In the United Kingdom, the battle of small businesses and associations to keep their bank accounts

The affair started in June 2023. Former British far-right leader Nigel Farage, now a simple television talk show presenter, publicly announced that his bank, Coutts, was closing his account, without explanation. “Political persecution”, he denounced. Mr Farage felt he was excluded from this establishment reserved for wealthy clients because of his opinions.

After a few weeks of agitation, this master of media campaigns obtained internal documents from Coutts which seemed to prove him right. An internal committee responsible for assessing the risks to the reputation of the establishment considered, in fact, that Mr. Farage was considered “at best as xenophobic and playing into the hands of racists”. He also wondered about his potential links with Russia. Conclusion of the bank: the man is “in contradiction with [leur] position as an inclusive organization ».

The former politician won his battle. He changed banks, but he obtained the resignation of Alison Rose, the director of NatWest, the bank which owns Coutts. He is now seeking compensation.

What could have been a simple epiphenomenon then loosened tongues. Small businesses and charities have begun to complain that their bank accounts are regularly closed, often without notice. A parliamentary committee has opened an investigation. In February, it published the first figures: each year, more than 140,000 small and medium-sized enterprise (SME) accounts are closed at the initiative of their bank, or 2.7% of the total. On April 22, theombudsman British financier revealed that the number of complaints about untimely account closures increased by 44% from April 2023 to March 2024, compared to the previous year.

Important checks

What Mr Farage has in common with the thousands of small businesses affected is tougher anti-money laundering rules. Banks must now monitor “politically exposed personalities”, considered to be at greater risk of corruption. They must also prove that they have implemented all procedures to “know their customer”, which require significant verification. And at the same time, regulation which imposes more capital and liquidity has made establishments significantly less profitable than before.

Read the report | Article reserved for our subscribers In Basildon, travel to the heart of a British economy that is stagnating

The result is that many establishments have neither the time, money nor appetite to carry out the necessary checks for very small businesses or charities. Sometimes with ludicrous cases, like that of the association of Friends of the Hornsey bell tower, an old medieval church in north London. This normally takes care of renting a room there, listing the graves in the cemetery and organizing a garden maintenance day twice a month. In November 2023, tell it Financial Times, Barclays suddenly closed its account, without explanation. Nick Allaway, a former accountant and board member, had to pay suppliers out of his own pocket and refuse donations.

You have 39.82% of this article left to read. The rest is reserved for subscribers.

source site-30