HC Deb 17 February 1975 vol 886 cc894-5
6. Mr. McCrindle

asked the Secretary of State for Trade when he expects to introduce the promised legislation to protect policy holders.

Mr. Clinton Davis

As soon as possible this Session.

Mr. McCrindle

In view of the possible delay and the danger of retrospective legislation, will the Minister look at the position of Nation Life policy holders? Will he, for example, consider engaging in further discussions with the insurance interests to see whether agreement can be reached to a joint declaration between the Government and the Life Offices Association indicating that, when the amount from the liquidator from realisable assets is known, those who have effected these contracts can know that the Government and the insurance industry combined will then be prepared to make up the difference between that percentage and perhaps 80 per cent. to 90 per cent. of the original investment? Does the Minister realise that great worry and concern exist among a great many people and that joint action by the Government and the insurance companies would be most welcome?

Mr. Davis

I appreciate the anxiety and distress that have been caused as a result of this unfortunate failure, but I cannot agree that Nation Life should be encompassed by the Government's scheme. This scheme is to be financed by a statutory levy on the insurers and it would be wholly unreasonable to expect them to pay out for losses in respect of companies that fell before the announcement was made by my right hon. Friend on 29th October last year.

Mr. Edwin Wainwright

Does my hon. Friend realise that there are thousands of people throughout the country who get involved in this sort of thing and that the dreadful thing is that I am told that even today Nation Life is taking contributions from individuals? Will he have another look at the problem, because it is a great pity when working-class people are so kidded on by financiers of this kind to invest in concerns such as Nation Life and then lose their money to the extent that they will lose it?

Mr. Davis

It is true—this is one of the principal reasons for the introduction of our scheme—that ordinary people who have no expertise in these matters and who rely on the expertise of others, which is not always forthcoming or available, find it very difficult to distinguish between one company and another and one policy and another. Therefore, it is a fundamental aspect of our scheme that we should help such people. It is quite another thing to introduce the scheme on the basis of retrospection to a degree where the insurance industry could not possibly have recognised that it was being called upon to help this organisation.