To ask His Majesty’s Government, in light of the recent assurances from the Economic Secretary to the Treasury, what action they intend to take to ensure that no person’s bank account should be closed for political reasons.
My Lords, I beg leave to ask a Question of which I have given private notice. In asking this Question, I declare that I have a bank account with NatWest.
My Lords, the Government unequivocally support the right to lawful free speech and consider it unacceptable for banks or other payment service providers to terminate contracts on these grounds. Earlier this year, the Government launched a call for evidence which included questions on the issue of payment account terminations and freedom of expression. We will soon set out plans for enhanced requirements applying to the termination of payment accounts.
My Lords, I am grateful to my noble friend for confirming that it is the Government’s view that no bank account should be closed for political reasons. Does she therefore agree that it is not for a bank to judge whether someone’s personal or political views accord with the so-called “values” of the bank and that that is not a reason for closing an account? Equally, does she agree that it is not for a bank to judge whether someone’s views are out of tone with wider society and then use that as the pretext for closing an account? Is this not a fundamental issue which ought to concern everyone of every party—left, right, centre or flat earth—who might all be the next person to suffer under what is happening? Will my noble friend ensure that the number of cases that have been reported recently, which, prima facie, seem to indicate that accounts may have been closed for political reasons, are referred to the regulator and investigated? Will she confirm that this a fundamental right of free speech in a free society?
I absolutely agree with my noble friend and reiterate once again that the Government unequivocally support the right to lawful free speech and consider it completely unacceptable for banks or other payment service providers to terminate contracts on these grounds. We issued a call for evidence that covered these issues and will consider all evidence as part of that. As my noble friend noted, I am sure that the regulator will also want to consider these matters.
My Lords, does the noble Baroness agree that part of the problem is that her department and the FCA were very slow to take action against the banks for the unwarranted interference in parliamentarians’ lives because they failed to operate the guidelines on PEPs appropriately and proportionately? Can we expect to see the FCA take disciplinary action against the banks that are doing this?
My Lords, it is important to distinguish between any action that may have been taken on freedom of speech grounds, or on the grounds of people’s political views, and the PEP regulations, which are to do with people’s status as politically exposed persons. However, the noble Lord is right, and we have discussed this issue in the House many times: the banks have not always applied those regulations and guidance as they should. That is why we had two amendments to the Financial Services and Markets Act to take action in this area, both to amend the regulations and for the FCA to review its guidance and the banks’ adherence to it. My right honourable friend the Economic Secretary has written to the FCA again recently to reiterate the importance of that review and to say that, if any action can be taken during the conduct of that review, we will expect that to happen also.
My Lords, I declare an interest as the chairman of a bank. I also have an account with Coutts Bank—although, by the way, I have nothing like the wealth that has been mentioned. I point out to my noble friend that Coutts Bank is owned by NatWest, and the largest shareholder in NatWest by a long way is the Government. Should the Government, as a shareholder, not say to NatWest that this kind of conduct is unacceptable? Also, what is the FCA doing? On the basis of what we read in the newspapers, Coutts Bank has been in breach of rule 4, which requires it to treat customers fairly.
My Lords, as my noble friend has noted, the Government have a shareholding in NatWest Group, but it is managed at arm’s length and on a commercial basis by UK Government Investments and I do think that is the right approach. My noble friend also noted the role of the FCA. He is right that it is for the FCA and other relevant independent bodies to determine whether any breach of regulatory requirements has taken place—so I will not comment on that, but I would expect them to do so.
My Lords, I gently suggest to the Minister that the issue of PEPs and the issue of people expressing their political views and then being treated badly are in fact entangled one with the other. I am just outraged that Nigel Farage was denied a bank account, but I was also denied a bank account at Chase UK this year because I could not produce physical payslips for my husband, who died 17 years ago. That had to be a specious reason, and I suspect that the real reason is that I am a Liberal Democrat who speaks out on issues in a way that the bank does not particularly like.
So I will just say that the PEP regime has got completely out of hand. It has been outsourced to consultants who make their money from dire and irrational interpretations. Will the Government please press the FCA not just to renew sensible guidance but to make sure that it is followed? Could she please tell it to focus its energies on the real abusers and the real money launderers?
Well, I can reassure the noble Baroness that that is exactly what the amendment to the Financial Services and Markets Act requires the FCA to do. It should look not just at the appropriateness of the guidance but at firms’ adherence to that guidance. We have asked it to get feedback from those who are affected by this guidance and take particular account of the impact on family members, which is an issue that many noble Lords have raised with me. We expect the FCA to follow that rigorously. The FCA is required to provide an update to this House on the progress of that work within a few months of it starting, and I am sure noble Lords will pay close attention to that.
My Lords, I know it is customary for children to blame their parents for everything, but will the Minister extend her concern to credit cards? My daughter, who is a very modest earner and has had the same credit card provider for 20 years, is being investigated in depth, with every piece of financial information needing to be produced, and we can think of no reason other than that I am her mother.
The changes to the regulations that the Government are committed to and the review by the FCA do not just cover banks; they cover the provision of credit cards and all other services that are covered by the anti-money laundering regulations relating to politically exposed persons.
My Lords, on at least two occasions Lords Ministers have indicated that the complete integrity of the money-laundering regulations is more important than facilitating the export of armoured fighting vehicles to Ukraine, even under export licence. In the light of what has happened recently, will the Minister agree either that this matter will be reviewed or to have a further meeting with me?
My Lords, I am not sure that events recently pertain to the particular case raised by the noble Lord. I was pleased to meet with him and as I committed to then and commit to on an ongoing basis, we will continue to engage with the Ministry of Defence to ensure that we have an understanding of the issue and that people do not face a wider systemic barrier.
My Lords, I declare my interest as chairman of C Hoare & Co. Does the Minister agree that customer confidentiality should lie at the heart of banking, and that a bank apparently commenting on the income and wealth of a customer is completely unacceptable?