Bank of Ireland Unopposed Bill Committee



taken before the


on the


Tuesday 13 September 2011


Mr Nigel Evans (Chair)

Michael Ellis

Mrs Mary Glindon

Craig Whittaker

MR ALASTAIR LEWIS appeared as Parliamentary Agent

MS SIOBHAN COSKERY, Senior Lawyer, Bank of Ireland Group, and MR STEPHEN MATCHETT, Chief Financial Officer, Bank of Ireland (UK) plc, appeared on behalf of the Promoters

MR PETER DAVIS, Counsel for Domestic Legislation, was also in attendance

Ordered at 2.30 pm: that Counsel and Parties be called in.

1. CHAIR: Order. Good afternoon, my name is Nigel Evans. I’m chairing the Unopposed Bill Committee today, and with us we have Michael Ellis, Craig Whittaker and Mary Glindon. Is that right, Mary?

2. MRS GLINDON: Yes, thank you Chair.

3. CHAIR: Very good. Mr Lewis, welcome. Perhaps you could introduce your team.

4. MR LEWIS: Thank you very much, sir. I’m Alastair Lewis from Sharpe Pritchard, the Parliamentary Agent for the promoters of the Bill. To my immediate right is Stephen Matchett, who is the Chief Financial Officer of the Bank of Ireland (UK) plc and sitting next to him is Siobhan Coskery, who is a senior lawyer at the Bank of Ireland Group. And Siobhan will prove the preamble to the Bill once we get to the end of the proceedings.

5. CHAIR: So Mr Lewis, perhaps you could address the Committee.

6. MR LEWIS: Thank you. I’ve prepared a short address; I won’t take too much of your time. I’d first of all like to thank you all very much for your patience, for coming back again for a second bite at the cherry, as it were. As you probably know, we had to put together a few last minute drafting amendments last time round. We wanted to make sure that it was perfected, and with the help of Mr Davis we finally got there, and also together with the agreement of the Bank of England.

7. The promoters of the Bill are the Bank of Ireland (UK) plc, which is a UKregistered public limited company and is a subsidiary of the Governor and the Company of the Bank of Ireland, which is a company registered in Ireland by Royal Charter, as it happens, some many years ago. I’ll refer to the former as "the UK Company" and the latter as "the Governor and Company". The UK Company is a bank which is authorised to take deposits in the United Kingdom and is regulated by the Financial Services Authority. It’s a single purpose Bill and it will enable the UK Company to issue banknotes in Northern Ireland in place of the Governor and Company from a day to be appointed by the UK Company.

8. Just dealing with the formalities first, the promoters of the Bill have carried out, through leading counsel, an assessment of the Bill’s compatibility with the European Convention on Human Rights. He found the Bill to be compatible, and the relevant Minister-the Economic Secretary to the Treasury-has made a report on ECHR compatibility, in which she said that she believed the promoters had undertaken a full assessment and she had no reason to dispute the conclusions that the promoters had reached. No petitions were deposited against the Bill, as you know, and there were no other Government reports apart from the Human Rights report made in respect of this Bill.

9. So why is a Private Bill needed? Well until the Financial Services and Markets Act 2000, many private bank Bills came through Parliament, usually to enable the merger of different banks or for banks to divest themselves of parts of their undertaking. The Financial Services and Markets Act 2000 took away that jurisdiction and gave it to the courts, but left behind this process that we have here today, which is the statutory transfer of the undertaking of the banks in relation to the issuing of bank notes. As the preamble to the Bill states, an order was made in the courts last October-in the High Court-which transferred a significant part of the Governor and Company’s banking undertaking to the UK Company. It has to be a Bill in this Parliament rather than the Northern Ireland Assembly because matters relating to coinage and currency are matters which have been reserved by the Northern Ireland Act for yourselves.

10. The Bank of England and the Treasury have been kept fully informed of the Bill’s progress and there has been no objection from either. In fact, at this point it’s perhaps appropriate to say that the Bank of England is supportive of the measure. They’re satisfied with the principle of the Bill because it would result in all banknote issuers in the UK being incorporated in the UK. As mentioned at the beginning, the Bank of England are now happy with the drafting of the Bill and in the filled up form that you’ve got before you.

