Pegatron: Second Apple Firm Slammed In China

Tech giant Apple is under renewed fire over workers' rights in China, according to a report issued by a human rights charity.

China Labor Watch (CLW) said it has documented violation of work laws, forced excessive overtime and underage employees at Pegatron, where Apple's iPads and iPhones are made.

The abuses are alleged to have taken place at facilities owned by the Taiwan-based manufacturer, which is subcontracted to make Apple gadgets.

New York-based CLW said workers' rights were violated at several of Pegatron's factories in Shanghai and Suzhou.

Apple boss Tim Cook visited a factory after earlier abuse claims in China

The report said many workers were students or teens, with some forced to work standing up for as long as 11 hours.

Up to 12 workers shared cramped dormitories with rudimentary facilities.

"The Pegatron factories are violating a great number of international and Chinese laws and standards as well as the standards of Apple's own social responsibility code of conduct," CLW said in the report.

Pegatron, which has market capitalisation of around £500m, said in a statement that it would investigate the matter and would take immediate action to correct any violations of Chinese labour laws and its own code of conduct.

"We strive to make each day at Pegatron better than the last for our employees. They are the heart of our business," Pegatron's CEO Jason Cheng said in the statement.

Apple supplier Foxconn has admitted using 14-year-old staff members

"That's why we take these allegations very seriously."

Pegatron posted revenues of around £4.2bn for the first quarter of 2013, up 30.9% on the same period last year, due primarily to tablet growth.

Apple, responding to the CLW report, said it had conducted 15 audits at Pegatron facilities since 2007 that covered more than 130,000 workers to ensure safe and fair working conditions throughout its supply chain.

It has been in touch with CLW for several months and has fixed some issues raised by the organisation, Apple said.

"Their latest report contains claims that are new to us and we will investigate them immediately," Apple said.

Staff anger grew so high at one Foxconn plant that a riot broke out

"If our audits find that workers have been underpaid or denied compensation for any time they've worked, we will require that Pegatron reimburse them in full."

CLW said it sent undercover investigators into three Pegatron factories and conducted nearly 200 interviews with workers outside the factories from March to July.

It said it discovered 86 violations at the three factories making Apple products.

Pegatron's factories in China now employ more than 70,000 workers after it stepped up production of Apple's products as part of the US technology giant's plans to diversify its contract manufacturing partners.

Foxconn Technology Group, which has also been criticised by labour groups for poor working conditions, suicide rates and underage staff, now makes most of Apple's top products through its flagship unit, Hon Hai Precision Industry.

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ID Theft Insurer CPP Nears Financial Lifeline

By Mark Kleinman, City Editor

The struggling identity theft insurer CPP is closing in on a deal with its lenders that should secure its future beyond a £1bn-plus mis-selling payout to customers.

Sky News understands that CPP has finalised the details of a refinancing with a quartet of lending banks that will involve the company slashing its borrowings and agreeing to tough restrictions on its business activities for three years.

The agreement could be announced as soon as Tuesday, according to insiders.

An agreement with Barclays, HSBC, Royal Bank of Scotland and Santander UK will come as a relief to hundreds of CPP staff employed at its York headquarters who have faced an uncertain future during on-off talks about a takeover of the group.

CPP's founder, Hamish Ogston, walked away from a bid to take it private last month, but the new borrowing agreement with its banks should secure the company's medium-term future.

CPP, which calls itself an "international life assistance provider", operates across more than a dozen countries and expanded rapidly after listing on the London Stock Exchange in 2010.

It recently sold its US business in an attempt to raise funds following a £10.5m fine imposed by the City regulator last year for mis-selling.

The company sold more than four million policies to customers, many of which were the result of introductions by the major high street banks.

Barclays is expected to bear the scars of its involvement in the scandal when it unveils a sizeable provision for compensation in its half-year results on Tuesday.

The agreement with its lenders will mean that redress for mis-selling can be paid out through a mechanism known as a solvent scheme of arrangement, which comprises a ring-fenced pot of cash for compensation.

Some reports have suggested the total amount could reach £2bn although most observers believe it will be little more than half that sum.

The Financial Conduct Authority is keen for the scheme to get underway as soon as possible, and it is possible that it will launch within weeks depending on final agreement with the banks that will be contributing.

The new borrowing facility is understood to have been cut from the previous £80m to significantly less than half that amount, reflecting CPP's smaller ongoing business. A person familiar with the refinancing said the lenders had also extracted more advantageous fees "although the terms would not be penal (to CPP)".

