocated funding is set to be kept by the Treasury and not reach the people to whom it is owed.
My Bill would require the Treasury to pay the full value of the £1.5 billion allocated for compensation to those who lost money because of the maladministration.
In doing so it would prioritise around 10,000 of the most elderly and vulnerable victims who were excluded from compensation simply because they bought an annuity prior to a government-imposed cut-off date. They suffered the same consequences as others in reduced pension payments because of the failed regulation. Those still alive will be in their 80s and 90s. They should be treated the same as other annuitants.
The victims of this scandal find it difficult to understand why they have not had full redress when the State has accepted responsibility the failure that led to their losses – which have also been calculated and accepted by the State.
But in the absence of full redress, it must be right that all the money allocated for compensation reaches those affected. In doing so, it must also surely be right to prioritise the most elderly and vulnerable.
That is what my Bill would ensure. While it may not progress during this Session, I and my fellow MPs from across the House who support it hope the Government will listen and act to do the right thing.
25 years after the Equitable Life scandal, thousands of its victims still await compensation
