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Lord Bassam of Brighton: My Lords, I take careful note of what the noble Lord has said. He speaks with greater knowledge than I on these matters. As I have explained to your Lordships, the powers are there. I am interested in what the noble Lord has said. I shall ensure that I have been properly advised. I am confident that I have been advised wisely. As to the issue, it is absolutely right that we in government and the government agencies play a proper and full part in ensuring that those kinds of scandals do not take place in the future.
Lord Cope of Berkeley: My Lords, will the Minister undertake to draw to the attention of the investigating authorities the deep concern in relation to this matter that has been expressed on all sides of the House and to point out that this is a matter to which the House is likely to return before long?
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for his advice in this matter. I take the comments that have been made seriously. I believe it is a serious matter. We try to fulfil our international obligations as best we can. For that reason we have looked again at issues such as the proceeds of crime. As the noble Lord is well aware, we intend to bring forward draft legislation to deal with those issues early in the new year.
Lord Avebury: My Lords, can the Minister assure the House that legislation on money laundering that, according to the Queen's Speech, is to be brought forward in this Session, will be drawn sufficiently widely so that, if a survey of the powers that he has mentioned has been completed by then, it will be possible to introduce amendments in that Bill?
Lord Bassam of Brighton: My Lords, I thought I had made it plain that it is a draft Bill. Like all other Members of your Lordships' House, the noble Lord will have ample opportunity, through the appropriate channels, to comment on the draft. We shall listen carefully to the comments made by the noble Lord and other Members of the House.
Baroness Williams of Crosby: My Lords, will the Minister take this matter back, given that Nigeria--a country where 70 per cent of the population live on less than a dollar a day--is one of the great friends of Britain and so desperately needs the sums of money involved?
Lord McIntosh of Haringey: My Lords, first I declare an interest in this issue as an Equitable Life policyholder through my additional voluntary contributions to the parliamentary pension scheme, an interest which is shared by all other members of the parliamentary pension scheme and the Civil Service pension scheme.
We have noted the statements from the Financial Services Authority and Equitable Life and welcome the fact that they are working closely together to bring the matter to a satisfactory conclusion to protect the interests of policyholders. The FSA is watching the situation carefully and will not hesitate to step in as necessary.
Lord Newby: My Lords, I suspect that virtually every family represented in this House either has an Equitable Life policyholder within it or knows somebody who has. So this issue deeply touches many people.
Will the Minister accept that deep anxiety exists in relation to the urgency of the current situation? Will the Government not just leave the FSA to take action--though it clearly has the prime responsibility--but also have urgent discussions with that organisation to ensure that it protects Equitable Life policyholders, particularly against the possibility of large numbers of them simultaneously seeking to transfer their policies? Further, will the Treasury, in the light of the problems that have arisen with Equitable Life, undertake to conduct a full review of its plans for stakeholder pensions, particularly in respect of the cap on management fees?
Lord McIntosh of Haringey: My Lords, I made clear that the Government share the concerns rightly expressed by the noble Lord, Lord Newby. However, as he will remember from his participation in the proceedings on the Financial Services and Markets Bill, the Treasury has a contract with the Financial Services Authority to conduct the regulation of the insurance industry. I can assure the noble Lord that the contractual rights of policyholders will be respected. After all, the company is solvent; this is not a question of insolvency.
Lord Merlyn-Rees: My Lords, as another noble Lord who has a personal interest in these matters, I ask my noble friend what it means when he says that the FSA will watch matters. It will watch and do what? How can it intervene, and under what conditions?
Lord McIntosh of Haringey: My Lords, the FSA has a contractual responsibility to protect the interests of policyholders. As I made clear in my first Answer, it will not hesitate to step in if that becomes necessary. However, I should again make clear that existing policyholders' contractual rights are not at risk. They will be protected. Equitable Life has funds of around #30 billion, which are adequate for meeting the contractual rights of existing policyholders but would not have been adequate if the company had continued to take on new business. That is why it closed its doors to new business but is not closing down.
Lord McIntosh of Haringey: My Lords, the noble Earl, Lord Northesk, is good at reminding me of things that I said a long time ago. I am relieved that on this occasion I can confirm that what I said on 22nd June, which I had entirely forgotten, is 100 per cent correct. That does not conflict with the reported view of the FSA spokesman, though I have not seen it myself, that the first recourse of policyholders is to Equitable Life. But that does not mean that there is not recourse to take complaints to the Financial Services Authority if necessary.
Lord Crickhowell: My Lords, I join with others in declaring an interest. Is not the noble Lord a little rash in giving the assurance that he did in relation to the adequacy of funds? Surely that depends on the actuarial assumptions made, particularly in regard to life expectancy. Is it not a fact that there are uncertainties which will continue to cause anxiety and that no absolute commitment can be made?
Lord McIntosh of Haringey: My Lords, the noble Lord, is right in the sense that risk management issues are enormously complicated as are the actuarial considerations that have to be taken into account. But there is no reason to suppose that on any reasonable actuarial assumption Equitable Life will not be able to meet the reasonable expectations of its policyholders. At the same time, I have to say that although those reasonable expectations may have been based on a portfolio held by Equitable Life which consists of a mixture of equities, funds and gilts, the company will inevitably be forced to move further towards a portfolio of bonds and gilts rather than equities. That may reduce the expectations. To that extent, clearly some expectations will be disappointed.
Lord Carter: My Lords, immediately after the speech of the right reverend Prelate the Bishop of Southwark, my noble friend Lord Sainsbury of Turville will, with the leave of the House, repeat a Statement which is being made in another place on the Vauxhall factory closure announcement.
Lord Campbell of Alloway: My Lords, I beg to introduce a Bill to establish the entitlement of each House of Parliament to resolve that a referendum be held on matters substantially affecting the constitution; and to make provision as to the conduct of such referendum; and for connected purposes. I beg to move that this Bill be now read a first time.