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House of Commons

Wednesday 3 June 2009

The House met at half-past Eleven o’clock


[Mr. Speaker in the Chair]

Business before questions

Comptroller and Auditor General

The Vice-Chamberlain of the Household reported to the House, That the Address of 20th May, praying that Her Majesty will appoint Amyas Morse to the Office of Comptroller and Auditor General, was presented to Her Majesty, who was graciously pleased to comply with the request.

Oral Answers to Questions

Northern Ireland

The Secretary of State was asked—

Presbyterian Mutual Society

1. Ann Winterton (Congleton) (Con): What assessment he has made of the effect of the collapse of the Presbyterian Mutual Society on savers in Northern Ireland. [277583]

The Secretary of State for Northern Ireland (Mr. Shaun Woodward): The hon. Lady will know that responsibility for the oversight of the Presbyterian Mutual Society is a matter for the devolved Administration, as registration is devolved to Northern Ireland. None the less, she might wish to know that my right hon. Friends the Prime Minister and the Chief Secretary to the Treasury and I are taking a close interest in the forthcoming interim report by the administrator.

Ann Winterton: Bearing in mind that the Presbyterian Mutual Society is in administration mainly because of panic withdrawals following the Chancellor’s guarantee to the UK banking sector, will the Secretary of State persuade the Chancellor and the Prime Minister that a similar guarantee scheme should be extended to provident and mutual societies? After all, what is good enough for the Dunfermline building society is surely good enough for the Presbyterian Mutual Society.

Mr. Woodward: I absolutely understand the hon. Lady’s concern for the 9,500 investors of the PMS, but it is important for her to recognise that there is a significant difference between the status of the PMS and that of the Dunfermline building society, which she has mentioned. It is critical that she understand that the
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individuals who invested money in the PMS were investors, not savers. She refers to panic withdrawals, but it is also significant to note that no other industrial and provident society has got into similar difficulties. That will not make life easier for the families involved, but I look forward to seeing the administrator’s interim report.

Mark Durkan (Foyle) (SDLP): Does the Secretary of State not recognise that those who put their money into the Presbyterian Mutual Society did so believing that they were savers, rather than investors? That is how they understood the situation. Young families and old people with lifetime investments are now caught up in grievance and distress because of a situation that is not of their making. Will the Secretary of State explain why a variant of the model used to relieve the situation of the Dunfermline building society is not being used by the Treasury in response to the situation of the Presbyterian Mutual Society?

Mr. Woodward: Part of the answer to that is that the PMS is not a building society. Having said that, I believe that it is significant that when the Financial Services Authority looked into the matter, it noted that the PMS was conducting

The FSA also states that

This is an important matter, and I say to the hon. Gentleman that we are keeping a close eye on it. We look forward to seeing the report from the FSA and from the administrator as soon as possible.

Dr. William McCrea (South Antrim) (DUP): In October, the Treasury guaranteed that no British customers of Icesave would lose their savings after that Icelandic online bank collapsed. The Prime Minister went on to issue a blanket guarantee that its 300,000 UK customers would get all their money back. Why can he not give the same guarantee to those who have savings with the Presbyterian Mutual Society? Does the Secretary of State not realise the gravity of the situation for many ordinary, decent people in Northern Ireland?

Mr. Woodward: We do recognise the gravity of the situation, which is why the Prime Minister, the Chief Secretary to the Treasury and I are keeping a close eye on it, and why the Prime Minister has been in correspondence and discussion with the First Minister and the Deputy First Minister, and looks forward to having further discussions with the First Minister later this month. We appreciate the gravity of the situation, but we equally have to recognise that, under the law, those people who put money into the PMS did so not as savers, but as investors, and that the regulation of this body in Northern Ireland is the responsibility of devolved government in Northern Ireland, not of Whitehall. Nevertheless, we do not intend to say simply that because the matter is the responsibility of the Department of Enterprise, Trade and Investment, we have no interest in seeing what we might be able to do to help. That is why my right hon. Friend the Prime Minister continues to take an active interest in the matter and will engage with the hon. Member for South Antrim (Dr. McCrea) and his colleagues about it.

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John McFall (West Dunbartonshire) (Lab/Co-op): Since the Treasury Committee took evidence in Belfast a number of months ago on the banking crisis, I have continually been in contact with many of the distressed savers, as well as with the moderator of the Presbyterian Church, Dr. Donald Patton. I have also had meetings with Lord Myners and I have written to the administrator, Arthur Boyd. There is an issue here about the Financial Services Authority getting in touch. If the Northern Ireland Executive, the Presbyterian Church itself and Her Majesty’s Treasury got together, I think that we could get a solution. There is a need for added urgency, and I ask the Secretary of State to take that message back to ensure that we get justice for many of these distressed people.

Mr. Woodward: I welcome my right hon. Friend’s intervention, and it is a mark of his interest in these matters that he came and took hearings in Northern Ireland. I know that all hon. Members would want to welcome his work and contribution. As I said, the Prime Minister continues to take an active interest the matter, as does my right hon. Friend the Chief Secretary, and we will continue to follow it up. There are issues about the regulation of bodies such as the PMS in Northern Ireland and they will need to be addressed. There will be lessons to be learned for the future. For the 9,500 investors, I appreciate that there are real and pressing questions—particularly for those who invested less than £20,000. We all have a duty to do what we can to help them—and that also goes for my right hon. Friend the Prime Minister.

Sir Patrick Cormack (South Staffordshire) (Con): Is the Secretary of State aware that the Select Committee on Northern Ireland Affairs is very grateful to the Treasury Committee for the initiative that it has taken? We would have liked to look into the matter, but as the Secretary of State says, it is devolved. Every member of the Committee has received representations that underline the severity of the situation, so will he please take up the suggestion just made by the right hon. Member for West Dunbartonshire (John McFall), the Chairman of the Treasury Committee, and convene a meeting of all the interested parties to try to reach a solution?

Mr. Woodward: As always, I welcome the advice of the Chairman of the Northern Ireland Affairs Committee, who always has a considered approach to these matters. I am prepared to work to bring people together. Equally, however—I am sure that the hon. Gentleman shares my view—I am very conscious of the fact that if government is devolved, that must be recognised, and we cannot suddenly be seen to be trying to take control of an issue through the back door simply because we are not quite sure whether it is being handled in the way we might have wanted. This is an issue on which I do not think the 9,500 investors will thank Members of this House or of the Assembly for simply saying, “Bureaucracy means that we cannot help.” I am prepared to break the bureaucracy, and if that is taken in which it is meant, I am prepared to work with the hon. Gentleman and other colleagues to help those investors.

Andrew Mackinlay (Thurrock) (Lab): I have listened carefully to what the Minister has said, and he now seems to be warming up and willing to take this on. It does not matter how often he says that the Prime
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Minister takes an active interest in the matter; the test is whether he is going to do anything with some dispatch. That is what the House wants. It is not a question of devolved administration; the issue has arisen against the backdrop of the economic and banking crisis, which is a matter for the First Lord of the Treasury, the Prime Minister. This House wants him to proceed as if this were happening in Greater London, where 900,000 investors would be kicking up, and everyone would be demanding debates and action this day.

Mr. Woodward: As always, the Churchillian recognition of my hon. Friend is helpful in allowing me to enjoy this a little more; I am tempted to say I am enjoying this, but perhaps I should resist that.

We have to recognise again that these are not savers; they were investors. As such, they made an investment as risk capital in the form of withdrawable shares and loans. There is an issue about whether or not this should have been regulated; it was registered; it should have been regulated. There is an issue that I continue to want the FSA to look at, but I am not trying to evade our responsibility. If we can find a way to help these people, we should do so. I am prepared to break the bureaucracy to do it, if it is at all possible.

Mr. Owen Paterson (North Shropshire) (Con): It was the Government’s guarantee to other banks and the failure of regulation that brought about the collapse of the Presbyterian Mutual. I met the former moderator and the general secretary on Monday, and I was shocked to learn that they had written to the Prime Minister three times since November, but he had sent only one holding reply. I was also surprised to find out that the Secretary of State had not met them. The Prime Minister is the architect of the current financial regulatory system. If his Presbyterian conscience extended to Dunfermline, why will he not apply it to the Presbyterian Mutual?

Mr. Woodward: First, I want to acknowledge that the hon. Gentleman is the most assiduous visitor to Northern Ireland who has ever held the Opposition spokesman’s job. He cannot help but be there at least half of every week, and we should acknowledge that. I just wish that he would sometimes learn a bit more while he was there. As I have said to him, the Presbyterian Mutual Society is made up not of savers but of investors. The issue is devolved, and I know he has a problem with that—of course, his party has formed an alliance with the Ulster Unionists in the hope of making some progress nationally—but the fact is that devolution has happened. He must respect, rather than undermine, devolution. The Prime Minister has taken an interest in the matter and met the First Minister and Deputy First Minister on it. We have held discussions, and further meetings will take place. But the hon. Gentleman must respect the fact that devolution does not mean bringing the matter back to Westminster through the back door.

Mr. Paterson: Contrast that with the clarity of the right hon. Gentleman’s successor, my right hon. Friend the Member for Witney (Mr. Cameron), who said at a public meeting in Ballymena two weeks ago:

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So, will the Secretary of State answer directly the question put by my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack)? Will the right hon. Gentleman agree to take a delegation representing the Presbyterian Mutual and the savers to see the Prime Minister in the next couple of weeks, to find a solution to protect many innocent people who fear the loss of their life savings?

Mr. Woodward: Once again, we recognise the problem of the 9,500 savers. The hon. Gentleman refers to the leader of his party, the right hon. Member for Witney (Mr. Cameron)—and I must admit that I know a thing or two about Witney. He did travel to Northern Ireland, and he said to people that he was not there to make spending promises. As my hon. Friends know, that is probably because everywhere he goes he is promising to make 10 per cent. cuts, should we ever see him in government. The people of Northern Ireland should pay careful attention to the words of the hon. Gentleman’s leader, because he would be very bad news for them. He does not understand the problems of Northern Ireland or of the Presbyterian Mutual, or that the Presbyterian Mutual is made up of investors not savers. As I have said, my right hon. Friend the Prime Minister will meet the First Minister and Deputy First Minister again to see what can be done to help such people, not with empty slogans and hollow promises but with real action—and not by doing nothing.


2. Angela Watkinson (Upminster) (Con): What assessment he has made of progress in decommissioning of arms by loyalist paramilitary organisations; and if he will make a statement. [277584]

The Secretary of State for Northern Ireland (Mr. Shaun Woodward): I would like to take this opportunity to express the condolences of the whole House to the family of Kevin McDaid, who was murdered last Sunday week, and also to Damian Fleming, who was badly attacked and suffered serious injuries. The Government totally condemn those responsible for those serious crimes. The Independent International Commission on Decommissioning continues to make progress with those paramilitary organisations that have engaged with the decommissioning process.

Angela Watkinson: I thank the Minister for his response, but the Independent Monitoring Commission’s assessment of the likelihood of decommissioning by the Ulster Defence Association is that it is difficult to judge what turn events might take and when. Given the qualified position of the Independent Monitoring Commission on judging such matters, what makes the Secretary of State think that any progress will be made within the next 12 weeks?

Mr. Woodward: I am grateful for the interest that the hon. Lady and her hon. Friends take in this matter. We have to rely on the IICD for advice on such matters. Its independence means that we do not know what it is doing and where. I have meetings with it, and it has informed me that it continues to make meaningful progress in dialogue with the organisations concerned,
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but as I have said, if we can find another route for decommissioning, we should take it, which is why we have. Such a system is not adopted instead of law and order, and it does not allow people to retain their guns indefinitely, but it might be the only way to get them in. The House should be in no doubt: if the IICD tells me in August that it has not made meaningful progress, I am committed to ending the decommissioning process immediately.

Mr. Eddie McGrady (South Down) (SDLP): I wish to associate myself with the Secretary of State’s remarks about the horrendous murder of Kevin McDaid and about Damien Fleming. That really was an horrendous setback for our society in Northern Ireland.

The Secretary of State informed us in October 2007 that meaningful engagement and negotiation had already taken place with the independent decommissioning body. On 1 April this year, he said that if

in negotiation by the middle of August, he would terminate the decommissioning legislation. Can he tell us what he means by “meaningful progress”? Is it to be interpreted as the handing in of all weaponry by the UDA and associated loyalists by mid-August, and does it mean that there will be no more provocation in regard to the abandonment of the decommissioning legislation?

Mr. Woodward: I thank the hon. Gentleman for the role that he continues to play in helping to deal with the legacy of the past in relation to sectarianism. I acknowledge that in his opening remarks.

I do not think it is helpful for me to give the House a running commentary on how the IICD is progressing. It has an outstanding track record in achieving decommissioning on the part of paramilitary organisations since its establishment. If the IICD tells me, as Secretary of State, that it is making meaningful progress in dialogue with those organisations, I think that we have a duty for the next 12 weeks to stick with it in good faith.

Mr. Jeffrey M. Donaldson (Lagan Valley) (DUP): I am sure the Secretary of State agrees that while decommissioning by loyalist paramilitaries is important, it is equally important for the weapons used last night in west Belfast to shoot a young man to be decommissioned, and for organisations such as the Irish National Liberation Army and other republican splinter groups to be brought into the decommissioning loop. It is important for their weapons to be taken out of society as well.

Mr. Woodward: It is important for all weapons to be taken out of society. It is my view that none of these instruments, whether they be guns or whether they be knives, has any place in a normal, decent, civilised society. We have a duty in the House to ensure that we do everything we can to find every means possible to remove these weapons from the streets and from people’s homes. There is no doubt that they contribute to sectarian violence.

I thank the right hon. Gentleman for what he has done in this regard. As Father Keaney, the priest who presided over the funeral of Kevin McDaid, said earlier this week, we must all see what we can do to remove

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