Stormont double crossing PMS savers – Allister
09 December 2010
Statement by TUV Leader Jim Allister:
“As the details of how Stormont intends to implement the PMS rescue package emerge, I am both appalled and angry at how the Executive intends to double-cross the PMS savers by ensuring the package costs them nothing, even if that means savers go short.
“When the package was first announced it was clear the £175m from Treasury was a loan to the Administrator, but the contributions of £25m from both the Stormont Executive and the Treasury to the Mutual Access Fund, designed to bring swift relief to hard-pressed savers, were hailed as ‘contributions’. Now, it is emerging that at least Stormont’s £25m is also only a loan, but worse, that it must be repaid, with interest, in advance of savers getting any balance monies due to them when the assets of PMS are eventually sold off.
“DFP Minister, Sammy Wilson, having dodged the issue in correspondence with me, has now in an Assembly Answer admitted the ploy. He says, “Over time our hope is that the PMS assets will recover sufficiently for the Access Fund to be repaid and to allow everyone to recover their money in full. However this cannot be guaranteed. After repaying the £175m loan any surplus at the end of the ten year loan workout period would firstly be used to repay the cost of the Access Fund. After this any remaining surplus would be available for distribution to PMS creditors and members.”
So, far from PMS savers being put in the promised position of parity that no British saver will loss money out of the banking crisis, they are to be treated as the poor relation, left with whatever crumbs, if any, there might be after Stormont has looked after itself and recouped every penny and more of what it has trumpeted as a ‘contribution’. Make no mistake, after 10 years the interest on both the £175m loan and the £25m loans will be colossal, meaning the prospect of the savers recovering on a pound for pound basis is remote.
“I think it is shameful that the Executive is determined to grasp for itself ever penny put up for the Access Fund in advance of the savers getting justice and recompense for their losses. The priority on disposal of the assets should be reversed: savers paid off first, and government recoups what is left, particularly since it was DETI acquiescence in a regulatory gap which anticipated the PMS crisis.
“In GB when government bailed out the banks, the savers got immediate protection and full guarantee of their savings and government relied on recoupment as and when the banks returned to profitability. Why is PMS being treated differently with savers pushed to the back of the queue, maybe never to be fully compensated?
“Three things are now clear in respect of the PMS rescue package: in its totality it is inadequate to meet the losses of savers (so why did the Executive settle for such a package?), there is no government ‘contribution’, merely loans to be repaid with interest, and far from there being guaranteed pound for pound recovery by savers there is no assurance that even after 10 years they will recover what they’ve lost, because Stormont insists on being paid back first!
“The more emerges about this pitiful saga the clearer it is becoming that just as DETI bungled over the lack of regulation so the Executive has bungled the PMS negotiations, now compounded by their intention to sell the savers short so that they can recoup, with full interest, any temporary loan they make.
“I call on DFP and the Executive to reverse their intention to prioritise their loan over full recompense for the savers.”
