Ministers accused over PMS deadlock
ULSTER ministers have been accused of being part of a "pass the parcel exercise" in avoiding responsibility for a solution to the Presbyterian Mutual Society crisis.
The influential Treasury Select Committee (TC) from Westminster came to Belfast for one day to take evidence on the causes of the run which hit the 300m mutual in 2008 - and the desperate plight of its 9,500 plus savers.
Hearing from Enterprise Minister Arlene Foster and Finance Minister Sammy Wilson, the TC pressed them on why the Government's PMS Working Group has not yet completed its draft report, which was due by September. But Minister Wilson said it would be premature given the current advanced efforts to secure a PMS buyer.
Mr Wilson said there had been "some support" from the Treasury for a solution but that the Executive had not been asked for support. The spread of the 100m deficit across the PMS portfolio was delaying negotiations for a solution, he explained.
John McFall, chairman of the TC, noted that Shaun Woodward had said in September that it would be ready in a few weeks.
He called for "political will" between Northern Ireland ministers and Westminster "to fill the gap" in PMS finances, to give assurances to potential buyers and get a solution "rather than what some people would say is a pass the parcel exercise".
But Mr Wilson insisted there was much work going on between ministers and officials in Northern Ireland and Westminster, talking to each other, banks and the administrator.
Mr McFall also attacked the idea that finding a solution was solely down to the PMS administrator. "There is political progress that is required here," he insisted. Ms Foster agreed, adding that the Assembly Executive stands ready to help the administrator "in any way" it can.
Mr McFall chided the ministers over the lack of information getting out to the public, but Mr Wilson responded that they had been meeting with various groups to keep people informed and did not want to harm commercial talks.
The TC pressed Ms Foster at substantial length about "a gap" in the PMS regulation. But Ms Foster said that her department had no legal responsibility to look into PMS affairs. Its responsibility as registrar is only to gather a register of legitimate PMS accounts for public scrutiny, she insisted.
"We are not totally convinced by that Arlene," said Mr McFall. "We think there is a gap, but don't worry."
DETI official Mike Bohill said that it had been incumbent on the PMS to apply to the Financial Services Authority (FSA) to carry out the regulated services they were undertaking.
Mr McFall said there had been "a wall of silence" between DETI and the FSA regarding the PMS, but that this would not have happened in Great Britain, where the FSA alone would have both collected the public register of PMS accounts and actively regulated it.
Ms Foster disagreed, saying the FSA would not have picked up the PMS problems in Great Britain. But Mr McFall flatly rejected her opinion, based on his experience with GB Credit Unions.
“I don’t think that is the case Arlene,” he said, adding that he knows knowledge passes between the FSA’s registrar and regulator departments in Great Britain.
The chairman of the Assembly Enterprise Committee, Alban McGuinness, told the TC that he believed “there was a gap” in terms of regulation for the PMS, which should have been in place. “We want maximum political pressure to bring things to a closure because it is no longer a sustainable situation for many people,” he said.
Former Enterprise Committee chairman Mark Durkan said that banks interested in the PMS “need to know there is real political will and weight” from Government for a solution. He suggested dormant bank accounts could be part of a solution.
A buy over by publicly owned bank with Government financial support was an obvious solution, and such a buy-over was likely at one stage, he said. “People still don’t know why that never happened,” he added.
Mr McGuinness concluded that the PMS was “a fairly attractive proposal” but that “what is needed to get it over the finishing line is for some Government underpinning”.
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Monday 28 May 2012
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