I had another meeting with Equitable Life policy holders in Wokingham this morning. I reminded them that I was one of the MPs who had successfully called on the Conservative party to offer some compensation to EL savers, in recognition of the regulatory errors made. Labour in office spent many years considering the issues without offering any money.
The incoming government set up a compensation scheme as promised. They offered up to £15oo million It does not offer full compensation to all policyholders, and we never promised full compensation. The government did decide to give better compensation to with profit annuity holders, who were locked in and who suffered most therefore from the regulatory as well as the investment mistakes.
I understand the worries of some who suffered in this crisis that they are heavily out of pocket from what has happened. I am happy to take up any individual case where someone thinks the compensation scheme has not paid out the correct amount to them under the terms of the scheme. I am afraid it is most unlikely that any party will offer a new and enhanced scheme in the run up to the 2015 election. I understand the unhappiness of people who saw their savings badly damaged by the events at EL, but no government can stand behind all savings and protect everyone against all loss.
For pensioners who were going to rely on their EL savings who now find themselves in financial difficulties there are a range of pensioner payments and benefits from the state to ensure they can meet their essential bills. There is the state retirement pension itself, Pensioner Credit, housing benefit, Council tax assistance, travel concessions, free tv licence, and assistance with heating bills in cold weather. Most individual pensioners will be eligible for some or all of these depending on circumstances. If my office can help we are willing to do so.
The national representatives of Equitable Life AG who attended argued that Equitable Life was insolvent in 2000 when they think the Labour government should have wound it up and paid full compensation. They did not do so and Equitable Life has continued to operate without going into insolvency. Current Treasury Ministers hold the same government view that Equitable Life “did not become insolvent and continues to operate” (Econ Sec to Treasury).