Ombusdman to use ‘nuclear option’ in rare public dressing down over government’s handling of compensation for Equitable Life policyholders
A parliamentary watchdog will today add to the government’s woes by giving ministers a rare public dressing down for defying her calls for proper compensation for Equitable Life policyholders.
It is understood the parliamentary ombudsman, Ann Abraham, is laying a special report before MPs this afternoon in which she will criticise the government for rejecting many of her recommendations relating to its handling of the problems at Equitable Life.
This is only the fifth time in 40 years that the ombudsman has published one of these so-called “section 10(3)” reports, which are described by some as the “nuclear option”, available to the watchdog when it is totally dissatisfied with a public body’s response to its findings. Previous 10(3) reports have led to the government implementing recommendations it had previously rejected. The contents of Abraham’s report are expected to be made public tomorrow morning.
A million customers saw their retirement savings slashed when Equitable was plunged into chaos by a court ruling in 2000 that the insurer must honour guarantees it had made to pension investors.
Campaigners have long battled for compensation, and last year it looked as if the government would have to pay out billions of pounds when Abraham said she had found evidence of “serial regulatory failure” by the government departments and watchdogs that were supposed to be protecting the insurer’s customers.
Treasury minister Yvette Cooper later apologised for the “maladministration” that led to the insurer’s near collapse but rejected calls for the government to offer compensation to all Equitable members.
A retired judge has been appointed to work out which policyholders have been hardest hit and what proportion of their losses can be attributed to maladministration.
MPs on the Commons public administration committee have already slammed the government for the “shabby, constitutionally dubious and proccedurally improper” way it responded to Abraham’s original report.
In January, Abraham said she was entitled to lay a special report before parliament “if, after conducting an investigation, it appears to me that injustice has been caused in consequence of maladministration and that this injustice has not been, or will not be, remedied”.
She added: “It is clear to me that the nature of the government’s response to my report means the injustice that I have found resulted from maladministration will not in every case be remedied – nor in any case will it be remedied fully.”
- Equitable Life
- Pensions
- Insurance
- Investments
Tags: commons, equitable, equitable life, feeds, guarantees, guardian-news, money, nature, parliamentary, pensions, politics, the-government, uk news, yvette-cooper