Software that has 'millennium bug' still on sale

COMPUTER systems that will crash at the end of next year are still being sold by manufacturers and retailers, the banks warned yesterday.

The British Bankers' Association, which represents 300 banks from 60 countries operating in Britain, told the Commons Science and Technology Committee that banks were spending about pounds 1bn tackling the "millennium bug".

The "bug" problem is caused by computers that have not been programmed to recognised the two-digit year 00 as 2000, but will revert to 1900. Because many programs are "buried", and because many networks are inter- dependent, any system breakdowns could create unknown domino effects.

In evidence to the select committee yesterday, officials from the Health and Safety Executive said there was no major hazard risk from any of the critical areas for which they were responsible - nuclear, chemical, offshore oil, mines and railways. But the banks appeared much more concerned about the scale of the commercial threat.

"New systems continue to be supplied by manufacturers and retailers which are non-compliant [with 2000]," the association said in written evidence. "These include some which may purport to be compliant.

"At a time when there is pressure on businesses to act, it is vital that those who choose to replace their hardware and software are given unambiguous compliance information about what they are buying as replacements."

It then called on the Government to make it illegal to sell computer equipment that could not cope with the date-change, saying: "The imminence of year 2000 means that non-compliant systems supplied now ought to be declared unfit for their purpose under the law."

The association also said it was concerned that some smaller software houses, which did not have the staff to cope with remedial work, would simply choose to go out of business rather than face legal liability.

As for contingency plans, the banks hinted that they could be left with a pen-and-paper fail-safe - which "could be a huge operation". They warned: "If the problem is not solved in the core national payment systems, it would mean that the vast majority of salaries, pensions and other direct debits/standing orders would not be paid."

At current levels of business, inter-bank payments systems dealt with the equivalent of a year's national product every six days, and any payments breakdown could trigger a chain reaction of business failures.

Their memorandum said: "Banks are co-operating to ensure business customers are taking the necessary action because they recognise that the failure of one bank's customer could disrupt or bring down the customers of other banks, leading to losses for all."