Nigel Farage has made accusations about why Coutts bank closed his account.
Nigel Farage publicly slammed Coutts bank after it shut down his accounts with them – and it has spiralled into a much larger public debate.
The Brexiteer has alleged that the bank “exited” him because of his personal politics, a claim Coutts – a private bank linked to high net work individuals – has denied.
The incident has prompted wider queries about the crossover between freedom of speech and financial services, and the Treasury is expected to get involved, too.
Here’s what you need to know to catch you up.
What has Nigel Farage alleged about Coutts?
Farage – a former MEP, one-time UKIP leader, and ex-Brexit Party leader – told Sky News that he believes his views did not align with the bank’s “values”, and that’s why his account was closed.
Speaking on Wednesday, he said this claim was backed up by a 40-page “prejudiced and nasty” document created by the “metropolitan elite” to explain its decision.
Farage said the bank “exited” him because he is seen as “xenophobic and racist” and a former “fascist”.
He also alleged he was taken aback by the “vitriol” in the document and called for UK laws to change so individuals are always able to open a bank account.
He told BBC Radio 4′s World at One earlier this week that the document also mentioned Brexit and his supposed links to Russia, saying: “Apparently I’m a risk to them. I have virtually no links of any kind to Russia whatsoever. This is political. There is no other way of looking at it.”
The Brexiteer said the bank saw him as a PEP (politically exposed person), meaning someone who has or still does hold public office and so could be vulnerable to bribery or corruption.
Farage claims that 10 banks have now refused to open an account in his name, meaning he could effectively become “a non person”without a method of banking.
The BBC has previously reported that Farage actually below the financial threshold for an account with Coutts, but the ex-MEP accused the BBC of falling for “spin” on Wednesday. He called for the broadcaster to apologise, and said he would be making a complaint.
“For them to try subsequently to pretend that it’s for commercial reasons just is not true,” he said.
What has Coutts claimed?
In a statement released on Thursday, the bank said it does not close customer accounts “solely on the basis of legally political and personal views”.
A spokesperson said there was “substantial interest” in Farage’s case, but said it couldn’t offer any details because of customer confidentiality obligations.
The statement read: “It is not Coutts’ policy to close customer accounts solely on the basis of legally held political and personal views.
“Decisions to close an account are not taken lightly and involve a number of factors including commercial viability, reputational considerations and legal and regulatory requirements.
“We recognise the critical importance of access to banking. When it became clear that our client was unable to secure banking facilities elsewhere, and as he has confirmed publicly, he was offered alternative banking facilities with NatWest. That offer stands.
“We understand the public concern that the processes for ending a customer relationship, and how that is communicated, are not sufficiently transparent.”
The bank said it welcomed the Treasury’s expected recommendations.
What was in the Coutts’ document about Farage?
The document, published in the Mail, reviewed Farage’s suitability.
It claimed he had a mortgage with Coutts which was due to expire in July 2023 – and the bank would not be renewing it.
It says the decision to “exit” Farage coincides with the expiry of that mortgage.
It stated the committed didn’t think banking with Farage was “compatible with Coutts given his publicly-stated views that were at odds with our position as an inclusive organisation”.
It said Farage would “perceive a decision to exit him as unfair” and that “he would almost certainly use his public platform to communicate his dissatisfaction”, although the “the media consequences” would be “unknown”.
Economist Frances Coppola told BBC Newsnight after reading the report: “The report makes it clear that the reason they closed the account was that Nigel paid off his mortgage and the house was released as a security and that brought him below the criteria for an account at that bank.”
What do we need to know about Coutts?
Coutts is owned by NatWest. It says customers have to borrow or invest £1 million or have £3 million in savings.
Farage has not disputed that he does not meet this threshold, but said the bank hadn’t had a problem with this for the last decade.
Coutts also lists members of the Royal Family among its clients.
How has parliament responded?
Former cabinet minister Sir Jacob Rees-Mogg have called for an inquiry into the incident, while former Brexit secretary David Davis said Coutts’ actions were akin to “political discrimination”.
Davis also said the bank was lying about the “commercial viability” of Farage’s accounts in anonymous briefings to the BBC.
Speaking to the prime minister at PMQs on Wednesday, he asked: “Can he require every bank with a British banking licence to inform the Treasury of all the accounts shut down for non-commercial reasons?”
Rishi Sunak said financial services should not be denied to anyone “exercising their right to lawful free speech” and that his government would “crack down on this practice”.
Home secretary Suella Braverman said that it “exposes the sinister nature of much of the diversity, equity and inclusion industry”, adding: “NatWest and other corporates who have naively adopted this politically biased dogma need a major rethink.”
The Treasury is preparing to force banks to give customers three months’ notice before they shut their accounts, and offer a full explanation.
The government is considering new legislation which could see banks lose their licence if they close accounts just because of a customer’s political beliefs, according to reports in The Telegraph.
How has the FCA responded?
The Financial Conduct Authority (FCA), is a financial services regulator. Its chair, Ashley Alder, said he was not “aware” of any regulatory rules which would mean Farage should have lost his account with Coutts.
Speaking to MPs on the Treasury Select Committee on Wednesday, he said it was “fundamentally” up to banks to decide on their clients, but firms “must treat people fairly”.
“Reputational considerations about who you take on as a customer are frequently cited in financial services industry, across investment banks right through to retail,”Alder said.
The FCA chief executive, Nikhil Rathi, said a regulator would be carrying out a review into PEP so those rules are applied proportionally by banks.
FCA also said it is speaking to Natwest about the issue, and that anyone who felt they were not being treated fairly can complain to the financial ombudsman service.
