Equitable Life

Part of Business of the House – in the House of Commons at 1:21 pm on 15 January 2009.

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Photo of Yvette Cooper Yvette Cooper The Chief Secretary to the Treasury 1:21, 15 January 2009

The right hon. Gentleman is advocating a pure compensation scheme. I set out in my statement exactly why I think that that would not be the right approach and why it would fundamentally change the relationship between the Government and the financial markets were we to set up a system in which the taxpayer was always to pay out whenever there was regulatory failure. We believe that that is an important principle, but we also think that it is right to focus on those who have been hardest hit and to recognise where there has been disproportionate impact. The shadow Chancellor has also said:

"As the Ombudsman makes clear, policyholders cannot expect to receive payments for the full losses suffered and any payment scheme must be consistent with...public finances".

Members on both sides of the House recognise that there are difficult issues that need to be taken into account. We believe that we should be fair and recognise the difficult circumstances that some policyholders, in particular, have been hit by.