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MPs slam Govt’s “constitutionally dubious” and “shabby” Eq Life response

MPs have lambasted the Government’s response to the Parliamentary ombudsman’s call for compensation for Equitable Life policyholders as “shabby, constitutionally dubious and procedurally improper”.

In a new paper out today titled “Justice Denied?”, the public administration committee was heavily critical of the Government, calling on it to rethink its response to Ann Abraham’s recommendations.

Committee chairman Tony Wright said the Government’s response was “inadequate as a remedy for injustice”.

He said: “The Government’s response has produced a strongly negative response not only from us, but also from the Ombudsman, from Equitable Life and from policyholder representatives. This should give the Government pause for thought.”

Treasury Chief Secretary Yvette Cooper announced in January that a scheme would make “ex-gratia” payments to investors who were “disproportionately affected”. She added that former Lord Justice of the Court of Appeal Sir John Chadwick would assess the extent of losses that could be attributed to Government maladministration.

But the committee called for the disproportionate impact test to be scrapped altogether to make the scheme simpler. If the Government insists on the test, it should not place a burden on policyholders to provide further information, Wright said.

Wright added: “The Government has taken a highly selective and partial approach to its representation of our views. It has not addressed our conclusions or analysed our arguments, but simply taken our words out of context to support arguments of its own.”

The Government has indicated that a scheme may not be completed for considerably longer than two and a half years, as such the committee called for it to make interim payments to policyholder who need them most.

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