There’s already something called the cross-ministerial manufacturing group and fat good that’s ever done anyone
There’s already something called the cross-ministerial manufacturing group, and fat good that’s ever done anyone.In fairness, the report is not entirely filled with platitudes and sweet nothings. One helpful observation is that industry is changing as more manufacturing companies transform themselves into service providers which, in turn, means the official figures almost certainly under-represent manufacturing’s contribution to national wealth.Another is that there are no bad manufacturing sectors, only bad manufacturing companies. This may seem like a statement of the obvious, but it needs saying none the less. Those who are at the bottom of the heap will probably be deaf to the panel’s exhortations, while those at the top do not need them.Outlook independent.co.uk. Sir Howard Davies, chairman of the Financial Services Authority, has been quick to distance the regulator from responsibility for the crisis that has engulfed Equitable Life.
Sir Howard Davies, chairman of the Financial Services Authority, has been quick to distance the regulator from responsibility for the crisis that has engulfed Equitable Life.
Although the FSA cannot legally be held liable for negligence, the best chance policyholders have of getting redress is to find enough evidence that regulators failed in their duty to shame the Government into paying compensation.That was what happened in the Barlow Clowes affair, which ended in 1989 with the Department of Trade and Industry forking out £153m in compensation after an inquiry found the DTI failed to “demonstrate … the characteristics of a competent regulatory authority”.Equitable policyholders are a formidable bunch. They include barristers, high court judges and senior executives with a clutch of FTSE 100 companies, who are now asking why regulators did not step in earlier to deal with a problem that everyone knew about before it spiralled out of control. They are angry at having to pick up the tab for a black hole, nearly five times the size of the one that brought down Barings, the investment bank, in 1995, a hole that Equitable Life’s board, with the full support of the FSA, claimed repeatedly did not exist.For years, rivals pressed regulators to do something about the fact that by industry standards, Equitable was hugely underprovisioned.
They claimed that had it accounted for its liabilities to pensioners with guaranteed annuity policies in the same way as other life offices, it would have been technically insolvent. But the FSA and the DTI apparently believed that Equitable was different from the rest of the industry and could operate under different rules.Other life companies held back some of the investment profits earned during the bull market to create billions of pounds of reserves. But Equitable boasted that every penny earned went to policyholders in bonuses. The result: while other life companies now have inherited estates to cushion other policyholders from the guaranteed annuity hit, following a landmark House of Lord’s decision in July, Equitable was forced to put itself up for sale.Last Friday after the last bidder, the Prudential, pulled out of talks, Alan Nash, the managing director, quit and the firm closed to new business.