11. By way of background, apart from the Bank of England itself, there are four banks which have the statutory power to issue banknotes in Northern Ireland. They are the Governor and Company, Northern Bank, First Trust Bank and Ulster Bank. The right of those banks to continue to issue notes was contained in part 6 of the Banking Act 2009 and the 2009 Act also modernised and updated the relevant legislation relating to the issuing of banknotes generally in both Northern Ireland and Scotland. Under the 2009 Act, a set of regulations has been made by the Treasury and a set of rules by the Bank of England. These rules and regulations make provision about a number of related matters, such as the way in which the notes are printed, stored and taken out of circulation, the amount of backing assets that must be held by the issuing banks-which of course is a matter of great importance for the Bank of England-and what happens in the event of one of the issuing banks ceasing to issue notes. Needless to say, the UK Company would be under an obligation to comply with all those relevant rules and regulations if it were to become a bank of issue under the Bill.

12. Just turning to the Bill itself, which I’ll run through briefly. Clause 1 deals with citation and commencement and you’ll note that the main operative provisions of the Bill will come into force on an appointed day-that’s a day to be appointed by the UK Company. Clause 2 deals with interpretation; there’s a list of statutory provisions contained in the definition of note issue enactments, which is probably the only one worth dwelling on. These are the existing banking enactments, which will all apply, of course, to the UK Company if the Bill is implemented. Clause 4 is the main operative provision in the Bill and, as Members of the Committee will see, it provides that from the appointed day, Governor and Company will cease to be an authorised bank for the purpose of part 6 of the Banking Act 2009 and the UK Company will become an authorised bank and hence be able to issue banknotes in Northern Ireland. There are a number of additions also to clause 4, which I’m not going to take you through in any great detail; they deal with technical aspects, all of which have been discussed with the Bank of England. And clause 5 would just apply certain parts of the rules and regulations that I mentioned earlier and which apply when a bank ceases to issue notes. And clause 6, finally, provides a saving ensuring that all relevant banking legislation remains applicable to both banks.

13. And, sir, that’s really all I was intending to say by way of introduction to the Bill. Of course, Mr Matchett, Ms Coskery and I would be happy to answer any questions that members of the Committee have.

14. CHAIR: Thank you for that presentation. Do any of your colleagues wish to add anything, or are you content with that presentation?

15. MR MATCHETT: No, nothing to add at this point.

16. CHAIR: Right. Well, I have no questions. Do any of my colleagues have any questions?

17. MR ELLIS: Could you remind me of what the date was for the transfer from the bank?

18. MR LEWIS: The transfer of the undertaking of the major part –

19. MR ELLIS: Yes.

20. MR LEWIS: It was in October last year. The exact date?

21. MS COSKERY: The court order was 29 October, and the transfer happened midnight before 1 November-so 1 November.

22. MR ELLIS: Thank you.

23. CHAIR: Thank you very much, Mr Ellis. If there are no other questions, can I thank you for answering those questions? Can I ask you to leave the room very briefly? Please do not go far because I suspect we will not detain you long.

The Committee adjourned to deliberate in private from 2.39 pm until 2.41 pm

CHAIR: Welcome back. I’m happy to tell you and your colleagues that the Committee is content with what it has heard and consequently is happy for the Bill to proceed to a Third Reading. Before we conclude proceedings today, perhaps Ms Coskery would prove the preamble.


Examined by MR LEWIS

24. MR LEWIS: Thank you, sir. Is your name Siobhan Coskery?

(Ms Coskery) Yes, it is.

25. And are you a senior lawyer at the Bank of Ireland Group?

(Ms Coskery) Yes I am.

26. Have you read the preamble to the Bill?

(Ms Coskery) I have indeed, yes.

27. And is it true?

(Ms Coskery) Yes.

28. Thank you.

The witness withdrew

29. CHAIR: Thank you for your attendance today, and for answering the one question we had, but we do now have a fuller picture of what was involved with the Bill and we will watch its progress with interest. Order, order.

The Committee adjourned at 2.42 pm

Prepared 25th October 2011