Financial secretary Mark Hoban has pointed the finger of blame at the Labour government for the scale of payments owed to Equitable Life policyholders following the insurer's near collapse 10 years ago.
Speaking during the second reading of the Equitable Life Payment Bill yesterday afternoon, Hoban said more progress had been made in solving the Equitable problem under the coalition government "than in the last decade".
The bill passed the second reading without formal opposition.
Conservative MP Julian Lewis said a number of coalition MPs had pledged to get justice for policyholders, and said it would be "dishonourable" to accept the Chadwick report's controversial recommendations.
The Chadwick report said policyholders should get only a tenth of the lost amount in compensation, or as little as £400m.
Hoban said even Parliamentary Ombudsman Ann Abraham, who recommended total payment of £4.8bn, felt the government should "consider the public purse" before settling on a figure.
The financial secretary went on to say: "The bill for the taxpayer would be much less if the last government had dealt with Equitable Life earlier."
There were hints of further disagreement between Hoban and Abraham. In response to opposition questions, Hoban would not reveal the content of a conversation with Abraham yesterday, saying: "I cannot tell the House the outcomes of a private conversation, but she reiterated the points of her research."
Shadow financial secretary Stephen Timms criticised the coalition for failing to make any firm decisions on payment yet. The coalition, he said, "is not going to deliver".
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