UK Treasury Committee hears evidence in Stormont on Presbyterian Mutual Society

The UK Treasury Committee met in the Senate Chamber at Stormont yesterday to hear evidence on the illegally-operating Presbyterian Mutual Society. There was some sharp questioning of the witnesses, in particular, if I recall, Acting First Minister Arlene Foster, by the committee chairman, John McFall, in one report I heard. But the transcript isn’t available yet and the relevant video isn’t online. The BBC and UTV reports play gently with the “savers” affected, but we know they were really investors, and Will Crawley has the memorandum of concerns presented to the committee by the Presbyterian Moderator. He doesn’t mention the “satanic attack” this time. The PMS adminstrator is still waiting for a ruling on his firm’s application for a five year extension to their current contract. And there’s this from the short Irish Times report

The committee, chaired by former Northern Ireland minister John McFall, questioned several current Ministers, including Enterprise Minister and Acting First Minister Arlene Foster, about why a solution had not yet been found to resolve the crisis.

Mr McFall also demanded to know from the moderator of the Presbyterian Church, Dr Stafford Carson, if it felt any responsibility to the 10,000 savers left unable to access their funds by the sudden failure of the scheme. Dr Carson said the church was very aware of the plight of its congregation who had invested in the society.

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  • Drumlins Rock

    I think Mr McFall should have put the questions to his own party MPs and former NIO colleagues, it was they who reviews to legislation I believed and failed to take any action to bring Mutuals under FSA supervision.
    Oh congratulations on being able to do a post without your usual snide little “supernauralists” jibe.

  • John K Lund / Lllamedos / Suchard

    I wish Stafford Carson was as concerned for the Non Presbyterians who are not in his congregation.

  • Kevsterino

    Investors are responsible for risks they take, therefor their rewards are accordingly higher.

    Am I missing something?

  • Pete Baker

    Kevsterino

    What you’re missing is that the investors thought, apparently, that they were merely “savers”.

  • The Raven

    I was just about to ask, knowing NOTHING about the whys and wherefores of this, that it seems to be that risks were taken with the money of people who just thought they were putting a few quid away for a rainy day…is that not so?

  • villager

    Does anyone know what kind of returns were they getting on their money? Was it comparable to bank rates?

  • Drumlins Rock

    The terminology used is exactly the same as that used with Credit Unions, and when savers placed their money with the PMS the documentation made clear they were savers but for the purposes of a Mutual society each pound saved would be called a share, up to a maximum of 20K , anything after that was a “loan” to the society, one pound always remained one pound and “shares” could not be bought or sold, because no-one took them to be anything other than savings.

  • Pete Baker

    Raven

    That would appear to be the case in some instances.

    Although, why investors were not aware that they were actually investing is another question…

  • Kevsterino

    Well Pete, I would allow those good Presbyterians to interpret the law of the Almighty in accordance with their consciences.

    But banking law?

  • fpveritas

    #

    Invest ” Put money into financial schemes in the hope of making a profit”

  • fpveritas

    #

    Invest ” Put money into financial schemes in the hope of making a profit”

  • joeCanuck

    So some Presbyterian savers investors lost a few (thousand?) pounds and want someone (taxpayers) to give them a handout.

    ME TOO.

  • FitzjamesHorse

    Must be 20 years ago since I saw a long line of savers/investors outside the offices of an “offshore bank” in Bedford Street. The bank had gone belly-up. For some peculiar reason many of them had their faces covered.
    All very amusing.
    This was related to the fact that accross the street in a very high building (cant remember the name)was the HQ of the Inland Revenue.
    Now the point is not that money on large investments is taxed in banks/mutuals etc……it is how it was accumulated…..perhaps ghost earnings, a capital gain, an innocent windfall.

    I hope the God fearing folks in the Mutual Society get re-imbursed by the Taxpayer but by way of balance the Revenue should have a good long look at the names on the list to se where the source of the capital originates.
    Sounds fair to me.

  • fpveritas

    #13#

    Was the offshore bank Kingsnorth?

  • Drumlins Rock

    I think the PMS offered about 6% interest usually, comparable to good bank and building society rates at the time.
    And im sure the acocunts were open to the inland revenue to ask any questions they so choose, no different from the banks.

  • FitzjamesHorse

    Drumlins Rock,
    The point is that the Inland Revenue dont have the resources to ask questions.
    Two of our local banks reached a settlement with IR in the 1990s because local bank managers were advising folks to put money in their isle of Man banks to avoid/evade tax.
    Part of the agreement (as every local accountant of a certain vintage knows) was that the Banks supplied a list of their customers and ammounts to the Inland Revenue.
    The IR approached the list in two ways …getting tax interest and penalties on the interest accrued over a number of years…..AND looking to the source of the income….how was money able to be siphoned off (say £1,000 per month into IOM).
    Interesting.

    fpveritas,
    I have absolutely no idea what the bank was called.
    A lot of greedy people lost a lot of money.

  • FitzjamesHorse

    Drumlins Rock,
    The point is that the Inland Revenue dont have the resources to ask questions.
    Two of our local banks reached a settlement with IR in the 1990s because local bank managers were advising folks to put money in their isle of Man banks to avoid/evade tax.
    Part of the agreement (as every local accountant of a certain vintage knows) was that the Banks supplied a list of their customers and ammounts to the Inland Revenue.
    The IR approached the list in two ways …getting tax interest and penalties on the interest accrued over a number of years…..AND looking to the source of the income….how was money able to be siphoned off (say £1,000 per month into IOM).
    Interesting.

    fpveritas,
    I have absolutely no idea what the bank was called.
    A lot of greedy people lost a lot of money.

  • Kevsterino

    Perhaps they thought they owed nothing to Inland Revenue if they lived on the coast?