Under a deal announced earlier this year, an extension to CPP's loans had given the company until September to find a longer-term solution, and this week's announcement is expected to provide it with breathing space until 2016.

CPP is one of several specialist insurers to have fallen foul of regulators in recent times. Homeserve, which provides insurance against household mishaps, was also the subject of mis-selling allegations in 2011.

Concerns about potential exposure to any future evidence of mis-selling at Domestic & General, the warranties supplier, have thrown an obstacle in the way of its sale to a major private equity firm.

A CPP spokesman declined to comment on Monday evening.

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Omnicom Merger With Publicis Creates Ad Giant

Omnicom Group Inc. and Publicis Groupe SA plan to merge to create the world's largest advertising firm.

The new company, will be called Publicis Omnicom Group, will be worth more than $30 billion.

It will be traded in New York and Paris.

Omnicom Chief Executive John Wren and Publicis CEO Levy will jointly lead the new company for the first 30 months, then Mr Levy will become non-executive chairman and Mr Wren CEO.

The new company will have combined sales of nearly $23 billion and 130,000 employees, taking over the current London-based industry leader WPP PLC.

The transaction- presented as a "merger of equals" - brings together Publicis brands such as Saatchi & Saatchi and Leo Burnett with Omnicom's BBDO Worldwide and DDB Worldwide.

"This is a new company for a new world," Mr Levy said.

The combined group will employ 130,000 people

"It will be able to face the exponential development of new internet giants like Facebook and Google, changing consumer behaviour, the explosion of big data, as well as handle the blurring of roles of all the players in the market."

The two veteran CEOs chose the neutral territory of the Netherlands for the new holding company.

The move is aimed at bolstering the companies' focus on growing Asian and Latin American markets such as China and Brazil to offset weak growth in European markets.

However, the decrease in competition could present regulatory hurdles in the US and Europe.

Client conflicts also could be an issue, as rivals such as Coca-Cola Co., PepsiCo, McDonald's, Yum Brands' Taco Bell, Johnson & Johnson and Procter & Gamble now find themselves under the same umbrella.

The new group will have to get antitrust clearance from authorities in around 45 countries.

"We've looked at the antitrust issues very carefully and are not expecting anything that would prevent us from going forward," said Mr Wren.

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Energy Watchdog 'Failing Consumers', Say MPs

By Tadhg Enright, Business Reporter

The energy watchdog, Ofgem, is failing consumers and undermining trust in the market, a group of MPs have said - urging it to "use its teeth a bit more".

A report by the Energy and Climate Change Select Committee has said there is a "lack of transparency" about profits made by the Big Six energy providers.

Committee member and Lib Dem MP Sir Robert Smith said: "At a time when many people are struggling with the rising costs of energy, consumers need reassurance that the profits being made by the Big Six are not excessive.

"Unfortunately, the complex vertically integrated structure of these companies means that working out exactly how their profits are made requires forensic accountants."

Labour MP John Robertson added: "Ofgem needs to use its teeth a bit more and force the energy companies to do everything they can to prove that they are squeaky clean when it comes to making and reporting their profits."

There has been long standing criticism of the UK energy market in which six major competitors show little evidence of competing with each other on price.

Rising prices for consumers in recent years has been blamed on higher wholesale prices for energy providers however the Committee notes in its report that many of Britain's major providers are generators of energy and therefore profit from higher wholesale prices too.

The Big Six have also been criticised for offering a confusing range of tariffs which give the impression of greater consumer choice but offer little in the way of discounts.

British Gas and EDF customer Mary Phillips told Sky News that in the winter she frequently has to choose between spending on food or fuel, and that competition in the energy market has done nothing to help.

She said: "I keep getting notes from all these different energy companies saying that they're making their bills much easier to understand. You're joking!

"Every single different supplier says that they're going to give me a much better deal than all the other suppliers. I don't believe it really. I think they might do it for about three months and then it will all go up suddenly."

As the industry's watchdog, Ofgem has the power to order an inquiry into competition in the energy market but has chosen not to do so.  Instead it hopes that the threat of such a forensic analysis of the Big Six's energy practices will encourage them to clean up their acts.

Ofgem's Rachel Fletcher said: "We share the committee's goal of restoring consumers' trust.

"We agree with the committee that suppliers have been poor at communicating with their customers.

"Ofgem has made energy companies produce yearly financial statements, which have been reviewed twice by independent accountants and found to be fit for purpose."

