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January 14, 2008 7:25 PM

Newcastle East Liberal Democrat Parliamentary spokesman Greg Stone is supporting calls for the Government to act over the failure of regulation of the financial services sector which led to the collapse of pensions group Equitable Life in 2000.

The Government is to produce a long awaited report into the failure of regulation in the Equitable Life case tomorrow, and it is being reported that an independent tribunal will be established to consider the issue of compensation to affected policyholders.

Greg Stone, who was affected himself as an Equitable Life policyholder, believes that the time is now right for the Government to admit to serious mistakes in the way it oversaw private pension fund operations.

He said: "I know from my own experience and from my constituency postbag that many people in Newcastle feel deeply disgruntled at the way the Government failed to take appropriate action to regulate the pensions sector and permitted the collapse of

Equitable Life.

"More than a million people were affected by this, and the Parliamentary ombudsman has found fault with the Government and recommended establishing an independent compensation scheme.

"A cross-party group of MP's has backed this call and a Government response is long overdue

"The Government was clearly at fault in failing to regulate the sector properly and in its failure to investigate the difficulties at Equitable Life.

"It has sought to prevaricate and delay its admission of responsibility in this matter.

"More broadly, Gordon Brown's period as Chancellor saw responsible people who sought to invest for the retirement penalised by Government tax changes, and savers are now facing serious difficulties due to the economic crisis and fall in interest rates."