Equitable Life: Ombudsman Should Investigate Further

1.43.00pm BST (GMT +0100) Wed 19th May 2004

Liberal Democrat Shadow Chancellor Dr Vince Cable today urged the Parliamentary Ombudsman to reopen her enquiries into Equitable Life, specifically looking at the role of the Government Actuaries Department, criticised by Lord Penrose following investigations into the regulation of Equitable Life.

The Government Actuaries Department (GAD) is currently exempt from investigation by the Parliamentary Ombudsman. Financial Secretary Ruth Kelly has signalled she will consider any request by the Ombudsman to investigate the GAD. As well as urging the Ombudsman to do this, Dr Cable has today written to the Head of the GAD Christopher Daykin requesting that, in the interests of open and transparent Government, the GAD offers itself up for scrutiny to the Ombudsman, thereby removing any further barriers preventing this move.

Vince Cable said: "Equitable Life is holding its Annual General Meeting today. Those who lost their savings in the Equitable Life fiasco are still waiting for a resolution to this affair.

"It would be helpful if the Ombudsman investigated the role of the GAD in light of the findings in the Penrose report. It would be even more helpful if the UK Government Actuary Christopher Daykin signalled the GAD's willingness to be scrutinised by the Ombudsman. This is the only course of action the GAD can take if it has nothing to hide, and it is necessary for clear and open government.

"Lord Penrose's findings made considerable criticisms into the regulation of Equitable Life - particularly the role of the GAD. It is entirely right and proper that the Ombudsman should make further investigations.

"The Penrose investigation was very limited in it remit. It is now time that the Ombudsman looked specifically at whether there is a case of maladministration in the regulation of Equitable Life. The Government owes this to the thousands of policy holders who have lost large amounts of their life savings."

Dr Cable and Liberal Democrat Treasury Team colleague Norman Lamb MP (also a member of the Treasury Select Committee) have already written to the Ombudsman to request that she investigates the GAD following the findings of the Penrose report.

Ends.

Notes

Text of Vince Cable's letter to the UK Government Actuary Christopher Daykin CB dated 19th May 2004:

Dear Mr. Daykin,

RE: EQUITABLE LIFE

You are most likely aware following the Penrose report, the Parliamentary Ombudsman is considering reopening her inquiry into the regulation of Equitable Life. She has asked MP's to submit their views. Norman Lamb and I have written on behalf of the Liberal Democrats asking that she reopen her inquiry to look at whether there was maladministration in the regulation of Equitable Life by the Government Actuaries Department.

The Government Actuaries Department came under considerable criticism in Lord Penrose's findings in particular stating

"There was a general failure on the part of the regulators and the GAD to follow up issues that arose in the course of their regulation of the Society, and to mount effective challenge of the management." Section 240 (11).

The GAD does not currently fall under the remit of the Parliamentary Ombudsman and as such she cannot investigate your actions. However Ruth Kelly in a recent letter to my colleague Norman Lamb MP stated that it would be possible to put the GAD under the Parliamentary Ombudsman's remit retrospectively and would consider doing so on receiving representations from the P.O herself.

We have asked the P.O to do this but; I would also ask you if you would consider making such representations to Ruth Kelly asking yourself to be put under the remit of the Parliamentary Ombudsman. I am sure you would see the merits of such representations in order that the GAD can open itself to full scrutiny as part of clear and open government.

I look forward to hearing from you in the near future.

Yours Sincerely,

Vincent Cable MP,

Liberal Democrat Shadow Chancellor of the Exchequer.