The Ombudsman's report on the government's conduct leading up to and during the collapse of pension provider Equitable Life has been much delayed. It is now scheduled to be issued later this week. However, at least two economic commentators, James Daley of The Independent and the Daily Telegraph's Damian Reece have already seen the contents, which lay the blame on government.
One wonders whether someone in the Ombudsman's office, or in No 10, fearful of yet another postponement of publication, has tried to force Gordon Brown's hand by leaking the report.
Certainly, although the Conservatives under Thatcher and Major created the economic climate in which Equitable made its rash promises to clients, it was Gordon Brown's Treasury which was responsible for regulation of the insurance market in the two years before the collapse, and let its failed customers swing in the wind thereafter. It would be understandable if New Labour attempted to bury this bad news.
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The report is out today. Vince Cable has commented: "After eight years and 13 reports it’s time for the Government to finally admit that it comprehensively failed to regulate Equitable Life properly.
"For years ministers have acted like they were in a castle under siege, hoping that Equitable Life policy holders would give up and go away. Today’s report shows that, rightly, this is not going to happen.
"Gordon Brown has overseen a complete and repeated failure of regulation spanning a decade. The outrage expressed by policyholders over this ‘serial regulatory failure’ is entirely justified.
"After months of dragging its feet, the Government needs to accept the Ombudsman’s recommendation that ‘wrongs should be remedied’.
"If ministers choose to disregard this report, as they have done over tax credits and occupational pensions, it will be the final nail in the coffin for the Ombudsman’s credibility.
"These are large sums of money, especially at a time when belts are being tightened. Gordon Brown must now admit fault and apologise to policyholders.
"It is critical that the Government now sets out a credible, transparent and independent process to enter into a dialogue with policy holders over compensation."
The LibDem Treasurty team has established that, since 2001, there have been 13 reports concerning Equitable Life:
1. Corley Institute of Actuaries (Sept 01)
2. Treasury Select Committee (March 2001)
3. FSA (Oct 01)
4. Parliamentary Ombudsman first report (June 03)
5. Penrose report (March 04)
6. Paul Myners Corporate Governance of Mutuals
7. Sir Derek Morris’s review of the actuarial profession
8. Faculty of Actuaries into Ranson and Headdon (March 07)
9. FSA on Penrose (July 04)
10. Financial Ombudsman’s service (March 05)
11. EQUI for the EU Parliament (June 2007)
12. Joint Disciplinary Scheme for the Institute of Chartered
Accountants (yet to be published)
13. Parliamentary Ombudsman’s second report (July 08)
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