Equitable Life victims facing decision on compensation

Victims of the Equitable Life scandal are making a last-ditch bid to secure what they regard as fair compensation.

A decision about how much the 1.5 million policyholders of the failed insurer will get is due on October 20 when the Government unveils its spending review.

They may have to share just £400 million, less than half what they were earlier promised by the Tories and a mere sliver of the £5 billion they think they are owed.

The Equitable Members Action Group is sending proposals to ministers today, fighting its case.

The company's board is also writing to the Treasury with its own submission.

Equitable's chief executive Chris Wiscarson said: "It can't be right that policyholders are subject to a 90% haircut."

The compensation dispute has been going on for about 10 years.

Policyholders argue that the failure to properly police the insurer means the Government should cover the losses.

Others say it is wrong to ask taxpayers to compensate often quite wealthy people for making a bad investment choice.

Sir John Chadwick, a former High Court judge, was asked by the Labour Government to devise a limited compensation scheme which would benefit only those worst affected by Equitable's failure in 2000.