Mark Hoban (Financial Secretary, HM Treasury; Fareham, Conservative)
My hon. Friend is absolutely right. Our obligation is to compensate people for regulatory failure by the Government when they were the regulator of Equitable Life. The scheme is not an open-ended compensation scheme. It is very focused, and that was the ombudsman's recommendation. Her locus in this matter is a consequence of the Government having acted as the regulator for Equitable Life during the period in question.
Let me explain to the Committee and to Mr Hamilton, who raised the question, why 1 September 1992 is a logical, not arbitrary, date. The ombudsman indicated in her report that there were problems with the regulatory returns for 1991, and that those could influence policyholder behaviour. However, they could not have come to the attention of policyholders, and prospective policyholders, before they were submitted at the end of June 1992. No policyholder would have been aware of that regulatory failure until the returns had been published. It is unlikely that those returns would have come to anyone's attention prior to 1 September 1992. I stress that the date is not arbitrary, but a consequence of the ombudsman's findings and how they impact on what policyholders would have been aware of. Policyholders would not have been aware of the regulatory failure until the autumn of 1992.
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