This is the letter from the Economic Secretary to the Treasury - see my earlier comment on the Government's proposals.
16th January 2008
GOVERNMENT RESPONSE TO OMBUDSMAN’S REPORT ON EQUITABLE LIFE
I am writing to let you know about the action we announced yesterday to help
Equitable Life policyholders who have been disproportionately affected by
events at the Society.
I know you will have policyholders among your constituents and I would like to
repeat for their benefit the apology the Government has made for the
maladministration that we believe took place during the period prior to
The Government has announced that it intends to set up a scheme to make
payments to those who have been hardest hit. The Ombudsman did say that
she was "very far from concluding that everyone who has complained to me
about the prudential regulation of the Society has suffered a financial loss."
Nevertheless, it is clear that people have been affected and have experienced
significant distress due to the events at Equitable Life.
To do this in a fair way, the Government needs to take account of the role and
responsibility of Equitable Life itself and others parties, fairness to taxpayers
generally and the need to ensure that the payments scheme can be
implemented as quickly as possible. We also need access to detailed
policyholder information to understand the relative losses experienced by
different groups of policyholders and the factors affecting those losses.
The Government has asked Equitable Life to make this policyholder data
available and has also asked the Rt Hon Sir John Chadwick, a former Lord
Justice of the Court of Appeal, to look at the information.
Sir John Chadwick has been asked to advise us on the impact suffered by
Equitable Life policyholders and the factors that the Government might take
into account when introducing a fair payment scheme for policyholders who
have suffered a disproportionate impact.
We share the desire to put a payments scheme in place as quickly as
possible and so will seek to progress consideration of the practical issues
associated with the delivery of a payment scheme in parallel with Sir John’s
A copy of the statement to Parliament and the accompanying Command
paper can be found at the following web address:
IAN PEARSON MP