Julian Knight: No happy ending in sight for the victims of Equitable Life

This week will bring the latest twist in the seemingly never-ending saga of Equitable Life, the mutual life insurer that came to the brink of bankruptcy around the turn of the millennium. Ann Abraham, the Parliamentary Ombudsman, will release her long-delayed report on whether the Government was partly to blame for what happened.

Policyholder groups – representing thousands who have seen their life savings decimated – want to sue the Government for compensation. The main conclusion of Ms Abraham's report was leaked last week, and that is that the Government was guilty of maladministration.

However, we've been here before. Lord Penrose first reported on Equitable way back in 2004 and damned all and sundry, including the Government. The report was complex and over long, allowing the then Chief Secretary to the Treasury, Ruth Kelly, to draw the sting out of it in, what was frankly a masterful, but also a deeply amoral address to the House of Commons. The upshot was that the Government gave itself a clean bill of health and rubbished the idea that it should pay compensation.

This time around, despite the extra moral clout the Ombudsman has, the outcome will be the same. The policyholders will be left to fend for themselves – for two reasons. First, there is a deep-held view in Whitehall that the Government is not meant to compensate those who lose out through investment. This view was one of the stumbling blocks when the 125,000 people who lost their pensions in failed company schemes tried to get justice. After an age, the Government gave way on that occasion, but Equitable is seen as a very different kettle of fish. Although regulation was shoddy – the insurer should have been closed to new business far earlier than it was, to stop lots of good money going after bad – the real blame lies with its former management, who in turn were appointed by the members themselves.

Second, the Government simply doesn't have the money to pay an estimated £4bn in compensation. The UK's public finances resemble those of a banana republic more and more each day, and any reserves have been used up buying off Labour's 10p tax rebels.

Anyone who has followed the Equitable Life story as long as I have – nine years and counting – can't help but be struck by the sense of injustice felt by its policyholders. They signed up to the oldest, seemingly safest pair of hands in the business and were let down in a truly atrocious way. I well remember being buttonholed by one aged policyholder at the Equitable AGM a few years back. With tears in his eyes, clearly in ill health and weighed down with masses of paper relating to his case, he told me he wanted justice and at least some compensation "before they put me in a box". But whatever the Ombudsman says this week, I can't see these people getting their money back.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
tv
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
life
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
Extras
indybest
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    IT Project manager - Web E-commerce

    £65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

    Trainee / Experienced Recruitment Consultants

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

    Trainee Recruitment Consultant - Soho

    £20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

    Trainee Recruitment Consultants - Banking & Finance

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

    Day In a Page

    Secret politics of the weekly shop

    The politics of the weekly shop

    New app reveals political leanings of food companies
    Beam me up, Scottie!

    Beam me up, Scottie!

    Celebrity Trekkies from Alex Salmond to Barack Obama
    Beware Wet Paint: The ICA's latest ambitious exhibition

    Beware Wet Paint

    The ICA's latest ambitious exhibition
    Pink Floyd have produced some of rock's greatest ever album covers

    Pink Floyd have produced some of rock's greatest ever album covers

    Can 'The Endless River' carry on the tradition?
    Sanctuary for the suicidal

    Sanctuary for the suicidal

    One mother's story of how London charity Maytree helped her son with his depression
    A roller-coaster tale from the 'voice of a generation'

    Not That Kind of Girl:

    A roller-coaster tale from 'voice of a generation' Lena Dunham
    London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

    London is not bedlam or a cradle of vice

    In fact it, as much as anywhere, deserves independence
    Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

    Vivienne Westwood 'didn’t want' relationship with McLaren

    Designer 'felt pressured' into going out with Sex Pistols manager
    Jourdan Dunn: Model mother

    Model mother

    Jordan Dunn became one of the best-paid models in the world
    Apple still coolest brand – despite U2 PR disaster

    Apple still the coolest brand

    Despite PR disaster of free U2 album
    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits