In the past week Liam Byrne has said "First, I do not believe the government should be the compensator of last resort when there has been regulatory failure; and secondly, I simply do now think that it would be rational or a good use of public money to provide compensation when there have been conclusions that we simply do not accept.
"I do not subscribe to the [parliamentary] ombudsman's view, put forward on January 23, that it would be better to accept all the recommendations and then do nothing to provide any compensation at all.
"It is important that an ex gratia scheme be set up, because there is injustice that we recognise. We must now ensure that public money goes to where it is most needed, and that is why we must understand, first, who has lost what."
The Equitable Members Action Group (EMAG), which represents around 21,000 policyholders, has begun a High Court challenge of HM Treasury's decision not to compensate all affected policyholders.