David Prosser: Another chance for ministers to ignore Equitable victims
Wednesday 27 May 2009
Outlook Is Joanna Lumley available? The actress knows how to force the Government to do what's right and change policy direction, which is more than can be said for the combined forces of the courts, the Parliamentary Ombudsman and opposition parties. So if even the most distant of Ms Lumley's relatives has somehow been caught up in the Equitable scandal, the various policyholder action groups should sign her up for their cause as soon as possible.
The latest development in this interminable legal saga is that one action group of Equitable policyholders has won the right to challenge the Government in the High Court over ministers' refusal to fully compensate them for the losses they suffered in the wake of the insurer's near total collapse almost nine years ago.
Good for them. But while the moral right is on their side, this Government's record on Equitable is so niggardly and dishonest that even if the policyholders win their challenge, their fight for justice may still not be over. The story of Equitable, for all its legal and financial complexities, is a simple one. Following the crisis that brought the insurer to its knees in 2000, independent investigations, including the exhaustive probe conducted by Ann Abraham, the Parliamentary Ombudsman, concluded that regulators had fallen down on the job of supervising Equitable's activities.
When the same thing happened at Northern Rock in 2007, the Government stepped in immediately to guarantee that not a single deposit holder would lose their money. At Equitable, on the other hand, ministers repeatedly rejected Ms Abraham's findings, before finally conceding earlier this year that they would have to compensate some of those who lost out. Even now, only a tiny proportion of the million or so Equitable policyholders the Ombudsman said were owed redress are likely to get anything.
If you've ever tried to coax an enraged toddler out of a tantrum, you might have an inkling of what it has been like trying to persuade the Government to do the right thing by Equitable policyholders. Pulling teeth doesn't begin to cover it. For the sake of fairness, we should at least acknowledge the Government's side of the argument. It says it does not agree with all of the Parliamentary Ombudsman's findings and also that it has a responsibility to ensure taxpayers' interests are protected.
The first of those arguments rather undermines the point of having an Ombudsman at all. As Ms Abraham herself put it, the Government has been "redoing the analysis and acting as judge on its own behalf". As for the second point, in an ideal world, taxpayers should never have to bail out the victims of a private company. But Equitable's members are taxpayers too. Some of their taxes went on covering the cost of a regulatory system that subsequently let them down very badly. They deserve better than the rough justice they have received.
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