Home > General > PMS update

PMS update

February 14th, 2011

the-presbyterian-mutual-societyHere’s the transcript of answers given by Sammy Wilson, Minister of Finance and Personnel, on questions asked in the Northern Ireland Assembly today with regard to the rescue package for the Presbyterian Mutual Society. One of the key answers is given in the final paragraph as to whether the £25m from the Northern Ireland Executive is a gift or a loan to the PMS. Mr Wilson makes it clear that it is a loan that will have to be repaid, and that the £25m from the Treasury is a gift.

Mr Girvan asked the Minister of Finance and Personnel to outline the current position in relation to the resolution of issues surrounding the Presbyterian Mutual Society. (AQO 1022/11)

The Minister of Finance and Personnel: The ministerial working group, the First Minister, the deputy First Minister, the Minister of Enterprise, Trade and Investment and I, on behalf of the Executive, have managed to secure from the Government the resources necessary, first, for a £175 million loan and, secondly, for a £25 million contribution to the mutual access fund. Of course, as the Member will know from the Budget discussions that we have had, we have already allocated £25 million from our own Budget in Northern Ireland to that fund. We are also expecting a contribution of at least £1 million —although I hope that it will be substantially more that that — from the Presbyterian Church, which has a responsibility in all of this, so that we can ensure that the small savers get a large proportion of their money back in the first instance.

The arrangements and details of the fund are being worked out by DETI. As far as repayment is concerned, a scheme will be put forward for acceptance by the savers. The £175 million will have to be repaid first, because it is a loan that the Executive have taken out. Once the property starts to be sold, the savers will get their money, and the repayment to the mutual access fund will come after that. If there is any surplus, the administrator will decide how it is to be distributed.

Mr Girvan: I thank the Minister for that information and breakdown. Investors seem to feel that there is some ambiguity about whether they will have to pay back the £25 million contribution from the Northern Ireland Budget. If devolution were not in place, could the deal have been delivered? I am talking about the overall package of £175 million.

The Minister of Finance and Personnel: From the very start, we have sought to ensure that the Executive would help those who were hurt financially as the result of the collapse of the Presbyterian Mutual Society (PMS). Had we not had devolution and the commitment from the Ministers whom I mentioned earlier, there would have been no rescue package for the Presbyterian Mutual Society savers; their money would have been long gone. Considerable resources are involved. I know the resources that my Department discussed at official and at ministerial levels. I also know about the political capital that the First Minister and the deputy First Minister expended and the tireless efforts of the Minister of Enterprise, Trade and Investment in dealing with the problem. That would not have happened had we not had devolution.

There are those who I think wish that we had not been successful in getting this arrangement. I am talking about the kind of whingers that we have in the TUV, who scrutinise every statement to see how they can unsettle the savers in the Presbyterian Mutual Society. I think that they would prefer for those savers to lose out so that could make some cynical political capital from that.

He has been talked about as the Mr Nasty of Northern Ireland politics, but he is also the Mr Grumpy and the Mr Cynical of Northern Ireland politics. Of course, we all know who we are talking about — the leader of the TUV, who leads a party with very few followers. He is looking for a platform —

Mr Deputy Speaker: Minister, your two minutes are up.

The Minister of Finance and Personnel: He thinks that he can somehow or other capitalise on the misfortune of savers to give himself a political platform.

Mr O’Loan: We all hope that a sound rescue plan for the PMS savers can be put in place. Does the Minister agree that, if the Assembly is to lend £200 million to the scheme, Members, who will vote on the matter, are entitled to have the full details of an independent assessment of the risk involved in the scheme, not merely an assurance from the Minister?

The Minister of Finance and Personnel: The Minister is required to do the due diligence exercise, which the Department has carried out. Believe you me, given the hoops that we have had to jump through for the Treasury, it has not been an easy exercise. We said all along that this is a 10-year deal, which shows the Executive’s commitment. However, it depends on what happens in the property market. It is not without risk, and I do not want to be accused of trying to hide the risks involved. Members will have to vote on it on the basis that there is no guarantee at the end of the period that 100% of the commitments will be realised.

However, that is true of any situation that relies on the sale of property that has been devalued and in which there is a 10-year period over which that value has to be recouped. Neither the Minister of Enterprise, Trade and Investment, the First Minister and deputy First Minister nor I have ever tried to hide that, which is why we wanted the mutual access fund and the contribution from Westminster, which we have been able to secure.

Mr McNarry: There are many Mr Men about in politics from time to time, including Mr Funny. In light of some of the questions, I do not detect Members being begrudging on the issue, except what the previous Member to ask a question was driving at. Will the Minister confirm that the status of the very welcome contribution by the Northern Ireland Executive is not a loan?

The Minister of Finance and Personnel: There are three parts to the Executive’s contribution. First, there is the £175 million that we will raise through the RRI: that is a loan that has to be repaid, and interest will be attached to it. Secondly, there is a financial contribution of £25 million from the Executive, which is contained in the Budget: that is a loan that will have to be repaid. The third element is a £25 million contribution from the Treasury: that is a gift to the Northern Ireland Executive, not a loan to the Presbyterian Mutual Society. Should money be available to cover that at the end of the period, it is up to the administrator as to how it is distributed.

Categories: General Tags: