Anger over Equitable Life scandal payments 'betrayal'

Published on 15/01/2009 22:30

MINISTERS have been accused of betraying a million Equitable Life policyholders, as it emerged only a few may receive compensation after another review delay.

Yvette Cooper, the Chief Secretary to the Treasury, apologised for the maladministration of the scheme, which left about one million people out of pocket.

But she provoked anger from campaigners and MPs when she confirmed that the government would defy recommendations by the Parliamentary Ombudsman for an independent panel to investigate all claims.

Instead, she said a retired judge would decide on ex-gratia payments only to those who had been "disproportionately affected". She said there would be "serious repercussions for the taxpayer" if compensation was paid each time regulators failed to stop a firm getting into trouble.

No timescale could be put on when any decisions would be made, despite the maladministration being brought to light eight years ago. MPs criticised the "means-testing" of payments.

Paul Braithwaite, of the Equitable Members Action Group, said policyholders would be "depressed that this is more of the same stitch-up", and Vince Cable, the Liberal Democrats' Treasury spokesman, said many policyholders had died "while ministers have dragged their feet".