Equitable Life: Penrose Inquiry (Hansard, 10 July 2003)

§ Lord McIntosh of Haringey
My Lords, Lord Penrose has said that he intends to report to Treasury Ministers later this summer. The report will he published as soon as reasonably practicable after it has been received.

§ Lord Higgins
My Lords, as the Treasury was responsible for regulating Equitable Life, is it wrong for the inquiry to be set up by the Treasury, with terms of reference determined by the Treasury, with reports being made back to the Treasury and with the Treasury deciding what to do about it? The inquiry was set up in August 2001 and it was expected to report last year. It is still stuck in the long grass. When will we have a firm date for the report? Can the Minister tell the House?
More specifically, does the Minister recall that the Economic Secretary to the Treasury, speaking on the -Money Box" programme, said that if any former Equitable Life director was not prepared to co-operate with the inquiry, the inquiry would be put on a statutory basis. Have any witnesses refused to co-operate and is that still the Government's position?

§ Lord McIntosh of Haringey
My Lords, the noble Lord, Lord Higgins, is running in two opposite directions. On the one hand he says that the report is too much controlled by the Treasury and, on the other hand. he complains that we have not speeded up the report. The report is independent. It is being 474 conducted by a Scottish judge. He has complete freedom on how he conducts his inquiry. Incidentally, he is still being paid as a Scottish judge; he is not being paid by the Treasury. The Treasury has no influence on when he produces his report. As to the issue of refusals to participate, it is not my understanding that there have been more than occasional refusals to participate and I am told that those refusals are not critical to the report.

§ Lord Razzall
My Lords, does the Minister accept that, while the House recognises that the report is not formally a Treasury report, the Government have taken a significant interest in the developments in Equitable Life if for no other reason than the fact that most Members of the House of Commons had their pensions with Equitable Life? Does he accept that the delay in publishing the report is damaging to the interests of policy holders who may have lost money and to directors who have co-operated with the inquiry and who have the threat of litigation, both actual and potential, hanging over them? Does he take the view that Her Majesty's Government should do anything that they can to speed up the inquiry?

§ Lord McIntosh of Haringey
My Lords, I certainly agree that it is the Treasury's job to keep abreast of the situation. Indeed, the Ombudsman, in her report published recently, says specifically that the Treasury kept abreast of the developing Equitable Life situation and had regular discussions with the FSA. In other words, life goes on despite the fact that Lord Penrose is still producing his report. Once we set up an independent inquiry, and once it has been given the very wide terms of reference that it has, it is for Lord Penrose to decide when he feels able to produce a report with which he is content; it is not for us to chase him.

§ Lord Clinton-Davis
My Lords, does my noble friend agree that what he has outlined has been the policy of successive governments, certainly since the 1970s, when I had that responsibility? It is entirely wrong for any suggestion to emanate anywhere in the House that Lord Penrose or anyone in such a situation should be influenced by the government of the day.

§ Lord McIntosh of Haringey
My Lords, I entirely agree. Imagine the reaction if the Treasury had said to Lord Penrose, "Come on, this has taken long enough; produce your report now", and he had produced a report that was, let us say, critical of some players in Equitable Life. Would they not then say that the report did not have credibility and would they not protect themselves on the grounds that the report had been rushed forward by the Treasury?

§ Baroness Oppenheim-Barnes
My Lords, would it not be more sensible and compassionate to employ someone full-time to produce the report, to reach conclusions and to make recommendations before more people lose future pensions in other pension schemes and in the Equitable Life scheme?

§ Lord McIntosh of Haringey
My Lords, when I said that Lord Penrose was being paid as a Scottish judge I did not say that he was acting as a Scottish judge. He is, and has been from the beginning, full-time on the inquiry and he has a very substantial staff working for him.

§ Lord Skelmersdale
My Lords, I am glad that the Minister spoke of the Ombudsman's report on this subject, which presumably, like me, he has read. Will he undertake to investigate the Ombudsman's comment that the FSA was under such a lax regulatory regime, under instructions by the Treasury?

§ Lord McIntosh of Haringey
My Lords, the Ombudsman is entirely independent of the Treasury and we are not responsible for anything in her report. I have read only the summary and conclusions. The report is 100 pages long and I congratulate the noble Lord, Lord Skelmersdale, on having read every word of it. I do not recognise the quotation that he appears to be giving the House, but I shall look into the matter and see whether a response is necessary. It did not seem to me that the Ombudsman's report, as a whole, focused significant criticism either on the FSA or on the Treasury.