The committee also supported Ombudsman Ann Abraham’s call for a full and “unreserved” apology from the public bodies responsible for overseeing Equitable Life with MPs urging the Government to accept the findings of maladministration.
Failure to accept the Abraham’s findings would “seriously undermine the Ombudsman’s office and the ability to learn lessons from the Equitable Life affair” the committee found.
The MPs backed the Ombudsman’s proposals for an independent compensation scheme administered by a tribunal, but argued that the Government should not sign a blank cheque and compensation should put policyholders back into the position that they would have been in had the maladministration not taken place.
The committee rejected the idea of only compensating victims that are experiencing financial hardship as it argued this is not a matter of charity, but it concluded the Government should prioritise making interim payments to those in difficulty.
The MPs also called for a review of the way in which serious failures of this kind are investigated in the future by the Government, as they say the failure to establish a comprehensive and fit for purpose investigation has caused delay and frustration for policyholders.
Liberal Democrat Shadow Chancellor Vince Cable says: “After months of dragging his feet Gordon Brown must now apologise to policyholders and take action to deal with financial compensation.
“In a week when the Government once again delayed its response to Equitable Life policyholders, this report is another damning indictment of regulatory failure.
“The Government should apologise for the years of delay, anxiety and unanswered questions suffered by policyholders.
“Ministers have not only completely failed to regulate properly, but have proven themselves utterly incapable of establishing a proper investigation into this affair.”