Closure of Nigel Farage’s bank account ‘predominantly a commercial decision’, review finds
An independent review into the closure of Nigel Farage’s Coutts account and the discussion of his banking with a journalist by the head of the bank has found “a number of shortcomings” in the closure process.
But law firm Travers Smith, which was commissioned by the board of NatWest to conduct the review, said the closure of Mr Farage‘s account, “was predominantly a commercial decision”.
“Coutts considered its relationship with Mr Farage to be commercially unviable because it was significantly lossmaking,” the review found.
In response to the key findings of the report, NatWest chairman Sir Howard Davies, said “a number of serious failings” were set out in the treatment of Mr Farage.
Shortcomings were also found in how the bank, which owns Coutts, communicated with the former UKIP and Brexit Party leader and how it treated his confidential information, according to the review.
The Financial Conduct Authority (FCA) said potential “regulatory breaches and a number of areas for improvement” were identified.
These include NatWest’s processes on how it considers potential account closures and customer complaints as well as the effectiveness of governance mechanisms.
NatWest’s share price fell to 173p on Friday – its lowest in more than two years. This came despite just published results showing £1.33bn in profit over the three months ending in September, 23% higher than at the same point a year before.
The share price fall, from 205.2p on Thursday evening, was the biggest fall since the 2016 Brexit vote.
Former chief executive Dame Alison Rose left the state-backed lender after she admitted making a “serious error of judgment” by speaking to a journalist about Farage’s banking at Coutts.
Dame Alison Rose
After the news piece was published Mr Farage released the findings of a subject access request, which suggested the move was taken partly because his views did not align with the firm’s “values”.
Key findings by Travers Smith are:
• The decision to close the account was lawful and was made in accordance with bank policies and processes.
• Dame Alison Rose played no part in the decision to close the account.
• Other factors were considered in the decision-making process: Coutts thought there could be reputational harm from Mr Farage holding an account, though these factors did not drive the decision.
• Mr Farage’s stated beliefs were not a determining factor in closing the account but those beliefs did support the decision.
• The way Mr Farage was informed of the closure of his account did not accord with the bank’s policies and processes, in particular when it came to giving reasons to customers involved in “non-financial crime exits”. No adequate reasons were given.
In response, Mr Farage said: “The report’s authors claim it was “predominantly a commercial decision” to close my accounts but, crucially, they also noted that evidence given to them by witnesses in relation to this episode was not entirely consistent.
“Travers Smith has taken a very mealy-mouthed approach to this complex issue. The law firm argues that my political views “not aligning with those of the bank” was not in itself a political decision. This is laughable.”
“Worse still, Travers Smith did not find “any evidence” that my “pro-Brexit stance were factors in the exit decision”. The word Brexit appeared no less than 86 times in my subject access request.
“The letters that were sent to me confirming the closures of my accounts without explanation were sent on a paper headed template usually reserved for those suspected of fraud.”
The Information Commissioner’s Office (ICO) earlier this week said there were two privacy breaches involved in Dame Alison’s disclosure to BBC News business editor Simon Jack.
A broader FCA review of banks closing accounts on the basis of customers’ political opinion found no evidence of the practice.
However, only closures between July 2022 and June 2023 were considered and more work to verify the data supplied by banks was needed as was examination as to why and when they close accounts due to reputational risk.
‘Minimal’
“Both Travers Smith and the Information Commissioner’s Office (ICO) have concluded that I inadvertently confirmed what had already been widely reported, that Mr Farage held an account at Coutts,” Dame Alison said on Friday morning.
“The ICO also concluded the ‘impact around this specific disclosure was minimal’.”
“Travers Smith is clear that “there was no leak of specific detailed financial information”. Travers Smith also confirmed I knew nothing about the comments made by Coutts staff about Mr Farage, which were deeply unpleasant and unfair.”
For Donald Trump, today was primarily about one thing.
Before boarding Air Force One to make the transatlantic flight to the UK, he told reporters on the White House Lawn: “It’s to be with Prince Charles and Camilla, they’re friends of mine for a long time… you’re going to have some great pictures, it’s going to be a beautiful event.”
Britain delivered. After a military welcome, lunch with the King and Queen and a Red Arrows flypast, the president has already got more than enough photographs to admire on the plane back home. Luckily, pomp and circumstance is something we do well.
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But this was not an altruistic display. These things rarely are. As British governments have done in the past, the Starmer team leveraged Britain’s soft power to advance its own aims. Beyond the fanfare, Starmer wants to catch the president’s ear on foreign policy issues, including Gaza and Ukraine. But they are also there to talk money: investment and trade.
On trade, we faltered. The US refused to budge on its 25% tariff imposed on the aluminium and steel Industry (a reminder perhaps that no amount of tea with the King will get the US to act against its interests).
But in the arena of investment, the British government is already declaring victory. Trump arrived in Britain along with a who’s who of the US tech scene.
Jensen Huang, chief executive of the AI chipmaker Nvidia, Apple’s Tim Cook, Microsoft’s Satya Nadella, and Sam Altman of OpenAI all made the journey over. Today, they are attending a state dinner at Windsor Castle along with the president but they had other reasons for coming too.
Many of them were here to announce major investments, running into the tens of billions of pounds, to build AI data centres in the UK under a new US-UK tech deal.
