A mutual crisis

In the first of our series on faith in a financial crisis the Presbyterian Church in Ireland's Moder

‘Britain must have confidence’ said the prime minister, Gordon Brown, a fortnight ago.

His comment underlined the lack of confidence that is dogging the financial system, which he propped up with the introduction of a credit guarantee scheme to the banks last October.

Alert to the implications, some investors in the Presbyterian Mutual Society, based in Belfast, realised their money was not covered by the guarantee. This triggered a run on the liquid assets of the Society.

The Society operated an easy access policy to savings, so savers withdrew their money to the tune of £21 million within a short space of time. The directors applied to the Department of Enterprise, Trade and Industry (DETI) of the Stormont Executive, to put the Society into Administration, and an Administrator took over on the 17th November 2008.

No new business is being accepted and savers cannot gain access to their money. This has placed many people in difficulty since they cannot pay bills due, nor meet commitments undertaken. Not only is lifestyle affected but also property and businesses, with a knock-on effect to jobs and livelihoods.

There are various links between the Mutual Society and the Presbyterian Church in Ireland. Only members of the Church can invest, and the Board of Directors is made up of Presbyterians appointed by the annual meeting of the shareholders. The Church has never had any operational involvement with the Society and the accounts are not presented to it for approval, but each year at the General Assembly meeting of the Church, a verbal report has been given commending the attractive dividend distributed. With that understanding, the Church, in general terms, drew the attention of members to the benefits described with a view to possible investment.

No one anticipated the difficulties that swiftly overwhelmed the Society in the autumn. We now realise that no financial institution is fireproofed against the credit crunch. The god of materialism has clay feet. There are those who feel the Church has misled them, and, because it has been pointed out that the Mutual is an independent organisation, that the Church has disowned them. Confidence in both the Presbyterian Mutual Society and in the Presbyterian Church has been shaken.

The Church is being pressed to do something to free up people’s savings or to return their money. However the Church has had no access to the books of the Society. The Administrator is severely constrained by law from divulging information. Recently he published his initial report revealing a deficit of around £100 million. People fear they will lose a substantial proportion of their money. Investors have had the opportunity to vote on five resolutions proposed by the Administrator in which he indicates how people might vote if they wish an orderly wind down over a period of time and thus get the best return. The alternative seems to be liquidation, increasing the losses. This will only become clear when the Administrator indicates what rate of distribution he can make.

The Church is able to offer limited help through some benevolent funds to those in dire need. As Moderator of the Presbyterian Church in Ireland, I have written to the Prime Minister, asking for a meeting to put our case for government help, which would include the guarantee, but, also, to find some means to improve the liquidity of the Society and so stabilise the situation.

The Prime Minister has agreed, in principle, to meet the First Minister and Deputy First Minister of the Stormont Executive. I have also met several of the Northern Ireland MP’s at Westminster, local MLA’s at Stormont, and the Minister responsible for DETI. We have been encouraging Presbyterians to sign a petition on the Downing Street web site asking ‘…the Prime minister to provide similar guarantees to UK mutual societies as for banks.’ Printed copies of this have been provided for Presbyterians to sign in their local churches.

Christian faith is being tested, and, just as the principle of mutuality in financial terms has been under severe pressure, so the bond of caring fellowship is under strain. At such a crucial time, it is vital for all in the Church ‘…to carry each other’s burdens and in this way…fulfil the law of Christ.’ (St Paul’s letter to the Galatians chapter 6, verse 2)

Rt Rev. Dr W. Donald Patton
Moderator of the Presbyterian Church in Ireland

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Richmond is a victory for hope - now let's bring change across the country

The regressives are building their armies. 

Last night a regressive alliance was toppled. Despite being backed by both Ukip and the Conservative Party, Zac Goldsmith was rejected by the voters of Richmond Park.

Make no mistake, this result will rock the Conservative party – and in particularly dent their plans for a hard and painful Brexit. They may shrug off this vote in public, but their majority is thin and their management of the post-referendum process is becoming more chaotic by the day. This is a real moment, and those of us opposing their post-truth plans must seize it.

I’m really proud of the role that the Green party played in this election. Our local parties decided to show leadership by not standing this time and urging supporters to vote instead for the candidate that stood the best chance of winning for those of us that oppose Brexit. Greens’ votes could very well be "what made the difference" in this election (we received just over 3,500 votes in 2015 and Sarah Olney’s majority is 1,872) - though we’ll never know exactly where they went. Just as importantly though, I believe that the brave decision by the local Green party fundamentally changed the tone of the election.

When I went to Richmond last weekend, I met scores of people motivated to campaign for a "progressive alliance" because they recognised that something bigger than just one by election is at stake. We made a decision to demonstrate you can do politics differently, and I think we can fairly say that was vindicated. 

There are some already attacking me for helping get one more Liberal Democrat into Parliament. Let me be very clear: the Lib Dems' role in the Coalition was appalling – propping up a Conservative government hell bent on attacking our public services and overseeing a hike in child poverty. But Labour’s record of their last time in office isn't immune from criticism either – not just because of the illegal war in Iraq but also their introduction of tuition fees, privatisation of our health service and slavish worship of the City of London. They, like the Liberal Democrats, stood at the last election on an austerity manifesto. There is a reason that we remain different parties, but that doesn’t mean we shouldn't also seize opportunities like this to unite behind what we have in common. Olney is no perfect candidate but she has pledged to fight a hard Brexit, campaign against airport expansion and push for a fair voting system – surely progressives can agree that her win takes us forward rather than backwards?

Ultimately, last night was not just defeat of a regressive alliance but a victory for hope - a victory that's sorely needed on the back of of the division, loss and insecurity that seems to have marked much of the rest of this year. The truth is that getting to this point hasn’t been an easy process – and some people, including local Green party members have had criticisms which, as a democrat, I certainly take seriously. The old politics dies hard, and a new politics is not easy to forge in the short time we have. But standing still is not an option, nor is repeating the same mistakes of the past. The regressives are building their armies and we either make our alternative work or risk the left being out of power for a generation. 

With our NHS under sustained attack, our climate change laws threatened and the increasing risk of us becoming a tax haven floating on the edge of the Atlantic, the urgent need to think differently about how we win has never been greater. 

An anti-establishment wave is washing over Britain. History teaches us that can go one of two ways. For the many people who are utterly sick of politics as usual, perhaps the idea of politicians occasionally putting aside their differences for the good of the country is likely to appeal, and might help us rebuild trust among those who feel abandoned. So it's vital that we use this moment not just to talk among ourselves about how to work together but also as another spark to start doing things differently, in every community in Britain. That means listening to people, especially those who voted for Britain to leave the EU, hearing what they’re saying and working with them to affect change. Giving people real power, not just the illusion of it.

It means looking at ways to redistribute power and money in this country like never before, and knowing that a by-election in a leafy London suburb changes nothing for the vast majority of our country.

Today let us celebrate that the government's majority is smaller, and that people have voted for a candidate who used her victory speech to say that she would "stand up for an open, tolerant, united Britain".  But tomorrow let’s get started on something far bigger - because the new politics is not just about moments it's about movements, and it will only work if nobody is left behind.

 

Caroline Lucas is the MP for Brighton Pavilion.