Banks urged to learn lessons from Nigel Farage row after NatWest boss quits
Ministers have warned banks to learn from the mistakes of NatWest, following the resignation of chief executive Dame Alison Rose.
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Your support makes all the difference.Ministers have urged banks to learn from the mistakes of NatWest in the wake of chief executive Dame Alison Rose’s resignation in a row over the closure of Nigel Farage’s Coutts account.
The former Ukip leader went on to demand the resignation of the entire NatWest board and for a “cultural change” within the industry at large after his campaign resulted in the departure of NatWest’s top banker.
NatWest Group chairman Sir Howard Davies said early on Wednesday that Dame Alison would be stepping down, after both Downing Street and the Treasury expressed their “serious concerns” about her conduct.
Dame Alison had admitted a “serious error of judgment” by discussing with a BBC journalist Mr Farage’s relationship with Coutts, owned by NatWest Group.
Mr Farage had been crusading against the private bank for shutting down his account – a decision taken in part over his political beliefs.
Sir Howard had initially said the board members had decided the chief executive retained their “full confidence”, but that position rapidly changed following the Government intervention.
Ministers were quick to welcome the departure of Dame Alison, with calls for the financial sector to take heed of the lessons of the Farage row.
A No 10 source said she had done the “right thing in resigning” and that Rishi Sunak had been “concerned about the unfolding situation”.
Shares in the lending giant fell by 3% in the wake of the resignation, with other banks also seeing their shares hit.
Dame Alison was also out of four Government roles, including losing out on her membership of the Prime Minister’s Business Council.
City minister Andrew Griffith gave the bosses of Barclays, HSBC, Nationwide, Santander and NatWest a dressing down at a virtual meeting on Wednesday morning, with David Lindberg, chief executive of NatWest’s retail banking wing, filling in for Dame Alison.
Mr Griffith made clear to the bankers it is not their job to “tell us what to think or what political party we should support” as he hit out at the termination of accounts over political views.
The bankers accepted the row had “impacted upon public trust for the whole sector” and committed to not discriminating based on lawful freedom of expression, the Treasury said.
In contrast to Mr Farage, the City minister said Sir Howard should not immediately resign as NatWest’s chairman, as he was already planning to leave, but was not clear about the positions of other members of the board and Coutts boss Peter Flavel.
Energy Secretary Grant Shapps welcomed the decision and urged banks against using the politically exposed person (PEP) risk tests, which Mr Farage blamed for his account closure.
“However, it’s equally important banks stop applying political (PEP) tests to people (and families) opening new bank accounts too,” he added.
Labour leader Sir Keir Starmer said that NatWest was in the “wrong” over the revelation of Mr Farage’s personal details and that it was right for Dame Alison to resign.
He told BBC Radio 5 Live: “I certainly don’t think anybody should be refused banking services because of their political views, whoever they are.”
Policing minister Chris Philp said a lot of MPs or their families have been turned down by banking services because of “politically exposed persons” rules, which cover anyone considered to be higher risk because of their political connection.
“The rules are set up for the right reasons but MPs quite often get caught by these PEP rules because they’re applied kind of overzealously,” he told Sky News.
I think there is a massive anti-Brexit prejudice and I think the whole thing needs to change
“It is not spoken about much but if you look at almost any MP they will have had an experience like this, I think the Nigel Farage case is an extreme one, but I’m afraid it’s not unique.”
Dame Alison’s resignation as chief executive came after an emergency board meeting was called late on Tuesday night to determine her future.
It followed days of criticism and questions for the NatWest Group, after Mr Farage presented evidence that his account at Coutts had been closed partly due to his political views conflicting with the bank’s values.
The evidence obtained from the bank through a data request contradicted a BBC News story, which initially claimed the account closure was motivated by commercial reasons only, citing Mr Farage’s failure to meet a £1 million borrowing requirement.
Dame Alison admitted discussing Mr Farage’s relationship with Coutts in a conversation with the BBC’s reporter behind the story, business editor Simon Jack.
She conceded that she confirmed the former Ukip leader was a Coutts customer, thinking it was public knowledge, and that he had been offered a NatWest account.
The boss insisted she “did not reveal any personal financial information about Mr Farage”, but admitted having left Mr Jack with the “impression that the decision to close Mr Farage’s accounts was solely a commercial one”.
Mr Farage responded by saying that the exit of Dame Alison was only “a start” and that changes need to go further.
He told the PA news agency on Wednesday: “Anybody on that board that backed that statement that was put out at 17.42 yesterday – a totally unsustainable and untrue statement – anybody that backed that behaviour should be gone.
“I think this culture runs deep through the entire banking industry. I think there is a massive anti-Brexit prejudice and I think the whole thing needs to change.
“The entire industry needs to wake up to the absolutely appalling way it has been treating people all over the country.
“We bailed these people out and in return they close our branches, they close our personal and business accounts on a huge scale. We need real change here and I am going to go on pushing for it.”
Dame Alison resigned from Government roles as co-chair of the energy efficiency taskforce and as a member of the net-zero council after being told to step down by Mr Shapps, his department said.