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These are private investments but the government is viewing them as a win for Starmer. His administration is – like the one before it and the one before that – scrambling to unlock economic growth in the UK. It is pinning its hopes on the transformational promise of AI.
The prospect of greater economic growth, productivity and jobs is an alluring one for Britain and, indeed, most of Western Europe’s ailing economies. The hope is that these investments will build the digital infrastructure needed to turbocharge the AI industry in the UK.
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Both sides of the road leading up to the castle were packed with onlookers as the presidential helicopter Marine One circled overhead shortly after 12pm.
The government said the deals, which came from Nvidia, Microsoft, OpenAI, Google among others, were a “vote of confidence in the UK”. And there are, of course, compelling reasons why Britain’s existing AI ecosystem is attracting these companies. It has little to do with the King.
World-class researchers, universities and scientific research have contributed to an ecosystem in Britain that is ripe for take off. Deep Mind was perhaps the most famous success story, a company that Google swooped in to acquire in 2014.
That is something Jensen Huang, chief executive of Nvidia was keen to remind us. Ahead of his trip to Windsor, he expressed surprise at Britain’s sometimes dysphoric attitude about its own capabilities.
“This week we’re here to announce that the UK is going to be a superpower… but you know, Britons can be a bit humble, even deprecating, about their successes. Really, this is a moment to celebrate the UK ecosystem.”
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Government celebrates tech win – but challenge lies ahead
He said that Britain was at the cusp of a new Industrial Revolution, and it should seize the moment.
“This is the home of the origins of artificial intelligence and some of the brightest minds in AI are here. So the expertise of creating artificial intelligence and creating and training large language models is deep here.”
The UK has obvious expertise and appeal. It is the third largest AI market in the world, after the US and China. It is home to a third of Europe’s AI start-up companies and twice as many as any other European country.
Where it falters is infrastructure. High energy costs and a creaking grid are holding back growth in data centres. The government has promised to rectify this (which has caught the attention of the tech giants, hungry as they are for energy and computational power). The deal with the US will also see both sides cooperate to expand nuclear energy in the UK.
Not everyone is comfortable with all this attention from the Americans, however. US dollars will help to fund the expansion in data centres, but US AI companies like OpenAI, which is partnering with Nvidia and Nscale to open a data centre in Blyth, will be at the forefront of the opportunities too.
Open AI will secure the access to infrastructure, energy and computing power to run and train its models. Meanwhile Nvidia will provide the chips. Nscale, the British data centre company, is set for huge growth but, where France boasts Mistral, the UK has no comparable national AI champion. For all the claims of “sovereign AI”, some may wonder whether building data centres in the UK is enough to give us sufficient control over this powerful new industry, when so much of the technology is American.
Speaking to Sky News, Mr Huang batted away those concerns.
“Sovereign AI starts with having your sovereign data… you have lots of your own data,” he said. “The data of your people, of your companies, of your society. That data is created here. It belongs to you. You should use it to train your own large language models. There’s going to be a whole bunch of different AI models being created here, and I have every confidence, so long as we provide the instrument of the science.”
The US central bank has cut interest rates for the first time this year, in a move president Donald Trump will likely declare is long overdue.
Mr Trump has demanded cuts to borrowing costs from the Federal Reserve ever since worries emerged in the world’s largest economy that his trade war would stoke US inflation.
The president – currently in the UK on a state visit – has, on several occasions, threatened to fire the Fed chair Jay Powell and moved to place his own supporters on the bank’s voting panel.
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He was yet to comment on the rate decision.
The fallout from the row has resonated globally, sparking worries about central bank independence. Financial markets have also reflected those concerns.
The bank, which has a dual mandate to keep inflation steady and maintain maximum employment, made its move on Wednesday after a major slowdown in the employment market that has seen hiring ease sharply.
The latest economic indicators have shown caution over spending among both companies and consumers alike.
The Fed said the economy had moderated.
Inflation, while somewhat elevated due to the effects of higher import costs from the trade war, has not taken off as badly as some economists, and the Fed, had initially feared.
Mr Trump has sought to fire Fed rate-setter Lisa Cook. File pic: AP
Its 12-member panel backed a quarter point reduction in the Fed funds rate to a new range of between 4% to 4.25%.
The effective interest rate is in the middle of that range.
Crucially for Mr Trump, who is trying to inspire growth in the economy, the Fed signalled more reductions ahead despite continued concern over inflation.
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Trump state visit: key moments so far
Financial markets saw a further two quarter point rate cuts before the year’s end.
The dollar, which has weakened in recent days on the back of expectations of further rate cuts, fell in the wake of the decision and the Fed’s statement.
It was trading down against both the euro and pound. Sterling was almost half a cent up at $1.17.
This Fed meeting was the first with new Trump appointee Stephen Miran on the voting panel.
He was chairman of the president’s Council of Economic Advisers before being handed the role this week.
His was a sole voice in the voting for a half percentage point cut. It is clear, though the identity of participants’ forecasts are not revealed, he was the lone voice in calling for a further five quarter point reductions this year.
Mr Trump has sought to fire a member of the Fed’s board, Lisa Cook, to bolster his position further but that decision is currently subject to a legal challenge.
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