I am shocked but not surprised at this morning's reports about the Treasury botch-up in getting the hard-won compensation into the hands of Equitable Life policyholders. It is a sadly predictible and avoidable shambles and just adds another sorry chapter onto the end of this shameful saga.
This should never have been allowed to happen.
I have never understood why the Treasury had to set up a new scheme for paying compensation when there was a tried and tested mechanisim already up and running - the Financial Services Compensation Scheme. I'm not very fond of saying "I told you so" but on this occasion I will as I did as far back as December 2008 when I wrote that the FSCS could play Equitable Life role.
The Treasury fought the Equitable Life policyholders all the way in their battle for compensation as successive Conservative and Labour governments couldn't bring themselves to admit the government's own negligence in the collapse of Equitable Life and the miselling of guaranteed annuities in particular. Persistent lobbying by policyholders ensured that the newly-elected Coalition moved swiftly in 2010 to agree to pay compensation but they made a huge mistake in leaving it to the by now humiliated Treasury to sort out. I know that the FSCS had a plan prepared in case the task was passed to it.
Let's hope Margaret Hodge and her Public Accounts Committee hold the right people to account over this avoidable farce and manage to inject a sense of urgency and purpose so that all the compensation is in the hands of the people who deserve it within the promised timetable.
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