Chancellor Jeremy Hunt has asked the UK’s finance regulator to launch a probe into the debanking scandal he says poses a “threat” to free speech.
In a letter to the Financial Conduct Authority (FCA) on Thursday, Mr. Hunt said it needed to “urgently investigate how widespread this practice is, and put a stop to it”.
The chancellor’s intervention comes as banks face widespread reforms over account closures, after the Nigel Farage row that last week led to the resignation of the top bosses at NatWest and Coutts.
The former Ukip leader said his bank account was unfairly shut down by Coutts, owned by NatWest Group, because it did not agree with his political views.
Mr. Farage’s campaign against account closures has received support from ministers, with Mr. Hunt expressing concern over how many people are affected.
He told broadcasters: “I’m worried that it may exist more than we had thought. And the reason I’m worried is because free speech is a fundamental human right. And you can agree or disagree with Nigel Farage but everyone wants to be able to express their opinions.
“But in today’s society you need a bank account to function and so a threat to be debanked, as the word is now widely used, is a threat to your right to express your opinions.”
Mr. Hunt said the regulator has the right to fine banks “very large sums of money” if they find the practice is widespread.
Unfairly Denied Accounts
In his letter to the regulator’s chief executive Nikhil Rathi, Mr. Hunt urged him to progress the FCA review urgently, and to consider the scale and characteristics of customers affected.He also asked for information on the drivers of these decisions, what monitoring and enforcement action the FCA has taken, and the speed and the type of recourse available to customers.
“Based on these findings and in light of any steps the FCA determines it appropriate to take within its existing powers, the Government will determine whether further action is necessary to ensure nobody is being unfairly denied banking facilities,” he wrote.
Mr. Rathi confirmed the regulator has launched a review into bank account terminations.
In a letter responding to Mr. Hunt, he wrote that the Chancellor’s request of areas to cover is “in line with our plans” and “we will provide an initial assessment by mid-September.”
He said the FCA will gather data from the largest banks and building societies in the coming month on the number of account closures and the reasons for these, complaints about them and the outcomes, as well as the volume of applications refused.
Mr. Farage tweeted, “The Chancellor has written to the FCA about my case and the issue of de-banking. Thank you @Jeremy_Hunt.”
The ex-MEP this week said Coutts has offered to reinstate his personal and business accounts, while he is also seeking compensation from the private bank.
NatWest has announced an independent review, with lawyers looking at the closure of Mr. Farage’s account and other instances of debanking by Coutts.
It followed its chief executive Dame Alison Rose’s resignation after acknowledging a “serious error of judgment” by discussing with a BBC journalist Mr. Farage’s relationship with Coutts.
Turning Point
Mr. Farage, who launched a website aimed at taking on banks removing customer accounts, has received the backing of senior Tories and finance experts over the debanking debacle.The prominent group accused the FCA of attempting to force a “change in culture and diversity of thought” in banks and finance firms.
The authors also raise the FCA’s encouragement of what is known as “environmental, social, and governance,” or “ESG,” which encourages companies to act responsibly.
“It appears that the FCA has been making and applying vague rules, including those known as ‘Principles,’ which are open to varied interpretation,” the letter stated.
“There is little or no recourse to the courts or case law precedent.”
The signatories also referred to an FCA source, quoted in The Guardian, saying there was “a real sense of disquiet” inside the regulator at the departure of Dame Alison Rose.
Ms. Rose quit as chief executive of NatWest Group earlier this month after admitting to briefing a BBC journalist on details surrounding one of Mr. Farage’s bank accounts.
Private bank Coutts, which is part of NatWest, closed the former Ukip leader’s account, with a subject access request revealing his political views were a factor in the decision.
Mr. Farage’s crusade against NatWest has also led to the resignation of Coutts boss Peter Flavel. His campaign on account closures has received the backing of ministers and Tory MPs.
NatWest chairman Sir Howard Davies has resisted pressure from Mr. Farage and others to quit, insisting it is important for the bank’s stability that he remains on the board.
Announcing the launch of his new accountclosed.org website, the ex-Ukip leader told GB News that he wanted it to be “a turning point in this whole appalling behaviour from banks.”
He also told broadcasters that around 1,000 bank accounts are being closed a day.
