Fraser Nelson

A mistake that must not be repeated

A mistake that must not be repeated
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As I suspected, opinion amongst CoffeeHousers is divided as to whether RBS asking potential clients for their political affiliation is a big deal. A good chunk of you think this is a scandal. Others don’t. Where, they ask, is the story – it was a simple cock-up. RBS misread EU regulations about extending credit to Politically Exposed Persons (ie, overseas ministers who may be ‘vulnerable to corruption’) and ended up asked British clients if they belonged to political parties. RBS have apologised and didn’t mean any harm. And aren’t I being a bit paranoid linking this to the fact that RBS is state controlled – and trying to build this up into a Big Brother story when it clearly is a few call centre drones asking the wrong question?

First, can I be clear: I don’t think RBS was doing this as some evil No10-directed snooping exercise. I accept that they spectacularly misapplied money laundering regulation requirements. They’ve said they won’t do it again. The fact that they started asking clients political question just after passing into state control is, I believe, an unfortunate and embarrassing coincidence. Some CoffeeHousers say the script asked of clients is agreed at the highest levels. Maybe so - this doesn’t mean the process isn’t shambolic. As Cath says, it makes you realise why RBS ended up being nationalised in the first place. So I regard this as a cock-up, not a conspiracy. But it is a cock-up that chimes uncomfortably with this government’s insatiable appetite for information about the lives of others, and the steady politicisation of the banks.

View this from the bottom up. You have a state-run bank asking clients if they are a “politically exposed” without knowing (or being able to explain) what that means. I find this inherently outrageous. I am probably in the minority: many couldn’t care less. Each to his own. But this is no journalist wind-up. It was a businessman, Geoff Robbins, who first contacted me about RBS political screening - saying how concerned he was about having to answer such questions and that it reminded him of totalitarian regimes. For people of his generation, it has a Cold War resonance. It was not (THX1138) a one-off. As RBS say, they were regularly and mistakenly asking clients about political affiliation. I regard this as an unforgivable intrusion. 

I also don’t accept that RBS need to ask this question at all. The FSA say there is flexibility: banks need to make sure they’re not dealing with an African kleptocrat. Asking “are you politically exposed” is a pointless way of doing this, which is open to widespread misinterpretation by people nervous enough that the state owns their bank.

Some of the worst events in history take place because no one is really in charge. That RBS could blunder their way into this is almost as scary as the idea that they did it deliberately.  I accept it was a blunder: God knows, RBS has made enough of them already. But the banking industry should urgently review and clarify the way it handles the issue of “politically exposed persons.”  No one in this country should ever again be asked about party political affiliation by their bank.


Written byFraser Nelson

Fraser Nelson is the editor of The Spectator. He is also a columnist with The Daily Telegraph, a member of the advisory board of the Centre for Social Justice and the Centre for Policy Studies.

Topics in this articlePolitics