Nigel Farage’s Brexit revenge conspiracy theory is not what it seems

No bank is obliged to give anyone facilities if it doesn’t wish to – the same as if Farage was barred from a pub or banned from a shop, writes Sean O’Grady

You may or may not be alarmed by the news that Nigel Farage is about to leave our now sovereign nation, but according to Mr Brexit himself, that sweet irony is now a very real danger. Even as we speak, Farage may be acquiring a rubber dinghy and a satnav so that he can get across the English Channel to claim asylum in France.

Or, perhaps, not. He claims, as is his habit, to be the victim of persecution. You see, Farage has been told by his bank that they no longer want him as a customer, and no one else wants to look after his money either.

Here is his story, ICYMI: “I’ve been living with something for the last couple of months that may well fundamentally affect my future career going on from here and whether I can even stay living in this country… I got a phone call a couple of months ago to say we are closing your accounts. I asked why. No reason was given. I was told a letter would come which would explain everything. The letter came through and simply said we are closing your accounts. We want to finish it all by a date, which is around about now. I didn’t quite know what to make of it. I complained. I emailed the chairman. A lackey phoned me to say that it was a commercial decision, which I have to say, I didn’t believe for a single moment.”

“So I thought, ‘Well, there we are, I’ll have to go and find a different bank.’ I’ve been to six, no seven banks actually, and asked them all, ‘Could I have a personal and a business account?’ And the answer has been no in every single case.”

Sources close to Farage have suggested it might be to do with MI5, and there have been allegations, made under parliamentary privilege by Chris Bryant and sternly denied by Farage, that it’s all to do with Russian money. Farage has also suggested, variously, that it’s because of his campaigning for Brexit (bit late for that, surely); his radical/patriotic views; and his links to Donald Trump. To him, he’s being driven out by “The Establishment” in some vindictive woke conspiracy, and Coutts & Co, the bank that’s reportedly rejected his money, is part of the plot.

A more prosaic and believable explanation is that Coutts, and the NatWest group that owns it, regards Farage as what’s called a “politically exposed person”, or PEP, as well as an undoubtedly high net worth individual. Under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, a bank must take adequate measures to establish the source of wealth and source of funds of the PEPs on their books. This is because PEPs, being powerful or influential figures, may be subject to offers of bribes or unusually prone to other corruption and, thus, must be placed under extra vigilance and supervision by any financial institution they have dealings with (and this may also apply to family and close associates). It’s a matter of law, and it’s supposed to apply to all PEPs.

Chiefly, the rules apply to MPs, ministers, senior judges, top diplomats and the like, including MEPs, but, Farage might well claim, he’s no longer an active politician, and ceased to be an MEP on 31 January 2021, when the UK left the EU. Now, the argument goes, he’s merely an award-winning TV presenter, albeit an opinionated one. However, Farage is also president of Reform UK, which he likes to pass off as a kind of honorific role; but he is also a director of The Reform UK Party Limited. This is important because, unlike most political parties, it doesn’t have members as such or an elected national executive committee, and is in fact a corporate not a membership body. Companies House lists him as a director, and actually the sole named person with “significant control”, and the right to appoint and remove directors (including, presumably, the party leader and fellow director Richard Tice). Thus, Farage is indeed caught by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, under Section 35, paragraph 14c, which covers “members of the governing bodies of political parties”.

Hence the mysterious but apparently lawful exercise by numerous banks of “enhanced customer due diligence” over this particular politically exposed person. The banks’ problem may be more with Reform UK Limited, and Farage’s close links to it, rather than him and his opinions on Pride Month as such.

As Farage remarks, “I think the reason for it was, you know, where people in politics are open to bribery. Could foreign governments from Ukraine or China or wherever else it may be, could they be pumping money into, you know, the accounts of corrupt politicians. So I kind of understand that and get that but it’s all about interpretation, isn’t it? And what the banks argue is that to maintain an account for a politically exposed person, gives them increased costs of compliance.”

Chiefly, the rules apply to MPs, ministers, senior judges, top diplomats and the like, including MEPs, but, Farage might also well claim that the various banks involved may be unduly harsh on him, compared to others, because he gets into so many controversies. In general, these regulations can be onerous, expensive to operate and leave banks open to potentially costly risk. So they might drop someone like Farage simply because they think he’s not worth all the bother. He is not alone. Lord (Michael) Forsyth, a cabinet minister under Mrs Thatcher and not the power in the land he once was, recently complained to the House of Lords that: “My daughter had an account at the same bank as me, Coutts, and the manager said to her: ‘Is there any chance that you could move to another bank because you are such a pain to look after because your dad is a politically exposed person?’ In my view, that is an absolute disgrace.”

A disgrace? Maybe not with Farage. Even if they were to avoid Farage purely on political grounds or because they don’t like his taste in Union Jack socks, they’re free to do so because no bank is obliged to give anyone facilities if it doesn’t wish to – the same as if Farage was barred from a pub or banned from a shop. He has recently highlighted the convenient case of a vicar who got into a row with the Yorkshire Building Society about trans rights, implying he’s in the same category – but that is something of a rainbow-hued herring. Farage’s financial exclusion is about the law, not wokery.

Some banks also might think an association with Farage would not be in their wider commercial interests, because he's not the sort of bloke you'd want if you think yourself an “inclusive” brand. So they’re using the PEP rules as an excuse for jettisoning him – again that’s a matter for them. Who knows? The banks are obviously making life very difficult for Nigel, and he’s annoyed; but, equally, you can see why, from a bank’s point of view, Farage must be a bit of a pain to look after.