Equitable: Pay up, demand MPs
SIXTY Conservative MPs are urging the Government to provide ‘full’ compensation for nearly 900,000 investors still left out of pocket as a result of the near meltdown of Equitable Life in 2000.
In a strongly worded letter to Chancellor Philip Hammond, Bob Blackman, Tory MP for Harrow East, says it is ‘time the Government drew a line, by finally settling the long-running injustice of this scandal’. He goes on to say that a ‘debt of honour’ is owed to victims of the Equitable scandal.
The letter is endorsed by Tory MPs on the all-party parliamentary group Justice for Equitable Life Policyholders of which Blackman is co-chair.
Equitable, a mutual insurer, was popular with investors in the 1980s and 1990s because of its refusal to pay commission to advisers, instead selling through its own salesforce.
It advertised heavily on TV to promote the fact that every penny from customers was invested – in pensions or with-profits policies. ‘It’s an Equitable Life, Henry,’ trilled the adverts Yet, a mix of disastrous management, overpromising to some investors, a lost court case and lax regulation combined to blow a hole in its finances. In 2000, it was shut to new business and only saved by new management taking a sword to the value of customers’ policies.
Although previous governments have paid compensation of some £1.3 billion for maladministration in the regulation of Equitable, it falls far short of the £4.3 billion of losses quantified by the Parliamentary Ombudsman in 2008.
Blackman now wants the balance paid and says it could happen without threatening ‘the Government’s positive record of fiscal responsibility’.
Paul Braithwaite, secretary of Equitable Members’ Action Group, says Blackman’s letter shows the ‘strength of feeling’ that remains in Parliament over the need for full compensation to be paid to victims.