The report also criticises the Government for not doing enough to help millions of low-income families living in poorly insulated homes and who struggle with fuel poverty.

The MPs argue that programmes to help protect the most vulnerable should be funded through direct taxation rather than levies on the bills of those who can afford it.

Sir Robert said: "Fuel poverty is getting worse as energy prices rise making it all the more critical that the Government must respond to the Hills Review as a matter of urgency.

"Tax-funded public spending is a less regressive mechanism than levies on energy bills, which can hit some of the poorest hardest. Shifting the emphasis from levies to taxation would help protect vulnerable households."

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Barclays Faces Fresh Customer Mis-Selling Bill

By Mark Kleinman, City Editor

Barclays will face up to mis-selling misdemeanours on three fronts next week when it sets aside hundreds of millions of pounds more for historical malpractice.

Sky News understands that the bank will make provisions for compensation for customers who were mis-sold payment protection insurance (PPI), interest rate derivatives and identity theft cover through the stricken credit card insurer CPP.

Insiders said this weekend that Barclays chief executive Antony Jenkins had been told by its regulators to be "conservative" in topping up its previous £2.6bn provision for PPI and an £850m bill for mis-selling swap products - designed to insure customers against sharp interest rate movements - to small businesses.

Barclays directors are also understood to have discussed taking its first hit for compensating CPP customers at a board meeting this week.

The final bill will be signed off by Mr Jenkins, Sir David Walker, the bank's chairman, and the soon-to-depart finance director Chris Lucas on Monday.

A Barclays spokesman declined to comment on the size of the new compensation figures but it is understood that they will take the amount it has set aside for swaps mis-selling to well over £1bn.

The scale of the new provisions will partly explain why Barclays is also planning to announce a major capital-raising comprising conventional shares and contingent convertible (or 'coco') bonds alongside its results.

That follows pressure from the Prudential Regulation Authority for Barclays to meet a target measuring the strength of its balance sheet, called the leverage ratio, by the end of next year.

The announcement will be made as part of Barclays' half-year results on Tuesday, and could undermine Mr Jenkins' efforts to overhaul the bank's reputation following last summer's Libor rate-rigging scandal.

Barclays was fined £290m for its role in the affair, leading to the departure of Mr Jenkins' predecessor, Bob Diamond.

It was also recently hit with a £300m penalty by a US energy regulator for attempting to manipulate electricity prices, although the bank is appealing against it.

Barclays will not be the only lender to add to its PPI mis-selling provisions during next week's results, with Lloyds Banking Group and others also expected to belie suggestions that the tidal wave of compensation claims had abated.

Barclays has, though, been particularly affected by the way interest is calculated on PPI compensation claims because of its liabilities dating back many years.

Mr Jenkins will also spell out the progress of his overhaul of the bank, called Transform, in which he will say that Barclays is exceeding cost-reduction targets announced in February.

Barclays declined to comment.

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£2bn Lloyds Profit Triggers Stake Sale Talks

By Mark Kleinman, City Editor

The agency which manages taxpayers' £19bn stake in Lloyds Banking Group is expected to hold talks with City investors this week about a quick-fire sale of shares as Britain's biggest high street lender unveils a £2bn half-year profit.

Sky News understands that UK Financial Investments (UKFI) and the Treasury will discuss in the coming days the prospect of an accelerated placing of shares in Lloyds with major institutional investors on or around the day that Lloyds announces half-year results on Thursday.

Treasury sources said that the results would show a "stellar" first-half performance from the bank, which owns the Halifax brand and is in the process of spinning TSB off into a separately-listed company.

Lloyds, they said, would report a statutory profit of approximately £2bn - in line with the consensus forecast of analysts - and also provide further positive news in the form of better-than-expected cost reductions and a stronger-than-anticipated capital position.

The move into the black would contrast with a loss of more than £400m at the half-year stage in 2012.

"The stars are aligned for us to start selling shares now," said one Whitehall insider.

The Government is understood to believe that it has a window of a few days beginning on the day of Lloyds' results to place a chunk of stock before the markets slow down too far for the summer to make such a substantial transaction more difficult.

Lord Davies is assembling a consortium keen to buy part of Lloyds

If the discussions do not point to sufficient demand for an institutional placing of shares, the Government would postpone any attempt to begin selling its 39% stake in the bank until September at the earliest.

A Treasury spokesman said that no timetable for the sale of shares had been set and refused to comment on the prospect of a sale next week.

