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How to stop banks’ new social credit system

We need new legislation to force banks to respect free speech

Artillery Row

So, the Government has noticed: banks have turned against free speech. Nigel Farage can’t open a new account, and vicars are being purged for responding to a request for customer feedback and urging them to drop the woke stuff.  

Those with independent opinions are at risk of having their access to financial services withdrawn. The cancellation of bank accounts means the cancellation of people – as Nigel Farage said, “Being denied a bank account turns you into a non-person.” Having a bank account is a fundamental part of a free society for every citizen – we need them to be able to do virtually anything. Not just deposit wages, but in our increasingly cashless society to buy a loaf of bread. 

Banking is a market, but banks are licensed by the government. People expect the government to step in when banks fail in their obligations, as we saw with the bailouts that British banks received during the 2008 financial crisis. Banks received support because they have reciprocal duties to the British public. The closure of accounts for non-commercial reasons reflects a failure to honour that duty, owed both to their customers and to the public at large. This is sometimes justified on the grounds of “suspicions” regarding the client, but since when have suspicions been enough to condemn people? This breaches Britain’s longstanding legal presumption of innocence. 

Intervention to prevent banks discriminating against free speech should not be needed, because we are supposed to live in a high-trust society. The British people still know what this means, but our corporate Establishment increasingly does not. The “de-banking” trend is a sinister new form of cancel culture. British banking cannot provide services only to those willing to submit to the banks’ preferred ideologies. 

The outrage about the illegitimate closure of accounts is justified. We now need new legislation to stop the purge. This legislation must do two things: create a requirement for banks to respect their customers’ right to lawful free speech, and a transparency obligation. Put simply, this will mean that customers cannot be denied an account or other banking services for saying the “wrong” thing; and that whenever a customer has services removed for any reason, the banks must explain why — a financial Habeas Corpus, if you will.

Recent weeks have revealed part of the reason why prosperity growth is now on hold in Britain

Anyone who cares about preserving a free society must surely agree that the need is urgent. I noted in a recent speech that Britain today is beginning to resemble early East Germany. Once upon a time, our country had different institutions that believed in different things. Today, private companies increasingly understand that their role is to support the blob and its ideology. The chief executive of KLM airlines asks people to take fewer flights for the sake of Net Zero; a new label on Nescafé jars tells instant-coffee drinkers to celebrate “gender diversity”. Apparently encouraged by their entanglement with organisations like Stonewall, our banks now do much the same.

Recent weeks have revealed part of the reason why prosperity growth is now on hold in Britain. Growth requires innovation, and that demands an ability to question the status quo. As financial institutions build their own version of China’s social credit system, they are destroying our ability to debate, challenge, experiment and create wealth. Britain’s future prosperity is under siege.

Lenin understood that a totalitarian society required the politicisation of everything, an idea our institutions are taking up with gusto. As the demands of woke activists have become increasingly divorced from reality, the imposition of their beliefs on a restive population is becoming draconian.  The British people are free to live their lives as long as they don’t say anything the progressive elite objects to. If you disagree, you are to remain silent — or else! This needs to be challenged everywhere.

The Government announced today that it may scrap EU laws on “politically exposed persons” (PEPs), which have supposedly helped banks remove people they don’t like. But this doesn’t go far enough. There will be nothing to stop them doing it anyway and it isn’t clear why a vicar was considered a PEP (though they may have made him one).    

The abuse of banking discretion must end

Access to a bank account must now be enshrined in law, just as when the Post Office used to be obliged to provide everyone with a post office savings account.  Banking has become an essential service, like a public utility, and should be available to every creditworthy person, unrefusable other than for criminal convictions like fraud, with banks’ reasoning subject to challenge. Decisions made on ideological grounds must be proscribed (application should not be fishing expeditions to determine whether prospective customers are aligned with the bank’s “values”). The same needs to apply to debit card and banking services like savings, transfers and payments — as well as payment processors like PayPal — and banks must also explain any refusal to provide credit facilities and mortgages. It’s not good enough for people to have accounts in name only. One approach is to stipulate that banks may only “de-bank” someone with a court order or final adjudication, unless the customer has separately been convicted of a financial or other relevant crime. We also need a statutory right to sue banks, beyond regulatory review. In the US, decisions after review by the regulatory body may be appealed with a judge at a federal court, so this is hardly an unprecedented idea. 

The abuse of banking discretion must end. That will create a burden on banks, to be sure, but it is the inevitable consequence of their collective failure to uphold freedom of speech. Their decision to get into bed with organisations like Stonewall and enforce their ideology is leaving their customers increasingly baffled and justifiably angry. In a high-trust society, without reasonable grounds for suspicion of criminal activity, banks’ customers should be left in peace. It’s a pity we now need legislation to make this happen.

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