Equitable Life

Anne Main speaks out against means-testing when calculating possible compensation for people who lost out as a result of the collapse of Equitable Life.

Anne Main (St. Albans) (Con): I congratulate the hon. Member for Northavon (Steve Webb) on securing the debate. He is absolutely right. If the Minister does not realise today that there is a truly human face to this disaster, that real people are suffering and that the difference it is making to their lives is incalculable, something is very wrong. I am appalled by the idea of means-testing. I ask the Minister to consider who would sign up to any savings or pension plan if the small print said, "By the way, if this goes wrong, you will be means-tested." I suggest that no one would do so. To introduce that concept retrospectively is appalling, and it is not just me and other hon. Members in the Chamber today who are making such remarks. People have not been hoodwinked by the Government's deciding to address the issue selectively.

I am aware that the debate is coming to a close, so I shall leave the Minister with a comment from a constituent of mine who has been affected by the matter. He used an interesting analogy to make it clear how he feels about the Government's choosing to exclude people from fair and just compensation. He said to me:

"If, in a leisure moment you have seen any of the popular 'Pirate' films...you will remember Cap'n Jack Sparrow had a rather unusual compass-it pointed in any direction he wanted it to...a device borrowed"-

by the Chief Secretary-

"to respond to the Ombudsman report. Point it...in any direction except justice and fair compensation."

He could not have put it better.

The perception, and the reality-unless the Government change their mind rapidly-is that the Government are choosing who is worthy. I cannot think of a more iniquitous way to proceed with elderly people, many of whom are relying on the scheme to make their lives comfortable.

I want the Government to bear in mind that those people are suffering disproportionately as a result of many different blows. In particular, the Department for Work and Pensions presumes an income savings rate of 10.4 per cent., which is actually five times the achievable level of savings accounts should people have savings elsewhere. When the Minister is deciding who is in disproportionate need, will she consider that point? Some people might have savings in other accounts, but they too will not be generating what was expected. That is a double blow for people caught up in the Equitable Life scandal. Should the Minister wish to meet any of my constituents, I am sure that they will tell her what it feels like to face an impoverished old age, because someone has decided that they are not worthy of receiving what is due to them.

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ANNE'S OTHER INTERVENTIONS IN THE SAME DEBATE

Anne Main (St. Albans) (Con): I congratulate the hon. Gentleman on securing this important debate. Will he expand on the point he was making? The lack of transparency in the original process led to what my constituents have called a cruel deception-when Equitable Life was technically insolvent, but they were still encouraged to invest. Without the involvement in the process of such good men as the hon. Gentleman described, people will have no faith either in the Government or the transparency of the process that they are trying to put in place.

Steve Webb: There has been a series of regulatory failures under consecutive Governments, the answer to which has always been transparency. Had we known what was happening inside Equitable Life, many of those things would not have happened, but now we need to get inside Sir John's mind. The whole business seems extremely strange to me. The structure that the Government have adopted is a new creation and another way of kicking the matter into the long grass. We need an open process to respond positively to what the ombudsman said.

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Anne Main: The hon. Gentleman mentioned the word "destitute", but as we know many pensioners who are affected are in the benefits system in a way that they may not have been before. I am not sure whether the Government have truly assessed the impact of deciding to give money to some people and the effect that that will have on their benefits, or even on their tax burden. It is worrying that, in deciding who they award compensation to, the Government have not considered the impact on the future benefits of pensioners.

Mr. Heath: I am grateful to the hon. Lady for that intervention. There are two interpretations: either the Government know precisely what they are doing but are not prepared to tell us or the people who were investors in Equitable Life, or they are blundering around finding yet more delaying tactics to stave off the evil day when they finally have to do something, rather than talking about possibly doing something at some time in the future. I suspect that it is the latter, but we may hear the Minister say which of those two interpretations is so."