Speaking today at a press conference in London, LibDem MEP Diana Wallis said if the UK Government ignored both her damning report, which accuses the UK Government of severe regulatory failures, and the upcoming UK Parliamentary Ombudsman’s report the EC would step in.
She said the European Parliament committee into the collapse of Equitable Life had enlisted the support of European Commissioner for internal markets and services Charlie McCreevy who was “very positive” about the committee’s findings.
McCreevy will attend a joint press conference with committee members next Tuesday after the European Parliament votes on the committee’s findings in Strasburg.
The European Parliament is expected to back the report which criticises the UK regulatory system of the time for a ‘light touch’ approach and failure to properly implement European legislation.
It also recommends the UK Government sets up a compensation scheme for victims. Compensation could cost up to £4bn.
She said the last time there was a special European Parliamentary committee of this type was 10 years ago, which addressed the problem of mad cows disease and led to major upheaval in European legislation.
She said she believed this report could have the same effect on the financial services sector.
She said the European Parliament did not have the ability to force compensation, but she believes the power of the report will mean McCreevy would step in if the UK Government failed to listen.
The UK Parliamentary Ombudsman is also in the middle of an investigation which has been delayed until at least after the Summer recess due to a 500 page joint response from the Treasury and FSA to her draft report.
A leak of the draft, in March, accused the Government of “serious and serial maladministration” and also attacked the FSA for failing to properly monitor the provider.
Wallis said it would make a “mockery” of the current system if the UK Government failed to act on Abraham’s recommendations, if it is indeed critical, alongside her committee’s report.
She said compensation from the UK Government should include victims in other European countries such as Ireland and Germany.
Wallis said: “The Parliamentary Ombudsman is a statutory body and I would expect the UK Government to abide by her recommendations. I hope her report will take into account our report and side by side there should be a compelling case for compensating victims.
“We may not have the power to order compensation but Member States cannot just ignore the opinion of the Parliament and the Commission and the Commission has the power to ensure that something further happens to compensate the victims.”