§ Ms LynneTo ask the Chancellor of the Exchequer (1) what plans his Department has to ensure that former small investors of the investment company run by Barlow Clowes are fully compensated for losses caused by fraudulent activity; [18324]
(2) for what reasons the compensation package offered to former small investors of the investment company run by Barlow Clowes was limited to 90 per cent. of losses. [18380]
§ Mrs. Angela Knight[holding answer 5 March 1996]: On 19 December 1989, the Government announced their decision to offer substantial payments, without admission of fault or liability, to investors who suffered loss as a result of the Barlow Clowes collapse.
In determining the levels of the ex-gratia payments, the Government considered it important to maintain the principle of co-insurance. Investors must be expected to have some responsibility for their own decisions and, therefore, bear some of the loss themselves. The payments made by the Government provided for the early relief of hardship caused to large numbers of investors. It also ensured swifter relief than would have been the case had investors pursued their interests through the courts.