UK - MPs from all sides slammed Treasury inaction over the Equitable debacle, calling for the Government to compensate policyholders should they be found guilty of "negligence" by the long awaited Penrose inquiry.
The attack, which accused the Government of knowing about the problems as far back as 1998, went onto say that the Treasury was trying to suggest a not me guv situation, and that the entire affair represented a “a prima facie case of maladministration”.
Tory MP Richard Ottaway for Croydon, South, highlighted the point with reference to the House of Lords role before the situation developed into a full-blown crisis: “If five Law Lords can reach that conclusion after looking at the documents for a few days, why cannot the Treasury - with its army of advisers and all the time in the world - also reach the same conclusion? The Treasury must have read the contracts. If it did not, that is negligence beyond anyone's imagination.”
Christopher Chope, Tory MP for Christchurch added that that the Baird Report included “a number of other damning indictments of Treasury involvement”, despite reservations from some House quarters on the “credibility” of a report by the FSA into itself.
MPs also accused the Government as already having “prejudged” the inquiry, pushing the Treasury to say whether or not it was prepared to keep an “open mind” on the issue of compensation. Economic Secretary to the Treasury, Ruth Kelly, replied: “I certainly would not prejudge any recommendations that Lord Penrose will make.
“It is totally open to him to pursue the lines of inquiry which he sees fit.
The Penrose report will investigate events beyond recent years, a call welcomed by some MPs, led by Barry Gardiner, Labour MP for Brent North, who also pointed to the role of preceding administrations in the Equitable drama.
The FSA’s “passive approach to regulation” also came under fire, as well as the “reluctance” of the parliamentary ombudsman in bringing ‘guilty’ parties to book by forcing compensation. Other issues raised by the debate included the annuity obligations and a possible reappraisal of pensions policy; the role stakeholder pensions, and improved risk-based assessment.
Kelly said that she had already written to FSA chairman, Howard Davies, asking him to “pursue vigorously” the recommendations contained in the report. A full report is expected by 20 November.
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