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Presbyterian Mutual Society

It is an honour today, as it always has been, to serve under your chairmanship, Sir Nicholas. We have always appreciated the extensive interest that you have taken in the affairs of Northern Ireland, and you will be greatly missed by this House, not least for the authority and command that you have exercised. The House is to lose one of its star performers. We very much appreciate the role that you have played and your interest in the affairs of our Province. I have no direct interest to declare, as I am neither a Presbyterian nor a saver, anywhere, but I should at least declare my membership of the Prime Minister's ministerial working group. The working group was not set up as the result of any call made in the House of Commons. I was present at the meeting when the group was put together; I was present when its terms were agreed; and I was present when the statement was agreed on its being set up in direct response to a request made by the Deputy First Minister and myself. The Prime Minister readily made that response because he accepted that there was a "moral obligation"—that was the term that he used—on the Government to assist the savers of the Presbyterian mutual society. He did not use the term "savers"—that has always been my term. He prefers "investors", but we have already heard the challenges to the use of that term. Like others, I do not want to involve myself in a blame game, nor do I want to make claims about how we might move forward. It is clear to me that the problems faced by the PMS arise directly from the fact that the Treasury restricted the guarantees if offered to financial institutions to those that were authorised by the Financial Services Authority. There is a special set of circumstances in relation to the PMS which I believe should have been taken into account. The society should have been covered by that umbrella, but it was not, which led to a run on the liquid assets of the PMS as soon as it was discovered that guarantees were available in other banks. People started to move money across and pressure came on the PMS, with the consequences about which we are all aware. I have constituents who are facing real hardship as a result of their circumstances, just as my hon. Friend the Member for South Antrim (Dr. McCrea) and the hon. Member for Foyle (Mark Durkan) outlined. I have a constituent who is in precisely the circumstances outlined by the hon. Member for Foyle: they were seriously injured in a car accident and received a compensation payment, which was placed in the PMS, but they cannot get access to the funds for their care and are having to rely on family members to provide them with help, enabling them to mark time until the moment when the problem is resolved. There are four ways forward. One of them, which in my view should not be entertained, would be to allow events to take their course and allow someone to go to the courts and force the administrator to have the fire sale that my hon. Friend the Member for South Antrim spoke of. That would be the worst set of circumstances. I suspect that that course of action would lead to most, if not all, of those who have lent money receiving their funds back, but all those who have less than £20,000 probably not getting anything back. That would lead to considerable hardship on the part of those who need the funds most of all. The next option is to set up a hardship fund, which would allow the previous option play out, but ensure that help was available to those in the greatest difficulty. That would have limited appeal. It might take away some of the pain, but it would take a very long time for the administrator to work through his end of the problem, it would probably be several years before the fire sale took place, and it would take considerable time for the hardship fund to be put in place. The next option is for assistance to be given for an orderly run-down of the affairs of the mutual society. All of us recognise that the administrator has indicated that we are not dealing with a society that is holding on to toxic assets. The fact that it was said that, recently, lenders were given 12 pence in the pound because funds of more than £20 million were available to the administrator to disburse indicates that funds are coming in to the mutual society. Its assets are solid and strong. It is the problem with the property market that gives the greatest difficulty to the administrator. Given time for the property market to recover, I believe, on the basis of what the administrator has indicated, that it will be possible for the administrator to be able to recover the funds not only of the lenders, but of those who would be described as shareholders—those with less than £20,000 saved. That option should be seriously considered, but only if there is no commercial option available—that is, no banking option. That is much the best option open to the society. All of us recognise that, the longer we go without someone stepping forward and indicating that they are prepared to take over responsibility for the society, the more likely it is that we will have to consider other alternatives. I understand that a commercial interest is still looking at the society's affairs and carrying out due diligence, so there is a strong possibility that something may come from that. The Deputy First Minister and I have been considering this matter for a long time with our colleagues, including the Finance Minister and the DETI Minister. I say to the hon. Member for Foyle that those people happen to be members of my party, but their portfolios and their ministerial responsibilities bring them together with the Deputy First Minister, who, in spite of the fact that he can, like myself, say that he is neither a Presbyterian nor a saver in the PMS, has shown an interest and has attempted at all times to be helpful in this matter. We are agreed on a proposition that we have put to the Treasury. It would be a fall-back position—an option to be picked up if it is not possible to move ahead with a commercial proposition. It would require the support of the Executive and the Assembly, and changes to Assembly legislation would be required to bring it about. The real problem is timing. The more I speak to savers with the PMS, the more I realise that this affair cannot go on until the next Government are in place. It has to be brought to a head and dealt with now. This Administration have the detailed knowledge of the issues involved. On behalf of all those who have been involved with the ministerial working group, I want to put on the record our appreciation of the work done by the Economic Secretary to the Treasury, who has at all times been helpful and has been prepared to extend himself to see if a solution can be found. I trust that, working closely with the Northern Ireland Executive, we can within days, and certainly within a few weeks, allow some hope to be expressed tangibly to those who have funds locked in the PMS. All of us know about the difficulties being experienced by people in our constituencies, including those whose money is in the PMS for the purposes of funeral expenses. I cannot overstate the extent to which the thought that their funds will not be available in such circumstances causes anxiety and concern to elderly people who are without other means. Businesses have funds locked in the PMS, as do churches, whose building programmes have ground to a standstill because funds cannot be realised as a result of the present difficulties. I urge the Minister to look favourably on the solutions and to assist in whatever way he can any commercial interest that is still sitting there, so that this matter can quickly be resolved.