Ulster Bank Crisis
Northern Ireland Assembly Commission
3:30 pm
Francie Molloy (Sinn Féin)
Mr Phil Flanagan has given notice of a question for urgent oral answer to the Minister of Finance and Personnel.
Mr Flanagan asked the Minister of Finance and Personnel for an update on his discussions with senior management of the Ulster Bank about the ongoing crisis within that organisation.
Sammy Wilson (DUP)
I met Sir Philip Hampton, the chairman of the Royal Bank of Scotland (RBS) group, yesterday to discuss the ongoing situation in Ulster Bank and to emphasise to him directly the untold problems that the current situation is causing individuals and businesses across Northern Ireland. Those problems have been identified through my constituency work, through Members of the Assembly and through direct contact with the Department by businesses.
In particular, I relayed to him two things. First, the disappointment that, despite several public assurances about deadlines inside which the system would be fixed and normality restored, all the deadlines had been missed and no definite date had yet been fixed. Secondly, I relayed the disappointment about lack of response, at least initially, from Ulster Bank to find ways of dealing with customers’ requirements for cash.
Yesterday, I was assured by the response from Ulster Bank that a further 10 branches would be open late in the evenings to facilitate people coming home from work to get into the bank for cash, as well as at weekends. It goes without saying that I will continue to monitor the situation closely. From the first week, I have been in touch with Ulster Bank fairly regularly, and I have sought to ensure from it that everything was being done that could be done to bring the crisis to a quick conclusion.
Phil Flanagan (Sinn Féin)
Go raibh maith agat, a Phríomh-LeasCheann Comhairle. I thank the Minister for taking the time out of his busy schedule to come here and answer the question and to provide us with an update on this very important matter.
The level of discontent among wider society from all levels of the community about the ongoing crisis in Ulster Bank is palpable. From listening to any media programme, you get the sense of anger and frustration that exists. Perhaps the Minister will be happy to hear that the Assembly’s Statutory Committee for Enterprise, Trade and Investment is due to have representatives from Ulster Bank appear before it on Thursday morning. We as a Committee will be able to keep up that level of engagement with the bank.
Phil Flanagan (Sinn Féin)
As part of his discussions with the chairman of RBS, did the Minister receive any information on when the group expects this debacle to be resolved? Does he have any plans to keep up that level of engagement in the coming days and week?
Sammy Wilson (DUP)
I have plans to continue to engage with Ulster Bank. Over the past two weeks, I have received a number of assurances on when the situation will be resolved. The one point that I made to Sir Philip yesterday was that I believe that the bank has probably done itself some damage, as well as increasing problems for individuals through its drip-feed approach. The bank initially said that the problem would be fixed by Monday, then on Monday that it would be fixed by Friday, and on Friday that it would be fixed by next week. It might have been better for the bank to have been up front and say that it would take two or three weeks to sort out.
I have to say to the Member and to the Assembly that, even after the conversation with Sir Philip, I am still not clear as to when the problem will be sorted. It will certainly not be sorted this week; they have made that clear. They are talking about next week, although they would not say whether that was the beginning or the middle of the week, simply that they hoped — they hoped — to have it resolved by next week.
Francie Molloy (Sinn Féin)
As Mr Stewart Dickson tabled a similar question, I call him to ask a supplementary question. I will then move to the other names on the speaking list.
Stewart Dickson (Alliance)
I thank the Minister for coming to the House and speaking to us today on the matter. Minister, you met Sir Philip Hampton yesterday, and he gave you information. What demands did you make of him to keep customers informed? I am a customer of the Ulster Bank, and I speak on behalf of hundreds of thousands across Northern Ireland and, indeed, in the Republic of Ireland. Exactly what demands did you make of him to resolve the debacle? Many people are highly distressed. Have you made arrangements to speak to the chancellor of the exchequer is the government's chief financial..." class="glossary">Chancellor of the Exchequer and the Minister of Finance in the Republic of Ireland to see what can be done about this disgraceful banking mess?
Sammy Wilson (DUP)
I want to inject one word of caution into the debate. This is a technical issue. I got into trouble on ‘Talkback’ today for calling those who have to fix this, “geeks”. Of course, it is the computer buffs who have to get this sorted out. It was meant in the best possible way, and it was not a derogatory term. I have to make it clear that all of the jumping up and down by the Finance Minister in the Assembly or intervention by the Chancellor or the Finance Minister in the Republic will not resolve what is, basically, a technical issue.
The Member wanted to know what I asked of Sir Philip. I asked Sir Philip three things. First, I asked him to at least be honest with people if it was going to take some time and, if it is going to take two or three weeks, or whatever it happens to be, let people know. In that way, they can make some preparation and will have some foresight as to what problems are likely to happen. For example, many people thought that it was going to be sorted out before the end of the month, so they were not too concerned about their pay being put into the bank. Of course, they found that that did not happen.
Secondly, I asked for the bank to do what it could to facilitate customers in the interim period. For example, if they had to manually withdraw cash, they could get into banks during non-working hours, etc. That is a big logistical problem, and it means big demands on the staff of the bank.
Thirdly, I asked him whether, if there was a failure in the system — I did not ask him to explain what the failure was because I would probably not have understood the answer anyway — they have identified how that failure occurred and what investment will be required to make sure that it does not occur again. The one thing that customers of the bank will be concerned about is this: if it could happen once, could it happen again? From the point of view of customer confidence and for the long-term interest of the Ulster Bank, it needs to assure customers that it is prepared to invest money to address the problem that it has encountered.
One other question that I asked is this, and I am sure that Members have heard this from people who have been affected: what happens if payments have not been made and my credit ratings are affected? What does Ulster Bank intend to do to ensure that I am not disadvantaged when it comes to future loans because of the impact on my credit rating due to direct debits not being paid? I have been given the assurance that Ulster Bank will make contact and will work with the credit agencies to ensure that it is made clear that any problems are the fault of the Ulster Bank and not the fault of the customer.
Daithí McKay (Sinn Féin)
Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for his answers so far. What further steps can he take to ensure that the local community here is given equal priority to other customers in the Ulster Bank, the Royal Bank of Scotland and Nat West? Customers here are not second class or third class, and they should never have been left at the back of the queue, as they have been in this case.
Sammy Wilson (DUP)
It was not just with Sir Philip that I raised this yesterday. In the very first conversation I had about this issue with Ian Jordan of Ulster Bank, which was now nearly two weeks ago, I asked the very question that the Member has asked: are we being treated as second-class citizens? Is Ulster Bank simply regarded by RBS as an annex that will, therefore, be treated eventually? I have been assured that there are reasons for the sequence. I can only take the assurances that Ulster Bank and RBS have given me. The reason for the sequencing is nothing to do with priorities as regards who its most important customers are or what its most important market is. The system failed in a certain way and in a certain sequence and had to be repaired in a certain sequence. Since Ulster Bank is at the end of that sequence, it will be the last to be dealt with. Because it is the last to be dealt with, a bigger backlog of transactions has built up in Ulster Bank. As I understand it — this is how it was explained to me — at present, the design of the system finds it difficult to accept any transactions that are historic rather than current. Therefore, since those transactions will not be accepted automatically, they have to be fed in. The system has to be persuaded to take them. That is why it is a slow job. If you do it too fast, the system will break down again. It is a slow job. Of course, while historic transactions are slowly being put into the system, more transactions are building up because of direct debits, payments and demands for money coming in. That is why it has taken so much time. It is also one of the reasons why Ulster Bank says it cannot give me a time for when the backlog of transactions will be put on the system so that it can start operating smoothly again.
Alastair Ross (DUP)
The Minister will be aware that there has been substantial speculation that one issue is that the RBS system was hacked into. Was the Minister able to raise that with Sir Philip at the meeting yesterday? Given that the issues in RBS and NatWest have largely been resolved and we have been told that it could be several weeks before the Ulster Bank issues are resolved, is the Minister confident that they actually have found what the glitch in the computer system was and that that has now been resolved? Is he confident that Ulster Bank is not trying to hide the fact that it still does not know what the issue is?
Sammy Wilson (DUP)
Again, I am no computer expert. I can only take the assurances that I have been given by RBS. Yesterday, we went through a range of scenarios as to what the possible causes could be. Of course there has been speculation as to where and how the problem originated. I have been assured by RBS that it knows what the problem is and knows that the system is going to have to be changed to fix the problem and ensure that it does not happen in the future. RBS said that that will cost a fairly hefty sum of money. It is prepared to put the investment into the system to ensure that, now that it has spotted the problem, it is fixed and there will not be a repeat. However, that will not be done immediately. Adjustments and technical specifications are required to change the system.
Leslie Cree (UUP)
I thank the Minister for coming to answer questions on a problem that is not of his making. The Minister referred to speculation. I wonder whether he has heard the speculation that the breakdown in software followed an outsourcing of the bank’s IT function to India. Will he perhaps comment on that?
Sammy Wilson (DUP)
As I indicated in an earlier answer, we went through a number of scenarios. That was one of the scenarios. I have been assured that that is not the case. Speculation about anything to do with banking and a loss of confidence and trust are very, very damaging. I am not holding up the torch for any particular bank, but we have a fragile enough banking system in Northern Ireland without unfounded speculation making that worse and reducing confidence. We have discussed problems with the banking system in this Assembly time and time again. It is important to our economy, but it is not working properly at present. This is another blow to that, and I do not think that we should make it any worse by simply repeating or giving credence or currency to rumours, which can damage the system further.
Steven Agnew (Green)
Obviously, the Assembly is not responsible for banking, but we are responsible to individuals and businesses in Northern Ireland. In that regard, what discussions has the Minister had with the Chancellor to ensure that we have contingency measures so that we can act quickly in the future if there are further banking crises?
Sammy Wilson (DUP)
Over the past number of months in the Assembly, I have said that I have met Treasury Ministers and I have met the head of the Bank of England. I spoke to Hugo Swire today about the issue and I am meeting the Treasury Minister again tomorrow. There is continual engagement with government. My main concern in the long term is about how we get a banking structure in Northern Ireland that is competitive and gives people choice. If people do not get the service that they want from one bank, or they cannot get the money that they want from one bank, they have an option of alternative sources of finance. That is what we need to get our economy working properly again. There is no easy answer to that. We have seen that even the Treasury in England does not have a great deal of control over banks that they have poured billions into, but it is something that, as a country, and not just as a region, we have to grapple with, because, without a functioning banking system, we will not have a functioning economy.
Go raibh maith agat, a Phríomh-LeasCheann Comhairle. Caithfidh mé a rá go molaim go hard an tseirbhís oideachais atá a chur ar fáil do pháistí scoile ag an bhun-leibhéal agus ag an mheán-leibhéal sa Tionól. Ba mhaith liom a fhiafraí den bhall den Choimisiún, i gcomhthéacs an mhéid a dúirt sé faoi Ghaelscoileanna, cad é an dul chun cinn atá déanta ag an Choimisiún ó thaobh polasaí Gaeilge don Tionól a fhorbairt. I welcome the fact that we have the opportunity to discuss this today. I put it down as a Matter of the Day on 25 June, but, apparently, it was not considered to be urgent then, so how times have changed. I would like to begin by condemning the armed robbery of the Ulster Bank in Castlewellan today and the trauma that the customers and staff had to endure. No less than yourself, Mr speaker is in charge of proceedings of the House of Commons in..." class="glossary">Deputy Speaker, I condemn all bank robberies, whether it is the Northern Bank, the Ulster Bank or whatever.
Anyway, to get back to the point in question, I welcome the fact that SDLP MPs and DUP MPs are meeting the senior management of RBS tomorrow in London. Did the Minister raise the possibility of compensation for individuals and companies who have suffered a direct loss due to the crisis in the Ulster Bank?
Francie Molloy (Sinn Féin)
I think, Mr Bradley, we need to make sure that the Speaker’s Office is not drawn into your commentary on political exploitation. The commentary that you are just after making I do not understand, but I want to make sure that you do not include me in that commentary.
Sammy Wilson (DUP)
Sorry, Mr speaker is in charge of proceedings of the House of Commons in..." class="glossary">Deputy Speaker, I thought that you wanted to get a response from the Member on that. The Member was obviously a prophet when he put down the discussion as a Matter of the Day, and it was not regarded as urgent at that stage. It has acquired an urgency, and he has been unusually far-seeing on this occasion. On other occasions, I have accused him of not being in touch, but he has been in touch on this one.
I raised the issue of compensation at a very early stage because it was clear that costs were being incurred by people who found that they could not withdraw money, and businesses are being affected on a daily basis. I have been told that some businesses are hitting liquidity problems. Because of that, they cannot get supplies, and, because they cannot get supplies, it is affecting their business. I have to be honest with the Member: I do not have any clear indication from the Ulster Bank as to how it intends to deal with that.
It has done two things. It has said that it will reimburse individuals for direct costs. By that, I think that it means charges as a result of direct debits not being paid. Beyond that, what compensation will be made available in cases in which there has been what could be called a subjective assessment of the damage done to a business and, indeed, in cases in which third parties — I raised this — have been affected by the inability of others to make payments to them? The answer I have been given is that the bank will have to look at those issues, and criteria will have to be drawn up. However, that is not a priority for the bank at the moment. Its priority is to get the system up and running.
I have absolutely no doubt that, once this situation is sorted out, the next range of discussions and the next blow to hit the Ulster Bank will be when people start to come forward with stories of the damage done to them as a result of what is happening at present.