HL Deb 13 November 1998 vol 594 cc124-6WA
Lord Sefton of Garston

asked Her Majesty's Government:

Whether they have had any discussions with the Prudential concerning the division of the surplus in the Prudential Pension Fund between shareholders and policy holders; and, if so, what view they have formed of this issue as a result of these discussions. [HL3785]

Lord McIntosh of Haringey

The Prudential announced in 1996 that it was opening discussions with the DTI on the attribution between shareholders and policyholders of the inherited estate in its long term business fund (rather than its pension fund). These discussions are continuing with the Treasury, which took over responsibility for insurance regulation from the DTI in January 1998. The total amount involved was estimated by an official of the Prudential, when the company gave evidence to the Treasury Select Committee on 2 July 1998, to be between £6 billion and £8 billion.

It is the Treasury's policy not to comment publicly on discussions which it may have with companies in its regulatory capacity in the interests of effective regulation and commercial confidentiality. But the previous Government's position on inherited estates was set out in a statement by the then Minister for Corporate Affairs (Mr. Evans) in February 1995, and reaffirmed by the then Economic Secretary to the Treasury (Mrs. Liddell) in a written reply to the honourable Member for Halton (Mr. Derek Twigg) on 24 July 1998 (Official Report, cols. WA 750–752). The Treasury will deal with the Prudential's proposals, and any other proposals for attribution of the inherited estates of life offices in accordance with the principles set out in those statements. The Treasury will place particular emphasis on protecting the interests of policyholders.