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Presbyterian Mutual Society

Volume 508: debated on Wednesday 24 March 2010

2. What recent discussions he has had with the Chancellor of the Exchequer on the effect on savers in Northern Ireland of the collapse of the Presbyterian mutual society. (322974)

The Chief Secretary to the Treasury and my right hon. Friend the Secretary of State are both members of the ministerial working group established by the Prime Minister. They, along with Ministers from the Northern Ireland Executive, are in regular contact in an effort to assist members of the PMS whose investments were affected by the society’s entry into administration.

The Financial Services Authority warned of a problem with the PMS almost a year ago, the Prime Minister set up his working group last summer, the Treasury Committee issued a scathing report this February saying that nothing would be resolved unless a political lead was given and this morning the relevant Minister in another place gave no lead whatsoever and no clue as to what might happen. Is this not a classic example of a Government who are incapable of taking a decision and who are letting down 100,000 savers in Northern Ireland?

No, it is not, because the Prime Minister established the working group and I hope that it will very shortly be able to consider a proposition—a paper—from the Executive in Northern Ireland, which will put forward a range of options. The commercial option is, of course, one that we would all wish to see taken, if it is possible to do so. The Executive have also been working on specific ideas. We need to hear those ideas, consider them and look for solutions.

Does the Minister agree that regardless of the legal and commercial niceties, there is a moral obligation on us all to help relieve the serious distress, both financial and emotional, that genuine savers in the PMS are suffering? These people invested in good faith and we have a moral responsibility to return that good faith or give them some return on it.

I agree that there is a sense of moral obligation here—the Prime Minister has said that—but none the less we have to find a solution that is hard-headed. We need a solution that will actually work in the interests of those who genuinely and in good faith invested their money in the PMS.

The Minister will be aware of the hardships faced by many PMS savers, who become more concerned as time goes on. Will he and the Secretary of State use their good offices to ensure that the Treasury co-operates fully with the Northern Ireland Executive to bring forward a solution and a package that will bring real assistance to PMS savers as soon as possible, so that their plight can be resolved?

I agree strongly with the right hon. Gentleman, who knows, as I do, that many, particularly older, investors, have lost money and are suffering financial hardship as a result. We all have enormous sympathy with them, but what we need more than sympathy is a solution. Yes, we might need to consider a hardship fund in the end, but it would be better to find a sustainable solution that would work in the long term. A commercial solution would be best, but ideas will be coming from the Executive shortly that are worthy of consideration. We should work together to see whether a sustainable solution can be found.

The Minister of State and the Secretary of State have been excellent Ministers for Northern Ireland, and I appreciate their efforts on many fronts. Will the Minister of State give a clear assurance to PMS savers, not just in my constituency but across Northern Ireland, that the Government will find a solution, before the election, to the situation in which those people find themselves through no fault of their own? Will he give a clear assurance that there will be a solution before the general election?

I am very grateful to the hon. Lady for her comments about me and my right hon. Friend. I give her an absolute assurance that for every day of this Parliament that remains, we will continue to search for a solution that will work for those investors and that will restore confidence and, I hope, some money to them. In the end, it is their hard-earned money that has been lost, and we need a hard-headed solution that will work in practice.

Last June, the Prime Minister announced a review group to look at the plight of those involved in the PMS, and promised that it would report by September. The Prime Minister intervened to rescue the Dunfermline building society, and boasted to the Labour party conference that

“not one British saver has lost a single penny”,

but it was his guarantee to banks that triggered the run on the PMS. What is the reason for yet another broken promise from this bankrupt Prime Minister?

The hon. Gentleman may be more interested in process than in solutions, but my right hon. Friend and I are interested in finding solutions. It is a completely false comparison, as anyone who has studied this knows, to compare the situation of the PMS with that of the Dunfermline building society. That financial institution was regulated by the FSA, whereas with the PMS we are talking about an industrial and provident society. I hope that, even at this stage, he will join us in the search for a solution rather than dwelling on process.

The Treasury Committee, with a Labour majority, said it was

“unacceptable and farcical that both the UK Government and the Northern Ireland Executive…have failed to act.”

In Northern Ireland questions last June, the Secretary of State promised me further talks,

“not with empty slogans and hollow promises but with real action—and not by doing nothing.”—[Official Report, 3 June 2009; Vol. 493, c. 261.]

But here we are, nine months later, and nothing has happened. We cannot go on like this. Is it not time for change and for him to make way for a Secretary of State who will stick up for the people of Northern Ireland? [Interruption.]

Order. I want to hear the answer. There is far too much noise and there are far too many private conversations taking place in the Chamber.

I was trying, before, to give the hon. Gentleman a fairly basic lesson in the economics of this issue, but we will shortly be getting an economic master-class from others at this Dispatch Box. I encourage the hon. Gentleman to listen very carefully, because he might just learn something for a change. The position is absolutely clear: a considerable amount of work has been done, even in the recent past, by Members of the Executive in Northern Ireland. They are represented on the working group that has been convened by the Prime Minister, and my right hon. Friend the Chief Secretary also belongs to that group. We want to find solutions—