When I was a child, banks were simply businesses. They did not have “values” other than the importance of staying financially solvent and keeping their customers’ confidence. Nor were they remotely interested in the political opinions those customers might hold, only in their account balances. There were really only three causes for which a bank would close down someone’s bank account:
But if you had money to deposit, and had no criminal record, another bank would probably take you on happily enough. The banks were businesses in competition, as in any other field of commerce, so luring another bank’s customers was good business practice. Competition was sharpened by the limited population of people who actually needed a bank account. Basically they were:
Employed working class people lived exclusively in a cash economy and never darkened the doors of a bank. For example, my father opened his account only when he became an office worker.
The flow of money between banks mainly took the form of customers drawing out cash and spending it with local businesses who then banked their takings. In addition, there were a lot of payments by cheque (which took several working days to clear). Regular payments were made by standing order and (later) direct debits. By the end of each working day, most of the overall transfers between banks had cancelled out, and the remainder were settled by transfers between their accounts at the Bank of England. All this required minimal coordination between banks, allowing them to function as truly independent concerns.
The banking system today is unimaginably different. Most money transfers are electronic and instantaneous. Even shopkeepers, workmen and restaurants depend on card or phone payments and often refuse to take cash. The result is that, while the banks still have separate boards and shareholders, in practice they have to work as a single interconnected system. They cannot afford to have different operational policies. This model might be called “Banking as a Utility” or “Banking as a Service” rather than “Banking as a Business”. At the same time, this “service” has become essential to everyone. When most money is electronic, you need a bank account in order to carry out the smallest financial transaction.
One of the features of modern life is the systematic blurring between the public and the private sector. In the past, you only needed to ask “Who owns this?”. If the answer was national or local government, then (in a democracy) there were strict limits on what such a body was allowed to do to individuals, and means of seeking redress through the courts. By contrast, privately owned businesses could more or less do as they pleased. Any Peggy Mitchell could shout, “Gerrouta my pub!” and there was no appeal. But that didn’t matter because you could just go and drink in the pub down the road instead.
Nowadays, ownership is largely irrelevant to the way organisations function. Meta and Twitter may be privately owned but they are all-pervading and have more power than most national governments. If they ban you from their platforms, it is equivalent to being banned from the public square. The same is increasingly true of our integrated banking system.
The media are (perhaps deliberately) putting a huge emphasis on the travails of Nigel Farage, who has had both his personal and his business account at Coutts closed down for no reason other than that his political opinions do not “align with our values”. Or rather, and even more sinisterly, because they are “seen as” not aligning with them. He is “seen as racist and xenophobic”, so apparently it does not matter in the least whether he actually is or not. Just as J K Rowling is “seen as transphobic” although no one seems able to quote a single genuinely transphobic thing that she has said.
But Farage is largely a side show. The real scandal is that hundreds, perhaps even thousands, of “little people” have been “debanked” in the same way by all four major banking groups, and until now they have had no redress because no one was listening to them, certainly not the banking ombudsman. Indeed, if the banks had stuck to persecuting people like these, they could have gone on doing so indefinitely. We don’t yet know the true number of people affected by this abuse, but it is certainly very large and could blow up into a scandal as big as that of the sub-postmasters. They were victims of the belief that computers never get it wrong, which is hardly dafter than the belief that Diversity, Equity and Inclusion departments never get it wrong.
The really surprising element in all this is that someone at Coutts actually thought it was a good idea to challenge Farage, a man with a huge public following and the aggressiveness and tenacity of a Pit Bull terrier, to a fight on such flimsy grounds. I suppose it is a classic case of hubris. These people have got away with so much for so long that they now think themselves invulnerable. They do not seem to have considered whether the reputational damage that Farage could and would inflict on them if they closed down his accounts unjustifiably would not easily outweigh any possible reputational damage that might be caused by the general public discovering that he banked with Coutts.
Whether you like Nigel Farage or not (and I do not particularly like him) there is a huge irony in a man being rejected for his political views in the name of diversity, denied any kind of due process in the name of equity, and excluded from an essential service in the name of inclusion. If banks and similar businesses are not forced to change their policies, we shall end up with a Chinese social credit system in which life can be rendered intolerable for anyone who does not follow the official line.
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