My Lords, my honourable friend the Financial Secretary has spoken to Stephen Hester, chief executive of the Royal Bank of Scotland, about the technical difficulties affecting both NatWest and Ulster Bank to ensure that RBS is doing everything it can to resolve these issues as quickly as possible. Social security is a devolved matter in Northern Ireland but the Social Security Agency in Northern Ireland is advising benefit customers to go directly to their local branch where funds should be available to them.
My Lords, I thank the Minister for his Answer but the fact remains that 100,000 customers of Ulster Bank are suffering chaos in their accounts affecting direct debits, benefits and pensions. This also has an effect on small businesses and suppliers. Vernon Coaker called for the Secretary of State for Northern Ireland to intervene but Owen Paterson says it is not his problem and he refuses to help. He holds the important position of Secretary of State for Northern Ireland. Does the Minister accept that this is a disgraceful situation where 100,000 customers and small businesses in Northern Ireland are facing financial disaster but receive no help from a do-nothing Secretary of State for Northern Ireland who is not fit for the job?
My Lords, I do not accept that for one minute. This is a very serious issue affecting, as the noble Lord says, 100,000 individuals in Northern Ireland and the Republic of Ireland. My right honourable friend the Secretary of State for Northern Ireland has been actively on the case. He has discussed the Ulster Bank issue with my right honourable friends the Chancellor and the Secretary of State for Business. The Minister of State for Northern Ireland has spoken to the Northern Ireland Minister of Finance and Personnel and to Sir Philip Hampton, chair of RBS, who has made commitments about the fair and proper treatment of Ulster Bank’s customers with full compensation for financial loss. Ulster Bank itself is putting out daily updates and extending branch opening hours and has a freephone number. These are very serious issues. Once the dust has settled, the FSA will be requiring a full explanation from RBS and NatWest to make sure that any necessary steps are taken so that this does not happen again.
My Lords, this morning a spokesman for Ulster Bank stated that this technical failure will not now be fixed until 16 July. This further delay, now to be some three weeks, will compound the already serious cash-flow problems businesses are encountering. Some companies are inevitably going to suffer losses. Does the Minister agree that this raises the question of compensation for consequential losses caused by the IT breakdown?
My Lords, I agree that the difficulties clearly are continuing. I looked at the Ulster Bank website. I see that it is giving daily updates of the situation and it has been completely clear that it is unlikely that it is going to be fully resolved until around 16 July. I repeat that RBS has made a commitment that no business or individual will be left permanently out of pocket as a result of this. The interpretation of that will no doubt raise the issues which the noble Lord raises.
My Lords, the situation for people in Northern Ireland is extremely serious, as my noble friend has said. The noble Lord, Lord McAvoy, has raised the question of those who get benefits, but this nationalised bank run by the Government is also failing to address the needs of those whose salaries and wages are paid in, including from the Government. A number of private sector employers are helping out their employees who find themselves in immediate financial embarrassment during this holiday season. Is there any possibility that the Government, whose own employees are failing to have their salaries and wages paid in, can help in any way in the short term?
My Lords, my noble friend makes a very good point. I do not know what arrangements are being made because, again, it is going to be principally affecting employees of the devolved Administration. But I will take that issue back. I am sure it is being thought about by my colleagues in Government but I will remind them of it.
My Lords, does not the chaos and total mess in the RBS-owned banks at the moment, which is affecting so many retail customers, just emphasise a lack of investment in back-office systems and computers in these retail banks, disadvantaging a large number of customers, at a time when we have been focusing far too much attention on what has been going on in the casino banks?
My Lords, I do not know the cause of this significant failure. The noble Baroness may be right but, as I said, the FSA expects RBS to provide it with a complete account of the issues. I welcome the fact that the chief executive of RBS, Stephen Hester, has made a commitment to a full and detailed investigation overseen by independent experts and publication of those findings. In due course, we will know what the explanation is.
My Lords, is my noble friend satisfied with the role of the FSA? Surely it is not enough for the FSA to say, “We want a report”. The FSA is supposed to satisfy itself that people with banking licences have back-up systems to prevent what has happened, which is causing not only distress to families but real damage to commerce in our country. Surely the FSA should be far more active and should be giving an explanation to the Minister for why it has allowed this to happen.
My Lords, we delude ourselves if we think that there will ever be a no-failure regime in financial regulation. Regrettably, issues will arise. We want the FSA to do what it is doing: not getting in the way but doing whatever it can to ensure that RBS solves the immediate problems. Then it will get the full explanation and, on the back of that, the lessons for all concerned, including, I am sure, the FSA, will be learnt.
My Lords, as normal banking facilities will not be available at branches of the Ulster Bank until 16 July at the earliest, and given that there are public holidays in Northern Ireland on 12 and 13 July, will the Government take steps to ensure that Ulster Bank branches remain open on those dates to enable customers to receive advice and to access banking services? I declare that I am a client of the Ulster Bank—one, I hope, of good standing.
My Lords, I am aware that 42 Ulster Bank branches have extended their opening hours until 7 pm. I am aware, because I have checked, that the availability of the freephone number, which is available until 10 o’clock at night, has been widely publicised. I am not aware of what the bank intends to do on those bank holidays, but it will have heard the question.