End in sight for Equitable Life policyholders

Thursday, 22 July 2010 12:45 PM

By politics.co.uk staff

Policyholders who lost money as a result of the near-collapse of Equitable Life ten years ago will receive compensation next year, the Treasury has confirmed.

Mark Hoban told the Commons the precise amounts would be revealed on October 20th as part of the comprehensive spending review. Final compensation payments are to be made in mid-2011.

"The scheme will be a significant spending commitment for this government and cannot be considered in isolation from the other spending decisions that it will need to make over the coming months, and what is affordable in that context," he explained.

Regulatory malpractice was attributed as the reason for the crisis at Equitable Life but the Labour government resisted attempts to provide compensation for those who had lost out.

One Commons committee condemned their stance as "morally unacceptable". Over 30,000 policyholders have died since 2000.

Today saw the publication of Sir John Chadwick's report in relation to losses suffered as a result of government maladministration. He had been asked in January 2009 to advise the previous government on working out relative losses suffered by policyholders.

Mr Hoban downplayed the report, saying it was "just one of the building blocks in resolving what is a complex matter".

His statement raises concerns that the wider spending cuts agenda will limit the compensation eventually made available.

"As I said at the start, I have long been a strong advocate of ending the plight of Equitable Life policyholders," Mr Hoban added.

"Like you, I want to see a swift response, but also one that is transparent and fair to all policyholders, and the taxpayer. I believe that the steps I have outlined today take us closer to achieving this."

The coalition government originally pledged to provide compensation for all those who had lost out in the Queen's Speech.

The Equitable Life payments scheme bill is set to "give the Treasury statutory authority to incur expenditure in making payments to Equitable Life policyholders".

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