Allister again focuses on departmental failures in PMS saga
14 August 2009
TUV Leader Jim Allister QC, who has long expressed the view that establishing some departmental culpability is the way to ensure satisfaction for PMS savers, has returned to the theme claiming DETI ignored warnings by the DETI appointed Registrar of Credit Unions and Industrial and Provident Societies of the absence of prudential supervision of societies such as PMS.
Under The Industrial and Provident Society Act (NI) 1969 the Registrar is required to make a report each year to the DETI Minister. Page 1 of the report for 2007/08 draws specific attention to the absence of a prudential supervisory role in relation to industrial and provident societies. It expressly points out that the Registrar has responsibility for “the effective prudential supervision of credit unions”, but goes on to highlight that “The Registry does not exercise any prudential supervisory role in relation to industrial and provident societies.”
In a statement Mr Allister said,
“Since this report is specifically prepared for the Minister, here we have the Minister put on notice of the absence of prudential supervision, which is a gap in adequate control mechanisms that required to be filled. Yet, no departmental action flowed. Indeed, the scale of the issue was further highlighted by the fact that the same report showed that the assets of Industrial and Provident Societies in 2007 was £851m, comparable to the £860m assets of the properly supervised Credit Union sector. Here we have huge assets in excess of £850m in each sector, one is supervised, the other is not, a common Registrar exists for both, but in the case of only one is he vested with prudential supervisory powers; the Registrar points this out and the Minister and Department do nothing! And this, even though as far back as 2004 the Treasury had published a consultative document on regulatory issues for Industrial and Provident Societies.
“The failure of DETI to enact supervision of Industrial and Provident Societies over the years was, in my view, negligent, particularly given the known scale of funds involved and the parallel supervision which existed under the same legislation for credit unions. Why were £850m of Credit Union funds thought worthy of supervision but £850m of Industrial and Provident funds ignored? Herein, is rooted culpability on the part of the government. It is equivalent to the FSA regulating Banks, but ignoring Building Societies.
"Thus, I again call on the government to face up to its responsibilities in this sorry PMS saga.”
