A £10bn hope for Equitable

A MILLION Equitable Life policyholders could share up to £10bn in compensation if a probe by the Parliamentary Ombudsman proves the government adopted a 'light touch' in regulating the disgraced society.

Ombudsman Ann Abraham has published the terms of reference for her upcoming investigation into the Equitable affair. Government bodies including HM Treasury and the Financial Services Authority stand accused of 10 years of 'maladministration'.

Abraham's document includes a 'summary of complaint' which suggests key departments, including the Government's Actuary Department, 'failed for considerably longer than a decade to exercise their regulatory functions' in respect of Equitable.

It was drawn up with the help of the four leading Equitable action groups, which will submit specific complaints to Abraham through their MPs.

Paul Weir, of the Equitable Late Contributors group, said: 'The Ombudsman's summary is a damning litany of failure by the regulators.' A decision from Abraham is expected by the end of 2005.