So the Mediterranean is on fire, the Ukraine war not going well, the health service on its knees and the economy still at risk of recession. Pretty obviously, therefore, the most pressing question facing Britain today is whether Nigel Farage can keep an account with one of this country’s poshest banks – which is making profits at the high end of a sector that has looked the other way while the cost of living crisis has blighted the lives of millions.
To be absolutely clear, no bank should deny an account to a customer because of their lawful politics. That’s a no-brainer civil liberty issue, even in the case of a millionaire like the former Ukip leader. If that is definitively what happened between Coutts bank and Farage, it was wrong.
It’s also a truly scary financial sanction to be invoked by a banking system so dominated by pitiless credit-rating algorithms. Nor should the bank’s boss have briefed the BBC’s business editor in such a misleading way about anyone, especially a customer. Alison Rose was right to resign in the early hours of Wednesday morning.
But this is hardly the end of the matter. Indeed, it is really only the start of it. For one thing, even an apparently open-and-shut issue such as this is hard to separate from the complicated morass of blind eye-turning and moral relativism that marks the banking sector generally. Bank leaders who met Treasury ministers on Wednesday expressed concern that the Farage affair had damaged public trust in the banks. Yet the bar for that could hardly be set lower than it is today.
Perhaps ground zero here is that Britain’s banks spent decades laundering the finances of some of the most disreputable clients on the planet. Some of these plundered billions from countries and populations that will struggle to recover for generations, even if they ever get the chance. It took years before the stable door was even partly shut, and it is still on the latch at best.
Or perhaps the problem is that London remains a global hub of a tax avoidance industry that deprives this country of billions in tax revenues. In the end, though, it is surely because, when the banks started going bust in 2008, the UK bailed them out and passed the bill on to UK taxpayers in the shape of an austerity programme that still blights lives and life-chances.
To work up an indignant head of steam about Farage’s treatment by the private bank once known as the “Queen’s bank”, as so many have done this month, simply feels misdirected unless it is situated within a far wider sense of outrage. It’s not that the former Ukip leader hasn’t been badly treated. He has. It’s that he is a passing minnow in an ocean of plundering sharks.
Banking at this level is a netherworld. But it is one in which John Maynard Keynes’s remark that if you owe the bank £100, you have a problem, but if you owe the bank £1m, the bank has the problem, sets the rules. These are not the rules by which the rest of us live.
Then we come to the role of government. As the hue and cry on Farage’s behalf has mounted, politicians have become increasingly involved. What started out as a spat has gradually sucked the government in more deeply.
Part of that, do not forget, is because the NatWest Group, which owns Coutts, is still 38.6% owned by the government, which bailed out Royal Bank of Scotland, now part of NatWest, during the financial crisis in 2008. The UK state therefore has a direct interest in NatWest’s financial and reputational fortunes.
That is one reason why the pivotal role played by Downing Street and the Treasury in forcing Rose’s resignation is unusual. Another is that Rishi Sunak and Jeremy Hunt lead a party and government that are temperamentally and ideologically reluctant to intervene in bank matters. And no wonder. The warning to NatWest was promptly followed by a sharp fall in the group’s share price on Wednesday, diminishing the government’s – and thus yours and my – assets. Nice work, prime minister.
Ordinarily, Sunak and Hunt would never allow themselves to be drawn into expressing concerns about NatWest, even on background terms. That ministers would brief against Rose as they did this week, with one minister saying the whole group board had to go, would previously have been unthinkable. Their predecessors never called in the banks for a reprimand over the mis-selling of PPI a generation ago, even though this was far more serious and consequential for many more people than Farage’s “debanking”.
This week’s events reflect a change in the Tory party. Sunak may sound like an orthodox Tory of the old school. But the Conservative party can no longer be glibly categorised as the voice of big business. It is only five years since Boris Johnson’s “fuck business” outburst against bosses worried about Brexit terms, and four since the Tory party’s “red wall” captures from Labour changed the nature of the parliamentary party. Today, biting the hand that once fed the Tories is no longer off the agenda, even for Sunak.
Underpinning all of this, though, is Brexit. This week’s row wouldn’t have happened at all, let alone at the volume it did, if the bank’s victim had been a remainer like Gary Lineker or Delia Smith, let alone Keir Starmer. If one of these had been debanked, rather than Farage, everything would have been very different. The whole focus would have been on their ill-gotten riches, their hypocrisy for banking with Coutts. There would have been gloating at their fall, not the fury that was voiced on Farage’s behalf.
In fact, almost the only person who could have generated and sustained this episode in this way was Farage. Much of the Tory party lives in fear of his revival. Preventing it from happening remains a live concern for them. Still the most important and most self-advertising leaver in the land, Johnson apart, he was the ideal phoney martyr in a supposed plot hatched by a City of London banking giant seen in leaver circles as part of an establishment conspiracy to undermine Brexit.
In this realm of paranoid victimhood, the City, still struggling in the post-Brexit world and losing out to Amsterdam, Frankfurt and Paris, is seen as a fundamental part of that establishment. That Rose briefed her anti-Farage story to the BBC fed it even further. It was a foolish thing to do. But it is only in the minds of Brexiters that this error says anything relevant about the real problems facing the millions who have never crossed the threshold of a branch of Coutts in their lives, and probably never will.
Martin Kettle is a Guardian columnist
• This article was amended on 27 July 2023. An earlier version referred to the mis-selling of “Peps” (personal equity plans) when the intended reference was to PPI (payment protection insurance).
