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MPs vote to pass Equitable Life Bill
MPs on both sides of the House of Commons last night voted through the Equitable Life Payment Bill, bringing compensation payouts a step closer for the tens of thousands of policyholders who lost out in the insurer's near-collapse.
The Bill handed the Treasury the ability to make payments to the victims after a debate scheduled to last for six hours.
Mark Hoban, the Treasury Secretary, said the move would deliver "justice" to investors nearly a decade after Equitable Life was forced to close to new business in 2000 when it was unable to pay guaranteed annuities.
However, the Coalition was criticised for failing to come up with details about the amount that would be paid out, or even how the figure would be calculated.
Stephen Timms, shadow treasury secretary, said his party would not oppose the Bill. However, he scoffed at David Cameron's claim that the Government was taking action "where the rubber meets the road".
Mr Timms' comment met with protestations from Government MPs who told the shadow minister that Labour had had "over a decade" to sort out Equitable Life and "did nothing".
Mr Hoban repeated his pledge to include the exact compensation in next month's Spending Review.
It is estimated that policyholders lost around £5bn of investments in Equitable Life, including the amount they could have achieved had they invested with another life insurer.
A report published in July by Sir John Chadwick suggested they should share no more than £500m in compensation. Although the report was criticised as "unsound" and "unsafe" by the Parliamentary Ombudsman, Mr Hoban has said he would use it as a "building block" in making the final decision.
Chris Wiscarson, chief executive of Equitable, admitted this week that a figure of £2bn would be a "great start".