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Presbyterian Mutual Society

Office of the First Minister and deputy First Minister – in the Northern Ireland Assembly at 2:45 pm on 15th June 2009.

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Photo of Danny Kennedy Danny Kennedy UUP 2:45 pm, 15th June 2009

4. asked the Office of the First Minister and deputy First Minister for an update on any discussions it has had with the Prime Minister and HM Treasury on the Presbyterian Mutual Society.          (AQO 2954/09)

Photo of Peter Robinson Peter Robinson DUP

Every Member will be acutely aware of the difficulties that members of the Presbyterian Mutual Society (PMS) face. When the deputy First Minister and I met the Prime Minister on 25 February 2009, we took the opportunity to register our concerns about the PMS situation. After the Prime Minister received the report on the PMS, he agreed to a further meeting with us to specifically discuss the matter. That meeting will take place on 17 June. We have also been in contact with the Secretary of State on the matter. Furthermore, on 29 April 2009, my colleagues Nigel Dodds and Arlene Foster met the then Chief Secretary to the Treasury, Yvette Cooper, to discuss the PMS issue.

That constructive meeting entailed an exchange of views, as well as information about the particulars of the PMS situation. Members of the society have been living with uncertainty as to the state of their savings for some considerable time. The administrator who is appointed to wind up the society’s affairs has indicated that it would be helpful to know whether the Government are prepared to offer assistance.

For those reasons, we are keen that when we meet the Prime Minister later this week, we can leave with some firm decisions as to his Government’s intentions. The ambiguity of the current situation is harmful and hurtful, not only to members of the Presbyterian Mutual Society but to the wider community.

Photo of Danny Kennedy Danny Kennedy UUP

I am grateful to the First Minister for his reply. I declare an interest; I have a modest sum of money in the Presbyterian Mutual Society. I welcome the fact that First Minister has indicated the cross-party and cross-community nature of this issue. All Assembly Members are aware of the acute and severe financial hardship that a great many find themselves in through no fault of their own.

Does the First Minister agree that when Gordon Brown tells the House of Commons that no UK saver will lose out as a result of the current banking crisis, that guarantee should extend not only to members and savers of the Dunfermline Building Society but to those of the Presbyterian Mutual Society?

Photo of Peter Robinson Peter Robinson DUP

As a general principle, we can all support that. He will be aware that the Government make a distinction between savers and investors. The Prime Minister has been quick to point out, as was the Secretary of State, that Presbyterian Mutual Society depositors were investors, rather than savers. I do not accept that distinction. It was not in the mind of anyone who deposited funds in the Presbyterian Mutual Society that they were speculating, hoping to make a quick pound. They were, in every sense, savers. If the Secretary of State can tell the House of Commons, as he did on 3 June, that bureaucracy should not stand in the way of doing the right thing, we would all judge him severely were he to make semantics an obstacle to progress.

I trust that the Prime Minister will recognise the genuine determination on the part of those who deposited funds in the PMS that they are on a level playing field with savers in the Equitable Life Assurance Society, the Dunfermline Building Society and the third mutual society that was reported to be in difficulty at the weekend. For those reasons, the Government need to assist the PMS. We will make that case.

We recognise that it would be altogether better, from the point of view of the depositors, were a bank to take an interest in the PMS and, therefore, cover it by the guarantees that are available to banks. That is outside our control, although the Government, who have a stake in several banks, might like to encourage people to look at that option.

Photo of Mark Durkan Mark Durkan Leader of the Social Democratic & Labour Party

I assure the First Minister and the deputy First Minister that they go into that meeting with the encouragement and endorsement of all Members.

The First Minister rightly picks up on the false distinction that the Government make between investors and savers. As he says, those who saved in the Presbyterian Mutual Society thought of themselves as savers. The Government cannot have it both ways. They cannot, on the one hand, cite Financial Services Authority concerns that money was being taken in the form of deposits, because that is essentially the business of banking, and, on the other hand, indict the savers as though they were investors.

Photo of Francie Molloy Francie Molloy Sinn Féin

You must ask a question.

Photo of Mark Durkan Mark Durkan Leader of the Social Democratic & Labour Party

Will the First Minister make it clear that several charities are among those who have invested over the shareholder limit? The Government’s suggestion that they are speculative investors is downright insulting.

Photo of Peter Robinson Peter Robinson DUP

We are happy to do that. I appreciate the Member’s comment that there is overall support around the House for the case that we will take to the Prime Minister.

Unfortunately, those who invested more than £20,000 with the Presbyterian Mutual Society are regarded as having provided it with a loan and, therefore, have first call on any funds that become available. That means that people who made investments of less than £20,000 will be hurt most. I do not know the category into which the Member for Newry and Armagh falls. It means that many people who had put away a nest egg will be unlikely to get more than 30 pence in the pound for their savings. That is regrettable. That is the area into which the Prime Minister must look most closely.