Equitable Life compensation battle not over, says Beith

10.15.00am BST (GMT +0100) Fri 26th Jun 2009

Berwick-upon-Tweed's Liberal Democrat MP Sir Alan Beith has slammed the government's refusal to act on a recommendation which could have seen thousands of people affected by the collapse of Equitable Life receiving compensation.

Despite the Parliamentary Ombudsman, Ann Abraham, recommending in July 2008 that, considering the regulatory failure and mismanagement of Equitable Life, compensation should be paid out, nothing has happened.

Sir Alan told Parliament on Wednesday:

"In identifying regulatory failure as a separate matter, she provided the Government with an avenue for what would be reasonable compensation. The Government's refusal to implement her report is appalling."

Concern was also raised that in not acting to award compensation in this case, future failure would become more likely.

Sir Alan said:

"Compensation is an essential discipline of the regulatory and governmental system. If no consequences follow from regulatory failure, either for the regulating body or the Government, there will be much more regulatory failure in the future. Just as the market has its disciplines, so must the regulatory system."

Following the debate, Alan Beith said

"The Minister's answers are another completely inadequate response to this issue, so the battle for compensation will continue. Many people in the Berwick-upon-Tweed constituency have been affected by the collapse of Equitable Life."