Ministers must take action on Ulster Bank

McAvoy4x3.jpgLord Tommy McAvoy is Labour’s shadow spokesman for Northern Ireland and Scotland in the Lords 

The perception that many people in the smaller countries and regions of the UK have, that the giant business and financial world doesn’t care about them, will have been confirmed by the Ulster Bank fiasco.

I don’t particularly agree with that sentiment –banks in particular have shown over the past few years that they are anything but responsive to public opinion anywhere. And there is now a really strong backlash against big banks, which must be heading for increased scrutiny and regulation.

Still, something has become apparent from the failure of RBS Group computer system over two weeks ago –now confirmed by the group as being caused by a software update – which left millions of Nat West, Royal Bank of Scotland and Ulster Bank customers affected.  That something is that we now know that in the case of Ulster Bank customers, third rate service from the RBS Group is the default position. In Northern Ireland the collapse of Ulster Bank computer systems has resulted in around 100,000 customers unable to pay bills or access their accounts. State benefits, tax credit payments, direct debits and salary payments have all been affected.

Similar problems have been resolved with RBS and Nat West, but not Ulster Bank. 

And the reason? 

The repairs were carried out in a sequential order based on when the Royal Bank took over a particular bank! So Royal Bank customers first, followed by Nat West and then Ulster Bank because that is how the system was set up.

It is incomprehensible why all customers can’t have equal status. The damage being done should not be underestimated. The Northern Ireland Independent Retailers Association has said there could be problems for retailers and employees as direct debits and salaries, along with payments to suppliers, are affected. As every small business knows, cash flow is essential and an interruption like this could be crucial to survival. 

RBS Group has questions to answer.  Its IT systems must be improved to remove discrimination against Northern Ireland customers. And perhaps the waiving by RBS Chief Executive Stephen Hester of this year’s bonus should be extended to the Group’s other top earners.

The other big issue is the deafening silence from the Secretary of State for Northern Ireland, Owen Paterson. Has he contacted the Royal Bank? Has he been in touch with Ulster Bank for a progress report? If so, when did he contact them? Has he made any effort to organise State benefit payments to those left without any money? Difficult to organise perhaps –but that’s what he is paid for.

Yesterday in the Commons, Shadow Northern Ireland Secretary Vernon Coaker called for a Treasury-led summit on the Ulster Bank crisis, and for the Coalition government to urgently get a grip and show some political leadership on this issue.  Northern Ireland needs a Secretary of State who can – and will – fight its corner. Mr Paterson should have been on to RBS offering assistance with IT, investigating payment alternatives for those dependent on state benefits. Instead, the public were just left on their own to manage while the he was nowhere to be seen.

All credit to Northern Ireland MPs of all parties who have sought an early meeting with RBS executives. What a pity they weren’t supported by the do-nothing Secretary of State. He was busy washing his hands of the issue saying it is the bank’s problem to resolve, showing that he is clearly not fit for the job. 

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