Earlier this month, UKFI hired JP Morgan Cazenove, the investment bank, to advise on its privatisation strategy for Lloyds and Royal Bank of Scotland, in which taxpayers hold an 82% stake.

The agency also appointed a roster of other banks to execute deals in the capital markets to sell down the shares in the two banks during the coming years.

One banker said on Saturday that a report suggesting that Lloyds was priming City investors for a sale was inaccurate, arguing that the deal would be orchestrated by UKFI rather than the bank itself.

The source added that it would be theoretically possible to brief a group of investors the night before the results announcement - making them insiders unable to trade in Lloyds shares - with the objective of announcing a deal alongside on Thursday.

Sky News revealed earlier this month that Lord Davies, the former trade minister, was assembling a consortium of investors keen to buy at least half of the Government's stake in Lloyds.

The half-year results are expected to include a modest new provision for payment protection insurance mis-selling, taking Lloyds' total bill so far to more than £7bn, one insider said.

However, unlike Barclays, the bank is not expected to have to set aside money to compensate small businesses for mis-selling interest rate swaps or customers of CPP, the identity theft insurer.

On Friday, Lloyds shares closed at 68.37p, which if sustained until after next week's results announcement would make a placing at or above 61p viable, banking sources said. Such a deal would be likely to take place at a discount to the prevailing share price.

The 61p figure is significant because Lloyds said in March that it had been notified by the Treasury that that was the average price at which taxpayers' support for Lloyds during the banking crisis had been recorded in the public finances.

Selling above that price would be significant for George Osborne, the Chancellor, because it would allow him to hail the return of funds injected by taxpayers into Lloyds after its initially disastrous merger with HBOS.

It would also be potentially meaningful for Antonio Horta-Osorio, Lloyds' chief executive, whose £1.48m deferred share bonus awarded in March will only vest under certain conditions, one of which is that at least one-third of the Government's shareholding is sold for at least 61p-per-share.

Lloyds declined to comment on Saturday.

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Welby Defends Wonga After Church Link Emerges

The Archbishop of Canterbury has insisted he was not picking on Wonga after it emerged the Church of England invests in the payday loan firm.

The Most Reverend Justin Welby admitted being "irritated" and "embarrassed" by the revelation but went on to heap praise on Wonga and its management.

Mr Welby hailed the company for its professionalism and suggested it was far from the worst organisation in the loan sector.

The link between the Church and the firm emerged hours after the Archbishop said he wanted to force Wonga out of business by expanding credit unions.

The Financial Times found the Church's pension fund had put money into Accel Partners, a US venture capital firm that led Wonga's 2009 fund-raising efforts.

Until the report emerged, Mr Welby had no idea about the connection.

Sources suggested he was "furious" but on Friday, in a lengthy interview, he merely said: "I was irritated for a few minutes but, you know, these things happen."

Justin Welby: 'It's very embarrassing'

He did admit the affair was "very embarrassing" and vowed to investigate, signalling there could be a review of the Church's entire investment portfolio.

But he said: "I never took on Wonga in particular. The context was talking about the entire payday lender movement.

"Wonga is actually a very professionally managed company. Errol Damelin, the chief executive is a very clever man, [who] runs it extremely well."

Despite praising the company, he said he was still unhappy about the Church's investment.

"They shouldn't be investing in Wonga. We don't think that's a good thing," he told the BBC's Radio 4 Today programme.

And he insisted he was not backtracking on his commitment to clamp down on the industry, which is currently the subject of a Competition Commission probe.

"We need to provide a proper alternative to these very, very costly forms of finance. The worst people are not Wonga. There are plenty of others much worse," he said.

Mr Welby said Church policy allows investments in a company where 25% of its business is in the loan area, indicating the arrangement with Wonga may be against its rules.

"I think we have to review these levels and make sure we are consistent between what we're saying and what we're doing," he said.

The Archbishop conceded that it was almost impossible for the Church to make an investment that was not somehow tainted.

He said: "If you exclude any contact with anything that directly or indirectly gets in any way bad, you can't do anything at all."

Lambeth Palace has said it will ask the Assets Committee of the Church Commissioners to investigate the link to Wonga and review the holding.

It added: "We will also be requesting the Church Commissioners to investigate whether there are any other inconsistencies as normally all investment policies are reviewed by the Ethical Investment Advisory Group (EIAG)."

