David Prosser: Equitable victims take their share of pain

Outlook One small part of the spending review that the shadow Chancellor, Alan Johnson, chose not to address in his response was Mr Osborne's announcement of a £1.5bn compensation settlement for victims of the Equitable Life injustice. No wonder: the Chancellor was quite right to accuse his Labour predecessors in Government of "dithering" in their response to a series of reports from the Parliamentary Ombudsman, calling for redress for those who lost out as a result of the failure to properly regulate Equitable. Moreover, on the face of it, the offer made to Equitable victims looks to be a decent one.

It is broadly based on the terms of reference suggested by the Ombudsman and is worth more than three times as much as the package suggested by Sir John Chadwick, eventually appointed by the last Government with a brief shamelessly designed to give the appearance of finally giving some justice to Equitable savers while keeping the bill to a minimum.

Still, Equitable savers will continue to feel aggrieved. The £1.5bn payment is worth half the sumsuggested by the Ombudsman (she thought a figure between £2.9bn and £3.7bn would be fair) and less than a third of the £4.8bn at which the actuarial consultant Towers Perrin has put the total Equitable loss.

The defence for the lower payment is that the Equitable losers must share in the spending review pain like everyone else. But in the context of the 19 per cent average departmental spending cut, one can see why campaigners might baulk at their compensation being scaled back by as much as 68 per cent. Mr Osborne was not sogenerous after all.