Concerns over ‘debanking’: Sussex MP urges watchdog to prioritise review into treatment of Politically Exposed Persons after Nigel Farage controversy

MP Andrew Griffith, who is also Economic Secretary to the Treasury and City Minister, said banks should not close people’s accounts ‘solely due to their status as a Politically Exposed Person’.

He said he wrote to the Financial Conduct Authority to ask them to prioritise a review on the issue and then published the letter on Twitter.

In the letter Mr Griffith said: “While I recognise the importance of ensuring that appropriate measures are in place to prevent money laundering, it is crucial that an appropriate balance is struck and that these measures do not unduly burden or prevent democratically elected individuals, public officials or their respective families from access to essential banking services.”

Mr Griffith’s letter to the financial watchdog comes after former Member of the European Parliament and Brexiteer Nigel Farage said his account with private bank Coutts had been closed. The BBC reported that Mr Farage was below the financial threshold needed to hold an account at the bank and that he had been offered a standard account at NatWest. However, Mr Farage said he believes his account is being shut for political reasons and on July 3 announced that he had been rejected by nine banks.

Mr Griffith said in his letter, dated July 4, that the recently passed Financial Services and Markets Act 2023 requires the FCA to conduct a review into its guidance on Politically Exposed Persons (PEPs), as well as financial institutions’ adherence to the guidance.

He added that Treasury Lords Minister Baroness Penn had written to them previously about what the review should cover.

Mr Griffith’s letter said: “It has been made clear to the Government throughout the passage of the Financial Services and Markets Act that some financial institutions may be failing to strike a balance of taking a proportionate approach based on careful evaluation of the actual risk. This is why we took action through the Act to require an FCA into the extent of this issue.

“The Government is clear that domestic PEPs should be treated in a manner which is in line with their risk and that banks should not be closing individuals’ accounts solely due to their status as a PEP. Given the strength of concern on this issue, I would expect that the FCA will prioritise this important review over the coming months.”

A HM Treasury spokesperson said: “It would be a serious concern if financial services were being denied to those exercising the right to lawful free speech. We are already looking into this issue and have passed a law that requires the FCA to review how banks treat politically exposed persons – so we can strike the right balance between the customer’s right to free speech of and the bank’s right to manage commercial risk.”

HM Treasury also said that anyone who feels they have been treated unfairly by a decision taken to close their bank account can file a complaint to the Financial Ombudsman Service.