Mr Welby is seeking to expand the reach of credit unions as part of a long-term campaign to boost competition in the banking sector and clamp down on short-term loan firms.

The Government announced an investment of £38m in credit unions in April to help them offer an alternative option to payday lenders.

The Office of Fair Trading referred the entire payday lending industry, which is worth £2bn, to the Competition Commission last month after finding "deep-rooted" problems.

It said it decided to make the referral because it continues to suspect that features of the market "prevent, restrict or distort competition".

Wonga said in March that it welcomed any attempt to encourage responsible lending and that it has been "instrumental" in helping to raise industry standards.

Mr Damelin, its founder, said: "The Archbishop is clearly an exceptional individual and someone who understands the power of innovation.

"There is mutual respect, some differing opinions and a meeting of minds on many big issues.

"On the competition point, we always welcome fresh approaches that give people a fuller set of alternatives to solve their financial challenges. I'm all for better consumer choice."

The company has launched a new advertising campaign setting out "ten commitments" about its lending practices in an apparent tongue-in-cheek reaction to the Archbishop's original remarks.

Mayor of London Boris Johnson backed the Archbishop's plans and said it was an "interesting interpretation of the gospels".

He told Channel 4 News: "I think it's a wonderful idea.

"Wonga is a perfectly legitimate business but there's no doubt their rates are usurious. There are people who find it very, very difficult to repay the loans once they get into trouble.

"He's not turning over the tables of the money lenders, he's bringing in his own money lending tables."

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Royal Baby: George Gives UK Business Boost

By Emma Birchley, Sky News Correspondent

The UK's newest Prince might be less than a week old but he is already proving to be a trendsetter as aspiring parents race to keep up with the Cambridges.

Sales of Britax Baby Safe seats have trebled at Kiddicare superstores since the newborn set off in one on his first car journey after leaving St Mary's Hospital on Tuesday.

And there has been a surge in orders of the £45 hand-finished merino wool shawl made by GH Hurt and Son in Nottingham that Prince George of Cambridge was wrapped in for his first photo shoot.

Alex Fisher, commercial director at Kiddicare, said: "I think it's fabulous news in terms of parents engaging with the fact there is a Royal baby.

"I think it will encourage people to renew and buy new products.

"Parents look at what is the latest product, who is the latest celebrity, and I think on the back of that the seat by default becomes aspirational."

There was so much interest in the dress worn by the Duchess of Cambridge that the designer's website crashed earlier in the week.

But it later emerged that the Jenny Packham design was a one-off and not for sale.

The royal seal of approval has been a blessing for some companies

The Centre for Retail Research predicts the new arrival will end up boosting the UK economy by close to £250 million.

That includes everything from the champagne sipped to help celebrate the baby's safe arrival to commemorative mugs.

And Richard Cope, director of trends at market researchers Mintel, believes spending inspired by the young Prince will be sustained by visitors to the UK.

"Tourist numbers are up by about 10% compared with a year ago. They're going to be here throughout the summer and they buy into the concept of the Royal Family.

"The tourist factor is going to drag out spending for months and months."

But it is not just retailers enjoying the Royal feelgood factor.

William and Kate's chosen charities are already benefiting, including East Anglia's Children's Hospices (EACH), of which the Duchess is patron.

Melanie Chew, fundraising director of EACH, said: "The donations are coming in from the UK, but overseas as well.

"We have had all kinds of generous offers from an ornate handmade cradle from Poland, we've had children's bedroom furniture from Slovenia and we have a charm bracelet on its way, so it's been terrific."

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Wonga Ad Delivers Riposte To Archbishop

By Mark Kleinman, City Editor

The payday lending group Wonga will on Friday attempt to begin changing public perceptions of its business model following a vow by the Archbishop of Canterbury to "compete it out of existence".

Sky News has seen a copy of an advertisement that Wonga will place in a number of national newspapers, in which the company will set out 'ten commitments' about its lending practices.

Among the pledges to be made by the payday lender are that it welcomes competition, would "always help customers in financial difficulty" and that it would never charge interest at an annual percentage rate running into the thousands.

The description of Wonga's manifesto as its 'ten commitments' is understood to be a tongue-in-cheek riposte to the Archbishop but follows a bruising period for Wonga and the wider industry. 

Last month, the sector was referred to the Competition Commission amid political anger about the activities of some short-term lenders.

The row was stoked on Thursday when comments made by Justin Welby, the Archbishop of Canterbury, were published in the magazine Total Politics.

