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Treasury Questions

2nd March 2016

Harriett Baldwin answers MPs’ questions on issues including the compensation scheme for Equitable Life policyholders.

Equitable Life

9. Mr Laurence Robertson (Tewkesbury) (Con): If he will reopen the compensation scheme for Equitable Life policyholders. [903823]

The Economic Secretary to the Treasury (Harriett Baldwin): The Equitable Life payment scheme has now successfully traced and paid 90% of eligible policyholders. Payments to with-profits annuitants will continue for the life of these annuities. The scheme is now closed to new claims.

Mr Robertson: I thank the Minister for that response, but given that many policyholders lost out because of a failure of regulation, which should be overseen by not just this Government but any Government, is it not fair that those policyholders should receive compensation? If they do not, how can any investor have any confidence in the regulatory system that is put in place?

Harriett Baldwin: The Chancellor has done more than anyone else to tackle the regulatory failure of the 1990s with regard to Equitable Life. For example, with-profits annuitants will receive full compensation for the life of the annuity, pre-1992 annuitants have received ex gratia payments of up to £10,000, and £775 million has been paid out tax-free to others, despite the constrained public finances. Those on pensions credit got a doubling of their payment just before Christmas.

John Pugh (Southport) (LD): Will the Minister clarify how much of the £1.5 billion promised by the Government has been delivered and handed over?

Harriett Baldwin: I regularly update Parliament on the precise figures. So far, we are at almost £1 billion. Of course, the payments for the annuitants will continue for the rest of their lives.

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Topical Questions

Craig Tracey (North Warwickshire) (Con): I welcome the fact that my constituents have been given more control over their finances, thanks to changes implemented by the Government. Can the Minister advise me on what steps have been taken to ensure that the regulation applied to small high street financial advisers and insurance brokers is both fair and proportionate, given the important service that they provide?

The Economic Secretary to the Treasury (Harriett Baldwin): I thank my hon. Friend for raising this point. We have launched something called the financial advice market review, which will be reporting around the time of the Budget. We will be looking at how to make financial advice more affordable and more available, and also at how to get the right kind of regulatory balance for smaller firms.

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Byron Davies (Gower) (Con): The Chancellor will be aware that debates have been held and questions asked in the House regarding serious allegations of collusion between banks and valuers in order to deliberately undervalue and seize assets. Has he considered the current regulations on such banks and valuers, and whether there needs to be a broader remit for the Serious Fraud Office and other organisations to investigate these serious allegations, whose number is growing?

Harriett Baldwin: I am aware of the points my hon. Friend has raised in Westminster Hall and obviously I am keen for our system to have a tough set of rules on conduct in the banking system. I would welcome the opportunity to meet him to discuss these specific allegations in more detail.

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