The Government has refused to consider extending the £1.5billion compensation scheme for Equitable Life policyholders but is to be taken to a Commons vote on the issue.
After a three-hour debate yesterday, with several Scottish MPs among the speakers, economic secretary Andrea Newsom rejected the call from the all-party parliamentary group on the issue, of which she was previously a member.
She noted in passing that Ernst & Young had been fined £500,000 with £2.4m costs in 2010 and reprimanded by the profession's tribunal for its role in the insurer's collapse in 2000.
MPs are asking the government to revisit the decision in 2010 which saw the Treasury agree to pay out only £1.5bn of a total losses of £4.3bn incurred by policyholders, due to the public finances, after the parliamentary ombudsman found the government guilty of maladministration.
Stephen Timms, shadow pensions minister, said Labour had "not agreed" that the ombudsman's report vindicated the 10-year campaign for redress, and said it was coalition MPs who had failed to deliver on their pledge.
Ms Newsom said there were "no plans" to top up the scheme. Tory MP Bob Blackman, who secured the debate, said it was "a debt of honour" and the campaign would continue.
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