Liberal Democrat Treasury Spokesman Vincent Cable has called for the Parliamentary Ombudsman to investigate whether compensation is due and in what forms.
Cable says although Penrose does not make recommendations on compensation the report holds that policy holders have had much worry and distress, with many continuing to experience financial hardship.
He says the Government's reaction to the Penrose report is “a total whitewash and seeks to distort Lord Penrose's findings”.
Cable believes it ignores the specific criticisms of government regulation seeking to pretend the financial plight of Equitable Life policy holders is solely the consequence of the regulatory system, which was in place since the former Conservative government.
He says: “This Labour government has been in power for nearly seven years. While I have no sympathy with the previous Conservative administration, I feel that the government's constant pretence that any problem it faces is merely the fault of its predecessor is not only growing tiresome but is simply untrue.”