Equitable action group fails to win backing to sue Government

Equitable Life members are set to lose their bid to secure a £2m fighting fund to sue the Government, with proxy votes believed to have fallen a long way short of the necessary 50 per cent.

Equitable Life members are set to lose their bid to secure a £2m fighting fund to sue the Government, with proxy votes believed to have fallen a long way short of the necessary 50 per cent.

The Equitable Members Action Group, which proposed the motion, is expected to turn out in full force to vote in favour at today's annual meeting, and are likely to secure a victory on the floor of the AGM. However, the majority of the thousands of proxy votes already received are believed to have voted against the motion.

Emag tabled the motion after Vanni Treves, the chairman of Equitable, announced last month that the society would not be pursuing its own legal action against the Government.

After once again advising those on the floor to vote against the Emag motion today, Mr Treves is expected to lay out the case for the Parliamentary Ombudsman, Ann Abraham, to reopen her inquiry into the regulation of Equitable Life.

Last month, Ms Abraham wrote to MPs to ask whether they believed there was a good enough case for reopening her inquiry into the troubled mutual. Ian Gibson, the Labour MP for Norwich, tabled an Early Day Motion calling on MPs to support a further inquiry, and has so far received almost 80 signatures supporting his motion.

Ms Abraham now looks highly likely to reopen the investigation after Ruth Kelly, the Financial Secretary to the Treasury, admitted last month that it would be possible for the Ombudsman to examine the role of the Government Actuary Department, which was excluded from her original investigation.

In his report on Equitable published earlier this year, Lord Penrose highlighted the GAD as being at the centre of the Government's regulatory failure over the insurer. Until last month, Ms Kelly had signalled that it would not be possible to allow the Ombudsman to examine the GAD without taking on time-consuming primary legislation.