City Minister Andrew Griffith said the new account closure rules will bring “oxygen and transparency to these decisions.” Photo: HENRY NICOLLS/REUTERS
Ministers are drawing up plans to extend new rules for closing bank accounts to businesses as the government tightens its crackdown on creditors who freeze accounts because of the personal views of customers.
The Telegraph understands that Treasury Department officials are weighing proposals that would require banks to notify some business account holders of termination at least 90 days in advance and clearly explain why accounts are being closed.
New measures announced last week by City Minister Andrew Griffith only apply to personal bank accounts.
However, it is understood that the government is exploring how it could also extend the new rules to small business bank accounts amid concerns that some businesses also suffered from an unfair closure.
Tina McKenzie, head of policy for the Federation of Small Businesses (FSB), said the trade body was told of “several small business owners who have found themselves confused and, in some cases, have experienced significant business difficulties because their banking the account was closed on short notice and with no clear explanation.”
She added: “There is clearly a need for both more transparency and a way to quantify how many small business customers have been affected.
Speaking to the UK news, Mr Griffiths said he had a “similar case” in his own constituency involving “a business that has been with the same institution for a quarter of a century and then suddenly received a letter out of the blue '.
He added: “That's one of the reasons a lot of the focus in what we're trying to do is to bring oxygen and transparency to how these decisions are made and on what basis, and I think that's a good thing.” be it clients or business. something to strive for.”
Nigel Farage's bank account story
Last week, Mr. Griffith summoned bank heads to the Treasury Department to demand that banks respect free speech following a spat between Nigel Farage and NatWest over closing accounts Brexit supporters. .
After the meeting, the finance ministry said the bank's management “recognized that recent events have affected public confidence in the entire sector and expressed their clear commitment to the government's policy to close accounts and act quickly to restore confidence.”
They are also committed to “the principle of non-discrimination based on legitimate freedom of expression” to rapidly improve their policies in this area and to do so before the adoption of new government policies “where possible”.
This comes after The Telegraph reported that Mr Farage's bank accounts were closed after NatWest's Coutts decided his views were “not aligned with our values.”
The Committee on reputational risks decided to close the bank accounts of Mr. Farage. personal and business accounts at Coutts after reviewing a dossier that concluded that his views were not “compatible with Coutts.”
Alison Rose stepped down as CEO of NatWest following the “debanking” scandal. Photo: Holly Adams/Bloomberg
The dispute led to the resignations of Peter Flavel, Coutts boss, and Dame Alison Rose, chief executive of NatWest, after the latter leaked incorrect information to the BBC about why Coutts closed Mr Farage's accounts.
Sir Howard Davies, Chairman of NatWest, vowed to continue his work despite pressure from investors to step down after initially backing Dame Alison to keep her job.
On Friday, Jeremy Hunt, Chancellor, said: “In a free society, we must know that no one is deprived of a bank account for their political views.”
He also said it was necessary to “deal with disproportionate discrimination against” PEPs.
A Downing Street source said it would be “premature” to suggest that the new rules will be extended to business accounts soon, but confirmed to be under consideration along with other potential changes.
The Treasury declined to comment.
Recent Comments