LibDem MEP Diana Wallis, who was the rapporteur of the recent European Parliament committee report into the collapse of the provider, told a press conference in London that European Commissioner for internal markets Charlie McCreevy was “very positive” about the report.
Wallis, and committee chair Mairead McGuinness, have constantly stressed throughout the 18 month investigation the European Parliament does not have the powers to order compensation and policyholders should not get their hopes up.
But Wallis now says the power of the report, set alongside the upcoming UK Parliamentary Ombudsman’s report, will provide a “compelling case for compensating victims”.
She said if the Government did not act to compensate victims then she believes the EC would force its hand.
McCreevy will attend a joint press conference this Tuesday after a vote in Strasburg where the European Parliament is expected to endorse the committee’s findings.
The committee report accuses the UK Government of severe regulatory failings at the time including a “light touch” approach and failure to properly implement European legislation.
The report recommends the UK Government sets up a compensation scheme for victims. Compensation has been estimated at up to £4bn.
Wallis compared the temporary committee’s report with the last report of its type which was 10 years ago and investigated the issue of Mad Cows Disease.
She said that report led to a major upheaval in European legislation and she believes the Equitable Life report will have the same effect on financial services.
The Government is also awaiting the results of Parliamentary Ombudsman Ann Abraham’s report into its handling of the Equitable Life affair.
Abraham recently announced her report would be delayed yet again until at least after the Summer recess due to a 500 page joint FSA and Treasury response to her draft report.
A leak of the draft report suggested it would accuse the Government of “severe and serial maladministration” and attack the FSA for failing to properly monitor the provider.
Evidently the Government and FSA are not taking this criticism lying down and familiar battle lines look like they may be drawn again.
With arguments over compensation for victims of occupational scheme collapses ping ponging from the Lords to the Commons this issue could also provide further embarrassment to Gordon Brown.
Elsewhere, Financial Ombudsman Service chief ombudsman Walter Merricks received a CBE in the Queen’s birthday honours list for services to the financial services industry.
Looking ahead, Parliament is anticipating another bruising encounter between the Treasury select committee and the private equity industry with further evidence sessions in the TSC’s investigation.
Last week’s session ended up in the resignation of British Private Equity and Venture Capital Association head Peter Linthwaite after he was savaged by committee members.
This week’s lambs to the slaughter- representatives from Permira, Kohlberg Kravis Roberts & Co, 3i, Carlyle Group, and Blackstone- will surely be more savvy as they try to persuade sceptical MPs that a little tinkering rather than full scale reform is all that is needed.