Allister urges extension of Government protection to mutual savers
27 November 2008
Government has a ‘moral duty’ to extend the financial protection scheme to include savers of mutual savings schemes, including the Presbyterian Mutual, says TUV MEP Jim Allister.
The MEP said,
“To a large extent, the Government's understandable action in protecting banks has induced the run on mutual societies, because they are outside the scope of the financial protection scheme. From this, I believe, there flows at least a moral obligation on Government to respond to a crisis within mutual societies induced by its selective protection scheme.”
“Thousands of small investors are suffering greatly as a result of the inability of the Presbyterian Mutual Society to meet the cash demands upon it, which has resulted in that particular mutual society going into administration, with savers being denied access to their savings. I have therefore written to the Chancellor, making the case to extend financial guarantee to include mutual societies, including the Presbyterian Mutual. If investors in banks are worthy of protection, then, surely and equally, investors in the mutuals deserve the same comfort.”
I have also tabled a priority written question to the European Commission which is as follows:
"In light of the Commission's involvement in financial regulation, is the Commission satisfied that national obligations have been met in circumstances in the UK where the Government's financial protection scheme for banks does not extend to investors in mutual societies, not least since the bank scheme has induced a run on the mutuals, driving some, for example the Presbyterian Mutual Society in Northern Ireland, into administration? Surely financial regulation and guarantees should be such as to regulate the whole sector and afford the same level of protection to all facets of the sector, including mutual societies?"
