The European Commission could force the Government to compensate Equitable Life victims if it ignores reports from the European Parliament’s committee of inquiry and UK Parliamentary Ombudsman, claims a leading committee MEP.
The European Parliament this week voted through the committee of inquiry report recommendations by 602 votes to 13, with 64 abstentions.
The report accuses the Government of a “light-touch” approach to regulation and failure to properly implement European legislation. It also criticises the FSA and Financial Ombudsman Service.
It recommends that the Government sets up a compensation scheme for victims. This could cost up to £4bn.
LibDem MEP and report rapporteur Diana Wallis says the power of the report, alongside the UK Parliamentary Ombudsman’s upcoming report, should act as “a pincer movement” to deliver compensation to victims.
The Treasury and FSA recently submitted a 500-page response to Parliamentary Ombudsman Ann Abraham’s draft report which is thought to have accused the Government of “serious and serial maladministration”.
Wallis says if the Government does not offer compensation, she believes that the EC will force it to do so.
European commissioner for internal markets and services Charlie McCreevy told a press conference after the vote in Strasburg that compensation is a matter for member states.
Wallis said: “We may not have the power to order compensation but member states cannot just ignore the opinion of Parliament and the Commission has the power to ensure something further happens to compensate the victims.”