It should be “completely unacceptable” for banks to close accounts on “political grounds”, a Home Office minister has said, as Conservatives weighed in on a so-called freedom of speech row prompted by claims from Nigel Farage.
Tom Tugendhat, the security minister, was speaking in parliament after the culture secretary, Lucy Frazer, urged regulators to take action against banks that shut off access to people with controversial views.
Farage, the former Brexit party and Ukip leader who is now a presenter on GB News, claimed last week that he was considering leaving Britain because he had been told by his bank that his accounts were being shut down.
While he said that the bank had given no reason, he believed it was due to his being designated in the past as a politically exposed person (PEP). These are typically political representatives, and their family members, whose accounts can be treated with extra due diligence by financial institutions.
Farage, who has appeared in the past on Russia Today, also claimed it was because it had been claimed in the House of Commons that he had been in receipt of payments by Russia.
Tugendhat was answering questions in parliament, where the former cabinet minister David Davis said Farage was “only the latest of a number of people to have their lives wrecked” by the PEP regulation.
“PEP is there to prevent the corrupt use of banking facilities by politicians in corrupt regimes,” said Tugendhat. “It is not here to silence individuals who may hold views with which we may or may not agree.
“Such a closure on political grounds, if that is indeed what has happened – after all, we have only the allegation of it at this point – should, therefore, be completely unacceptable.”
The Treasury confirmed on Monday that it was already reviewing whether banks were blacklisting customers with controversial political views. Under the new Financial Services and Markets Act, which gained royal assent last week, the City regulator will be looking at how banks deal with PEPs. That review will take place within the next 12 months.
A 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 and the bank’s right to manage commercial risk.”
A government minister met Farage and offered him guidance on how to respond to an alleged move by his bank to close down his bank accounts, the Guardian understands.
The City minister, Andrew Griffith, met Farage some months ago after a request and offered guidance on “avenues of redress”.
The government first started consulting on freedom of expression and the provision of payment services earlier this year after it was contacted by the Free Speech Union, the campaign group set up by Toby Young, which said it was concerned about financial services being denied to some people.
Frazer told LBC on Monday that she was “quite concerned that people’s bank accounts might be closed for the wrong reasons”.
Charles Walker, the chair of the Commons public administration committee, told BBC Radio 4’s World at One that he knew of MPs and their family members who had had their bank accounts closed with little notice and without given reasons. This included serving MPs who, he said, were having difficulty opening accounts or getting loans.