James Daley: Brown set to be blamed and shamed
Saturday 12 July 2008
Yet another of Gordon Brown's chickens will be coming home to roost next week, when the Parliamentary Ombudsman, Ann Abraham, publishes a new, damning report that will lay the blame for the collapse of Equitable Life firmly at the feet of the Government.
In her conclusion, she will call on Mr Brown and Alistair Darling, the Chancellor, to stump up something approaching £4bn in compensation for the thousands of customers who lost out, and accuse the Department of Trade & Industry, the Government's Actuary Department, the Treasury and the Financial Services Authority of maladministration. If Mr Brown still has any credibility left when it comes to financial regulation, next week should just about finish him off.
In fairness to the current administration, the troubles at Equitable began well before the Tony and Gordon show came to Downing Street. In the early 1990s, it was the Conservative government which presided over the regime that let Equitable make generous guarantees to its customers, without having to keep the financial capital to back those promises.
But it was Brown's Treasury that was responsible for the insurer's regulation in the two years leading up to its collapse in December 2000, and who also failed to take appropriate action to mitigate consumers' losses after the event. More to the point, it is Mr Brown who will be seated at the head of Government when the report is published next week.
So what happens now? In any respectable democracy, you would hope that the Government would listen to the conclusions of its own independent regulator, apologise, and then get to work on finding the money as soon as possible for those who have lost out. Sadly, however, humility has never been Mr Brown's strong suit.
More likely, we will see an arrogant rejection of the Ombudsman's findings and an attempt to kick the report into the long grass – just as we saw with the Ombudsman's report into the occupational pensions scandal two years ago, where 125,000 people lost some or all of their company pension savings. That report was not so very different from this one. Once again, the Ombudsman found the Government guilty of maladministration, and once again, it recommended compensation.
However, there was one crucial difference. Back then, such a damning report by the Ombudsman, followed by such a swift brush-off by the Government, was pretty much unprecedented. In the months that followed, angry select committees criticised the Government for brushing aside the conclusions of such an important public body, while a judicial review of the Ombudsman's report upheld her conclusions and eventually brought enough pressure to bear on the Government that it was forced to meet the demands of the pensioners.
This time round, all of that is fresh in the memory, and politicians are in no mood to let Mr Brown hijack the workings of democracy yet again.
Furthermore, having seen how her occupational pensions report was treated, the Ombudsman has ensured that her new report is bulletproof – tough enough to stand up to any judge if the Government tries to play the same funny games as it did last time, two years ago.
So, in answer to my question – what happens now? – I'm really not sure. What I hope happens, however, is that MPs from all parties have the resolve to ensure justice is done. Although £4bn sounds like a lot of money at a time when the Government is already presiding over a £7.5bn black hole in its books, it is not so much when broken down on an annual basis.
Some 30,000 of those affected by the Equitable crisis have died over the past eight years. Many of them were forced to live out their last few years on meagre pensions. Fifteen more die every day. If Mr Brown refuses to step up and act responsibly this week, he must be forced to.
Fuel poverty could kill 100,000 vulnerable people over the next 15 years, charity warns
Phoenix Life: Chance of a refund for overcharged policyholders has risen
Simon Read: You're guilty until proven innocent when HMRC sends in the tax credit detectives
Simon Read: That's right, BT, they'd rather pay for a free service
Bank-beating exchange rates on your international payments
- 1 Forget 'The Dress': Here are five of the biggest news stories you might have missed
- 2 The black and blue dress: Makers considering a white and gold version
- 3 Prince Harry leaving the armed forced to pursue conservation projects in Africa
- 4 PornHub turns masturbation into energy in bid to save the planet
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
This is what it's like to be dead, according to a guy who died for a bit
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...
Day In a Page
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads