New Forest East

TREASURY – EQUITABLE LIFE - 14 September 2010

TREASURY – EQUITABLE LIFE - 14 September 2010

Dr Julian Lewis: As one of the many people who signed the Equitable Life representatives' pledge before the election, I am very concerned that there should be a fair settlement. Will the Minister comment on the statement by the parliamentary ombudsman in her letter to all MPs of 26 July that

"the Chadwick proposals seem to me to be an unsafe and unsound basis on which to proceed"?

[The Financial Secretary to the Treasury (Mr Mark Hoban): My hon. Friend was one of a number of colleagues on both sides of the House, including me, who signed the pledge. I am determined to make sure that we honour the pledge and that justice is delivered to Equitable Life policyholders. I met the ombudsman yesterday to discuss her letter and her comments on Sir John's report. That is one of a number of representations that I have received about the report. I shall talk about the others in more detail later, but let me say that the starting point of Sir John's work is a basis for calculating external relative loss. That is the first such basis that has been proposed to us and we need to look at how it could work as a basis for calculating the losses. I am determined to make sure that in deciding the loss figure we should take into account all the representations that have been received, including those of the parliamentary ombudsman.

Several hon. Members rose –

Mr Hoban: I sense that my hon. Friend wants to intervene again.]

Dr Lewis: My hon. Friend is extremely generous in giving way a second time. Does he accept that whatever calculations are done, any outcome that results in only a fraction of the relative loss being made good to the policyholders would be deemed unacceptable by the policyholders, and dishonourable behaviour by those of us who signed that pledge in good faith?

[Mr Hoban: I draw my hon. Friend's attention to the ombudsman's report. She set out a process for assessing a relative loss, but she was very clear in her report that we need to take into account the impact on the public purse of any compensation scheme.]