THE FAILURE OF THE PRESBYTERIAN MUTUAL SOCIETY
Treasury Committee calls for closure of regulatory gap which led to Presbyterian Mutual Society losses
Report and oral and written evidence |
Thousands of people were badly affected when the Presbyterian Mutual Society entered administration. The Committee launched an inquiry to find out how the problems happened, the impact this has had and whether UK law needs to be changed to stop something like this happening again.
As part of the inquiry the Committee visited Belfast on Monday 18 January to take formal evidence.
Oral evidence - 18 January 2010
Witnesses: Sammy Wilson, MP MLA, Minister of Finance, Mr Mike Brennan, Head of Strategic Policy Division, Mr Peter Jakobsen, Strategic Policy Division, Department of Finance and Personnel, Ms Arlene Foster, MLA, Minister of Enterprise, Trade and Investment, Mr Sandy Williamson, Northern Ireland Registrar of Industrial and Provident Societies, and Mr Mike Bohill, Head of Business Regulation Division, Department of Enterprise, Trade and Investment;
Mr Alban Macginnis MLA, Chairperson, Mr Paul Butler MLA, Deputy Chairperson, Mark Durkan MP MLA, former Chairperson, David Simpson MP MLA, Mr Leslie Cree MLA, and Mr Sean Neeson MLA, Enterprise, Trade and Investment Committee;
Mr Derek Lynn, Mr Don McClay, Mrs Gwen Smyth, Mr Robin Manson, and Mrs Hazel Russell, Members of the Presbyterian Mutual Society and Representatives.
The Presbyterian Mutual Society was placed into administration on 17 November 2008, after the Northern Ireland Assembly passed emergency legislation to allow this. During the month of October 2008 the Society had experienced an unprecedented increase in the number of requests for repayment of members’ investments. It was common practice for the Society to repay investments on receipt of a request, and payments of £21 million were made up to Friday 24th October 2008, leaving £4 million in the Society’s bank account. As the PMS an Industrial and Provident Society, those with money in the society did not have access to the Deposit Protection Scheme
A Ministerial Working Group was set up which containing the Chief Secretary to the Treasury (chair), the Northern Ireland First Minister and deputy First Minister, the Secretary of State for Northern Ireland, the Economic Secretary to the Treasury, the Northern Ireland Minister for Finance and Personnel and the Northern Ireland Minister for Enterprise, Trade and Investment.
The terms of reference of the Presbyterian Mutual Society Working Group are:
- To investigate the circumstances surrounding the collapse of the PMS.
- To consider the losses incurred by PMS members.
- To consider what, if any, action can be taken to mitigate members’ losses, particularly those hardest hit by the collapse of the PMS.
As of March 2010 the Group has yet to publish a report.