<< Back to News
Parliamentary Ombudsman dismisses Government plan as “unsafe” and “unsound”
On 27 July 2010 EMAG wrote to all MPs concerning the Parlaimentrary Ombudsman’s robust citicism of the government’s current approach to compensation
The coalition government’s commitment requires implementing the Parliamentary Ombudsman’s recommendations, not Sir John Chadwick’s. That means compensation based on relative loss - confirmed to be circa £4.8 billion.
It is deeply concerning that the government has not rejected Sir John Chadwick’s report outright.
The Ombudsman’s view on Sir John’s report is clear from her letter to MPs of 26th July:
“It seems to me that those [Sir John Chadwick’s] proposals, if acted upon, would not in any sense enable fair and transparent compensation to be delivered.”
“If I understand the Government’s commitment correctly, the approach embodied in the Chadwick report is no longer relevant.”
“…it [the report] misinterprets central parts of the conclusions outlined in my July 2008 report and ignores others.”
“…the Chadwick proposals seem to me to be an unsafe and unsound basis on which to proceed.”
• The previous Labour government did not accept the Ombudsman’s findings and recommendations, instead devising its own system of ex-gratia payments only to those ‘disproportionately affected’. It was on that basis that Sir John Chadwick was commissioned to produce his report.
• The Ombudsman’s core recommendation was that policyholders should be compensated for relative losses arising from the injustices she found. Both Conservative and Liberal Democrat front benches accepted this and campaigned for it prior to the election.
• The figure for relative loss has now been stated by the government as being between £4bn - £4.8bn, substantiated by EMAG the Ombudsman and now by the Treasury’s own actuaries, Towers Watson.
• The proposed figure of £400m-£500m in Sir John Chadwick’s report for compensation is totally at odds with the Ombudsman’s recommendation.
• Justice is about putting right the wrongs of the past, not re-inventing it as the Chadwick report seeks to do by re-trying the Ombudsman’s genuinely independent investigation.
• The coalition government’s commitment requires implementing the Ombudsman’s recommendation, not Sir John Chadwick’s. That means compensation for relative loss.
• EMAG is deeply concerned that the government has not rejected Sir John Chadwick’s report outright. We are also concerned that the terms of reference for the independent payment commission are flawed and include a requirement to ‘have regard to’ his report - a report that has now been roundly condemned by the Ombudsman herself.
• EMAG members are concerned that the government looks set to renege on accepting the Ombudsman’s recommendation on compensation for relative loss. To do so would be a betrayal of the victims of this scandal who have been fighting for a decade for the justice they deserve.
• Public purse considerations of course need to be considered, but any ‘haircut’ should be from an honest estimate of relative loss. It should be comparable, for example, to the reductions in income that ministers have been prepared to accept for themselves.
• EMAG will continue to campaign for fair compensation in the run up to the spending review. It is essential that MPs stand up both for their constituents and for the office of the Ombudsman and discard the Chadwick report to ensure the new coalition government delivers on its promise to implement the Ombudsman’s recommendations.
• You will no doubt be hearing more from your constituency’s Equitable victims over the coming weeks. They’re understandably upset.
<< Back to News