Equitable Life campaigners have urged the Chancellor, Alistair Darling, to "break the logjam" of six years of critical reports on the insurer's near-collapse, and to respond to the European Parliament's call for the UK government to compensate policyholders.
Equitable Members Action Group (Emag) delivered a letter to the chancellor yesterday with the backing of Dr Vince Cable, the LibDem Treasury spokesman, and the LibDem MEP Diana Wallis, who was the European Parliament's rapporteur in its Equitable inquiry, the first of its kind in 10 years.
In June, the European Parliament overwhelmingly endorsed the 385-page report, which urged the setting-up of a compensation scheme for one million policyholders damaged by the government's failure to regulate Equitable at the end of the 1990s.
The report said regulators had "behaved with undue awe or deference towards Equitable Life . . . and apparently believed (it) to be too good and too reputable to make mistakes". This had exacer-bated a "weak regulatory environment, which allowed the difficulties at Equitable Life to grow unchecked".
It concluded that "given the absence either of accessible legal redress through the courts or of effective alternative means of redress ... the UK government is under an obligation to assume responsibility".
The EU's 22-member committee heard from a total of 38 witnesses at 11 public hearings, including evidence last November from The Herald, on orchestrated mis-selling by Equitable Life and the discriminatory treatment of complainants.
Leading barrister Lord Neill of Bladen, the former chairman of the Committee on Standards in Public Life, had told the inquiry that the government was "using every conceivable excuse to ensure that the Treasury is not liable for compensation".
In the letter to the chan- cellor, Paul Braithwaite, the secretary of the 10,000-strong Emag, says he hopes that the "new ministerial line-up at the Treasury will bring a fresh approach to a problem that has festered to the detriment of the reputations of the UK regulators and the financial service industry alike for far too long".
Braithwaite says it was six years ago this month that he and Cable delivered a letter to then chancellor Gordon Brown about the plight of Equitable Life sufferers. "In the summer of 2004, frustrated and feeling that we were being denied justice in the UK, Emag set about preparing a petition to the EU Parliament."
The letter goes on: "The report is highly critical of the UK government and contains 47 recommendations, many of which were aimed directly at the UK. European citizens in all 27 member states might reasonably expect the UK to show respect and leadership in addressing these recommendations."
The government has said it will not be responding to the European report until after the parliamentary ombudsman, Ann Abraham, has published her report - which has been delayed several times by the "discovery" of fresh documents by government departments and is now unlikely to be published this year. Emag's letter says the ombudsman has "absolutely no remit with regard to European Law or the single European Market, which are the central issues addressed by (the EU report)". It asks the new chancellor to "ensure a comprehensive response" to the European Parliament, and urges new economic secretary Kitty Ussher to relent on her refusal to meet with Emag.
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