Referring to a meeting that he had held with Errol Damelin, the chief executive of Wonga, several weeks ago, Dr Welby said:

"We had a very good conversation and I said to him quite bluntly 'we're not in the business of trying to legislate you out of existence, we're trying to compete you out of existence'. He's a businessman, he took that well."

The Archbishop was referring to the emerging credit union movement, a form of financial co-operative which lends money at comparatively low rates.

However, the Church of England faced being embarrassed by the debate on Thursday night when it emerged that its pension fund was an investor in one of the funds that helped to establish Wonga in the UK.

Wonga has sought to counter mounting criticism by pointing out that it only lends money to consumers who have been subjected to credit-checks, and that customers can repay loans early with no additional charge.

In remarks to be published on its website on Friday, Wonga is expected to say: "Since 2007 Wonga has responsibly lent over £2bn and we now have over a million customers.

"We've done that despite declining three quarters of all first loan applications and ensuring a principal default rate (money lent that we don't get back) of around 7%. This is comparable to other forms of short-term credit, such as credit cards.

"We work hard to lend only to the people who can pay us back, and our mainstream services for individuals and businesses are now available across three continents."

Wonga has also been caught up in a row over the refusal of Papiss Cisse, the Newcastle United striker and practising Muslim, to wear a shirt bearing the name of the payday lender, which is the club's sponsor. He has now agreed to do so, Newcastle announced on Thursday.

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Equitable Life Victims' Compensation At Risk

More than 200,000 victims of the collapse of Equitable Life may miss out on compensation payments because of failings in a Government scheme, a scathing report by MPs has warned.

The House of Commons Public Accounts Committee accused the Treasury of adopting an "arbitrary" target of March 2014 to close the compensation scheme.

The Westminster spending watchdog urged the Treasury to take urgent action to track down as many former policyholders of the failed insurer as possible before the deadline passes.

"It is completely unacceptable that more than 10 years after the collapse of Equitable Life so many victims still have not received the compensation they are entitled to," Committee chairwoman Margaret Hodge said.

"Hundreds of thousands of conscientious savers are losing out because of the Treasury's failure to get a grip on the payment scheme."

Mrs Hodge also said she was "stunned" to learn that the Treasury destroyed details and addresses of 353,000 policyholders on data protection grounds.

After a decade-long battle by Equitable savers, the Treasury announced shortly after the coalition Government took office in 2010 that it would compensate up to 1.5 million policyholders.

Mrs Hodge slammed the compensation scheme

Chancellor George Osborne capped total payments at £1.5bn in his spending review later that year.

But the report found that the Government "failed to learn the lessons" from previous schemes, such as those for former miners and Icelandic trawlermen.

The Treasury focused on an arbitrary deadline of June 2011 for making the first payments, at the expense of planning properly for how the scheme would be administered, said the report.

A "lack of good planning" led to "unacceptable delays" in payments, with only £168m paid out by March 2012, rather than the expected £500m.

By the end of March this year, some £577m had been paid out to 407,000 policyholders, with a further 664,200 payments totalling £370m due to be made by the time the scheme winds up in March 2014.

But the Treasury estimates that it may not be able to trace some 17%-20% of policyholders - between 200,000 and 236,000 people eligible for payments - by that date.

And ministers are not planning to publicise the closure of the scheme until September, which provides little time for applications to be submitted by these savers, many of whom are elderly.

Urging ministers and the government agency National Savings & Investment (NS&I) to bring forward the publicity campaign, the cross-party committee said it was "concerned" that some policyholders will miss out.

"With less than a year to go before the scheme closes in March 2014, the Treasury still has 664,200 payments worth £370m left to make," Mrs Hodge said.

"Unless the Treasury and its administrator, NS&I, get their act together there is a real risk that large numbers of policyholders will miss out."

A Treasury source said: "While Labour did absolutely nothing about the Equitable Life scandal for a decade, this Government has allocated up to £1.5bn to help people who suffered a great injustice, with tens of thousands of policy holders receiving around £700m in payments since 2011.

"We make no apology for starting to get payments out the door a year after the Coalition was formed.

"We do not agree that the Government has failed to get a grip on the planning or delivery of this important work.

"We continue to monitor the progress of the Equitable Life Payment Scheme very closely and are working hard to maximise the numbers of people who will eventually receive payments.

"Instead of scaremongering, the Labour chairman of this committee should explain why her party shamefully did absolutely nothing about this scandal for a decade."

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