Report hits out over PMS 'farce'
A WESTMINSTER committee has lashed the Stormont Executive and UK Government's non-action on the Presbyterian Mutual Society crisis as "unacceptable and farcical".
The House of Commons Treasury Committee visited Belfast some weeks ago to take evidence from savers, clergy, professionals and politicians about the plight of PMS members.
The 300m society collapsed some 15 months ago and last week the High Court gave a devastating verdict that those with under 20,000 in the mutual are not entitled to any money until larger savers are paid back.
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Committee puts plight of savers first
The Treasury Committee report, published today, anticipated this outcome and railed against the Government and Stormont Executive for their "failure" to help savers.
Chairman Committee John McFall said: "It is possible that, in due time, the affairs of the Presbyterian Mutual Society will be unravelled.
"However, many members cannot wait this long for their money. We heard from some who urgently need funds for medical treatment, some who quite rightly want to enjoy their retirement before it's too late and others who are struggling simply to meet the necessities of daily life in the current economic climate.
"We do not believe that, as a general rule, the taxpayer should stand behind an financial institution. However, it is clear in the case of the PMS there was a fatal regulatory gap, which no lay person could reasonably have identified.
"The Ministerial Working Group must report swiftly to ensure that PMS members do not suffer unduly. We are not prescriptive about what solution is best; it is, however, clear that a remedy must be found."
Gordon Brown set up the working group in June to consider what help "if any" could be given to PMS savers.
Its members include Peter Robinson, Martin McGuinness, Arlene Foster, Sammy Wilson, Shaun Woodward and two Treasury ministers.
The committee was "dismayed" that the Department of Enterprise Trade and Investment in Northern Ireland (DETINI) had access to all relevant information about the PMS "yet this did not result in any preventative action or further examination being undertaken".
They were also "surprised" that DETINI did not consider whether the regulatory gap into which the PMS fell "needed to be filled".
It said: “DETINI should have taken a lead in identifying the problem, and in seeking a solution.”
The committee said there appeared to have been a period when the PMS Working Group was waiting for the administrator and the administrator was waiting for the outcome of the Working Group, whose report to Gordon Brown is now overdue by five months.
When pressed on what help was being given to the administrator, the report said Finance Minister Sammy Wilson admitted that there had been no request for any financial help from the Executive during discussions with the administrator.
The report noted that Enterprise Minister Arlene Foster said the Executive had been “standing ready” since the appointment of the PMS administrator “to help in whatever way we can”.
But the committee was not impressed with their explanations.
“We note with concern that the Northern Ireland Executive considered their passive approach to assisting the administrator to be satisfactory,” it said.
The committee’s damning verdict was that it was “unacceptable and farcical that both the UK Government and the Northern Ireland Executive appear to have suggested some responsibility for solutions but have failed to act”.
“The administrator has understandably hesitated, awaiting possible assistance.
“Members of the Presbyterian Mutual Society face severe hardship: there will not be a solution until a political lead is given.”
The report noted suggestions that the PMS could be taken over by a bank, “possibly with some government guarantee or support”.
“It is possible some other support could be offered. Any acceptable solution must ensure that PMS members get swift access to their money.
“A solution must be found, and must be found quickly.”
The Government will respond to the report in due course.
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Monday 28 May 2012
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