Norther Secretary Owen Paterson has signalled that provision for a solution to the stricken Presbyterian Mutual Society will be included in the British chancellor George Osborne’s spending review next Wednesday.
The society went into administration in 2008 leaving some 10,000 people unable to access their savings and facing losses of millions of pounds.
Two years ago the society had estimated assets of £300 million (€342 million), but a run on deposits and a huge reduction in the value of multi-million property investments forced the society into administration.
Since the collapse, First Minister Peter Robinson, Deputy First Minister Martin McGuinness and other Executive Ministers have pressurised both the British Labour government and now the coalition administration to come up with a solution for the investors.
On Tuesday evening a special ministerial working group that included Mr Paterson, Mr Robinson, Mr McGuinness, Northern Minister for Enterprise, Arlene Foster, and junior Northern Ireland Office Minister, Hugo Swire, held talks with British treasury minister, Mark Hoban, to discuss a potential solution
“We have made significant progress. We are confident that we will be able to outline a way forward for PMS members in the context of the spending review announcement on October 20th,” said Mr Paterson.
“We remain committed to ensuring a fair and just resolution which will balance the interests of members and taxpayers.”
Two main solutions are being considered. The preferable option is for a commercial institution to take over the society, but so far no bank or other institution has come forward with a realistic offer.
Ms Foster yesterday indicated the second option of a British government-funded scheme to be provided for in next week’s spending review was the most likely.
“We cannot wait any longer, we really need to push ahead with plan B, which is a government-backed solution consisting of a loan and a mutual access fund. So what we’re doing now is we’re waiting to see how much funding we will have for that scheme next week,” she told the BBC.
She added, however, that if a bank or other financial institution were to subsequently come forward, then the commercial route would be taken by the Executive.
Society members will decide on the deal, but Ms Foster stressed this would be a “take it or leave it” scheme, and the alternative would be liquidation.
Former moderator Dr Stafford Carson, who is leading the Presbyterian church’s response, welcomed this development.
“Savers who have had no access to their own money for two years will be relieved to hear Mr Paterson’s assurance that a way forward can be outlined soon,” he said.
The Presbyterian Church in Ireland has pledged to provide £1 million to assist the rescue plan.
The Northern Executive previously indicated it would create a “hardship fund” of £50 million to help PMS investors.
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