The report out this morning says that the taxpayer will have to pick up the pieces after the faailure of the regulatory system.
For the record,more than a million policyholders lost an estimated £4b.
The Chancellor will not respond until the autumn but comments from that the case showed some similarities to Northern Rock will set alarms bells ringing in the Treasury.To be fair to the government the report shows that this misdemenours also pre date 1997 and in some cases back to 1982.
The 2,800 page report prepared by the parliamentary ombudsman Ann Abrahams
found evidence of "serial regulatory failure" by the government departments and watchdogs that were supposed to be protecting the insurer's customers. She identified 10 instances of maladministration in the period leading up to December 2001, called on the government to apologise to policyholders for the "injustice" they had suffered and recommended that ministers set up a compensation scheme
John Redwood is quick off the mark in calling for the government to intervene,noting that
When I was the regulatory Minister for Insurance and much of the City in the days when that post was held in the DTI, I received reports on the failure of Barlow Clowes. As soon as I read them I saw how people had suffered, and did not hesitate to compensate once regulatory failure had been established.
I want this government to do the same in this case. Many MPs have been pressing this cause with the government on behalf of constituents. Now the Ombudsman is so strong and clear, what further excuse could there be for delay?
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