Equitable Life report is now a serious political threat to the government

This report, issued under exceptional powers given to the Ombudsman to use when its recommendations are ignored, its a ticking political timebomb. We know that there are MPs and Peers from all parties who are 100% on the side of the Equitable Life policyholders who lost out because of the failings of government departments and regulators and that they are already fuming over the government's callous treatment of their constituents. Because of this all party backing, this report will almost certainly be debated on the floor of the House at some stage and, if the policyholders' supporters can force a vote on the issue there is a very good chance the government will be defeated. Coming so soon after the Gurkha vote, the farce over MPs' expenses and the probable rebellion and possible defeat on Royal Mail privatisation, this would be a devastating blow to Gordon Brown. Depending on the timing and the extent of Labour's trouncing in the local and European elections at the beginning of June it could even contribute to the termination of his premiership. The stakes are high.

What this means is that there is a real chance - despite the government's limp and dismissive response this morning - of getting justice for the Equitable Life policyholders before too many more of them die. The government may feel that it needs to defuse this timebomb and might be persuaded to put some hard cash on the table now. If it does, I hope that a fast track method of getting it in the right hands can be devised. I still think the vehicle for handling this is there in the form of the Financial Services Compensation Scheme and its stock is currently very high with MPs after the Treasury Select Committee sang its praises in its latest report.