Page last updated at 12:19 GMT, Thursday, 18 February 2010

Robinson slams 'shoddy' PMS probe

Peter Robinson
Mr Robinson attacked the committee's findings

The NI First Minister has accused a Westminster committee of "buck passing" in its examination of the failed Presbyterian Mutual Society (PMS).

Thousands of savers lost access to their money after a "run" on the PMS in 2008.

The Treasury Committee said NI's Department of Trade and Investment (Deti) could have done more to prevent problems at the society.

But Peter Robinson said the Labour government had chief responsibility.

He accused Labour MP John McFall, chairman of the committee, of engaging in a "shoddy buck passing exercise" in his examination of the plight of the PMS savers.

Mr Robinson said Mr McFall had downplayed the fact that it was the Labour government which had chief responsibility for dealing with the matter.

Deputy First Minister Martin McGuinness described Mr McFall's intervention as "less than helpful".

Two other executive ministers, Arlene Foster of Deti and Sammy Wilson in Finance have also issued detailed criticisms of the report.

Hardship fund

Mr McGuinness and Mr Robinson revealed that they are looking at a number of options for dealing with the PMS.

Their preferred option, Plan A, is described as a commercial option.

Although the ministers gave no details on this, it's understood a bank has been conducting what's known as "due diligence"- examining the society's assets with a view to a takeover.

This option has been talked about for months but has shown no signs of coming to fruition.

A fall back option, or Plan B, is described as a Northern Ireland solution with Treasury support.

British currency
The collapse of the society affected more than 10,000 savers

The final option, Plan C, would involve the creation of a hardship fund for savers.

However the ministers described this as "a last resort" which they do not wish to pursue at this stage.

The PMS, which had 10,000 members, went into administration following a rush by savers to withdraw their money at the height of the banking crisis in October 2008.

People withdrew their money as they learned the society was not covered by the government's bank deposit guarantee scheme.


In a report published on Thursday the Treasury Committee said that there was a "fatal regulatory gap" which meant that no statutory body had oversight of PMS activities and its savers had no protection.

It criticised Deti, saying it had access to all the relevant information about the potential for the PMS to collapse and "yet this did not result in any preventative action or further examination being undertaken".

The report also criticised politicians at Westminster and Stormont for not resolving the situation.

"We consider it 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," it said.

The report found the estimated value of the society's assets was £100m less than its liabilities.

It said the position was improving, and the assets of the society are expected to generate £10m a year in the future but it noted that many savers, especially the elderly, will face hardship if they have a long wait to get their money.

The committee also addressed the issue of how likely people were to get their money back, particularly as PMS members fall into two categories: shareholders who invested up to £20,000 and those who invested more by making loans to the society.

"There is legal uncertainty as to whether shareholding members of the society are entitled to the return of any of their funds until those who have made loans to the society are repaid," the report said.

Last week a judge in Northern Ireland ruled that some of those who had saved £20,000 or less in the PMS could not be classed as creditors and were therefore not entitled to income from assets the society has realised since it went into administration.

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