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Diana Wallis: At last, will we get equal treatment for victims of the Equitable Life fiasco?
EQUITABLE treatment? About time, too! One category of early credit crunch victims (or rather victims of regulatory failure) should finally get some well deserved and long overdue good news today.
An announcement is expected from the Government in response to the Parliamentary Ombudsman's report which was actually entitled Equitable Life: A Decade of Regulatory Failure.
The report, which was published in its final form in July 2008, had, as is normal practice, been the subject of much discussion with the Government over a period of years. In these circumstances, we might have expected a fairlyinstant response, but no.
Originally, we were told to expect a response in the autumn, and autumn has long since faded into winter.
Whatever the news about compensation for the many Europe-wide victims of the British insurer Equitable Life, many questions will be left unanswered; questions about who the villains of the piece were and why it has taken so long for their victims to be recognised.
There is surely an element of unequal treatment when one looks at the speed with which the Government rowed in to the aid of Northern Rock investors and latterly investors in Icelandic banks.
No one can doubt that speed was necessary in those cases, although one might in the latter case question the extraordinary use of anti-terror legislation. The overall pattern is interesting and surely reveals a certain application of double standards.
When there is someone or something else to blame – a global financial crisis, greedy banks, or light-touch regulation in Iceland – then the Government has no problem.
Gordon Brown struts the international stage talking the talk about the need for global financial regulation. The strange thing is that in the case of Equitable Life we had the nearest available equivalent to global regulation – that is, no fewer than three European-wide directives on life insurance.
Directives which we, in the European Parliament inquiry into Equitable Life, found had not been properly implemented by the very same Government which now champions an internationalist approach to the financial world.
Yet despite these findings of the European Parliament, which were likewise confirmed by the UK's Parliamentary Ombudsman and endorsed by the Government's own change of stance on the issue, no apologies to the victims of Equitable Life have been forthcoming from the Government.
When it comes to owning up to the decade of regulatory failure, a failure that has arguably made, or is making, the current financial crisis worse in this country than in some of our more prudent European neighbours, the Government has been slow, very slow, in coming forward.
Equitable victims have been faced with literally years of missed dates and prevarication. It is to be hoped that the Government will now come clean and propose a comprehensive compensation package applicable equally to the UK and other EU investors, a principle of equal treatment that was also underscored by the Ombudsman.
Indeed, in this brave new world of potential global financial regulation, equal treatment is a principle that bears examination.
The victims of Equitable have had to wait years to get an offer of compensation and have been led a merry dance through legal and other dispute settlement procedures.
If you are an Icelandic investor in an Icelandic bank, you have probably lost your pension and your savings, but you might be able to retrieve something in respect of your current account.
If you were a mainland British investor in an Icelandic bank, you will be compensated, but presumably you will have not lost
everything in the same way as the average Icelander. Are you confused? Is this equal treatment?
The main thing for this week is equal treatment; indeed just plain fair treatment, long overdue for Equitable Life victims.
In the longer term, we would do well to ask ourselves what exactly is fair treatment.
If the financial crisis continues with further failures across international frontiers, and if financial institutions are regulated equally, then surely there is a similar argument in favour of their customers, hopefully not always their "victims", being compensated in an equally timely and fair manner if things go awry.
Diana Wallis is the Liberal Democrat MEP for Yorkshire & the Humber. She is a Vice-President of the European Parliament and is the author of the Parliament's report into the collapse of Equitable Life.
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