Last night, the board of NatWest announced that it had ‘full confidence’ in Dame Alison Rose as its chief executive. But just after 2 a.m. it announced she was leaving by mutual consent. Rose had admitted she was the source of the inaccurate briefing to the BBC about Nigel Farage’s Coutts account and she apologised. The NatWest board had thought this would be enough for her to cling on. But in a matter of hours, and just after midnight, they thought otherwise.
So what changed? There seems to be a difference of views between NatWest – which thought her apology would be enough – and the government, which thinks the Farage/Coutts debacle exposes a culture of deep politicisation in NatWest. This was a culture where the whole lot of them thought it was quite okay to de-bank Farage after drawing up a 40-page account of what one minister this morning described as ‘his lawful political beliefs’. Rishi Sunak has said Dame Alison was right to resign (and, ergo, wrong to try to cling on – and the NatWest board was wrong to have let her).
The view in No. 10 and the Treasury is that the problem was that people can be ‘de-banked’ for their political views – and, even worse, after a formal political process which Coutts, owned by NatWest, seemed to think entirely appropriate. This suggests this problem is pretty widespread. So the scandal was not about a briefing to a journalist but about the culture deep within Coutts and NatWest itself.
Normally, the opinions of government would have no bearing on the governance of a bank. But when the government owns 39 per cent of the bank (as has been the case with NatWest since the taxpayer bailed it out in the banking crisis) then it matters a lot more. Andrew Griffiths, Economic Secretary to the Treasury, was not holding back in a statement released at 6.20 a.m:
It is right that the NatWest CEO has resigned. This would never have happened if NatWest had not taken it upon itself to withdraw a bank account due to someone’s lawful political views. That was and is always unacceptable. I hope the whole financial sector learns from this incident. Its role is to serve customers well and fairly – not to tell them how or what to think.
That’s mild compared to some of the other quotes from unnamed cabinet members in the newspapers today (these would have landed late last night, perhaps changing NatWest’s calculation on whether this scandal was survivable). These ministers were saying that Dame Alison has ‘no integrity’, has ‘obfuscated at every turn’ and ‘hasn’t understood from the outset just how serious this is’. Those quotes may well have mirrored feedback directly from the government to the bank.
In her statement (full text below), Dame Alison certainly makes out as if she didn’t really tell the BBC anything too bad when she sat next to its business editor Simon Jack at a charity dinner the day before his story appeared (a seating plan revealed by the Daily Telegraph, sealing her fate).
‘I did not reveal any personal financial information about Mr Farage,’ she claims. ‘In response to a general question about eligibility criteria required to bank with Coutts and NatWest I said that guidance on both was publicly available on their websites.’
If this was really all that she did, why did the BBC then run a story saying Farage lost his account for financial reasons and not for political ones? Why on earth would they think they had new information if (as she insists) she did not say anything new?
In a very rare step, the BBC itself seemed to have been ready to challenge Dame Alison’s account. The Times quotes BBC sources accusing her of ‘double standards’ and saying this was not (as she made out) a one-off chat over dinner. Its reporter actually went back to her to double check the facts on the Farage-disparaging story before publishing.
‘She stood by it,’ the BBC source told the Times. ‘She knew it was coming even though it wasn’t right – or the whole story at least.’ A ‘senior BBC source’ is also quoted saying of Dame Alison:
She was able to breach client confidentiality as the source but then NatWest hid behind client confidentiality when we were in the firing line for reporting the story. Confidentiality seems to be a flexible concept.
Ouch. If Dame Alison had actually misled in her statement, and the BBC was in effect getting ready to say so, then she would have had to walk. She might not be the last NatWest board member to face that fate.
Sir Howard Davies, NatWest’s chairman, now looks exposed. He was informing us last night that ‘after careful reflection’ on the fiasco, Dame Alison still had the board’s ‘full confidence’. Why? Did he think that kicking bank clients out for political views, then briefing against them to the BBC, was the not kind of crisis that would not require a resignation? The front page of today’s FT quotes the Financial Conduct Authority raising the prospect of her being investigated for breaking the law. This was not just about Farage but a clearly-exposed, deeply political scandal which was only going to intensify if the chief exec published a statement that raised more questions than it answered.
In such scandals, the role of the chairman is to step in, avail himself of all of the facts and make a judgement about the chief exec’s position. Sir Howard looks to have been pretty inept in this regard, which will lead to questions as to how likely the Coutts/NatWest culture will change under his chairmanship. And who on that board, if anyone, does recognise the wider issues at stake?
More questions will now come: how many NatWest directors knew that Coutts was in the business of compiling political dossiers on its clients, deciding which of them to de-bank? Who should have asked questions about this practise? Or was the culture such that no one thought this was inappropriate?
The NatWest board mishandled the crisis and ended up in a situation where Dame Alison would likely be accused of giving an inaccurate statement about her inaccurate briefing while facing a potential FCA investigation. The view in both the Treasury and No. 10 was that the problem was not a chat at a charity dinner but a rotten culture: that of woke corporatism.
The questions won’t stop now. Why on earth did the NatWest board think she could survive after admitting to being the source of the leak – something a more junior official could (quite rightly) be fired for? Given that she earned £5.25 million last year, what size of payoff has she now been given? Given that the taxpayer partly owns this bank, such affairs are very much in the public interest. Who else at Coutts signed off on the work of the politburo that de-banked Farage? Will Rose now be fired from (or resign from) Sunak’s new business council?
When Dame Alison was announced as a member of Sunak’s council earlier that month, she said how excited she was to ‘grasp the opportunity of climate transition’. Just what that had to do with banking is anyone’s guess. This may point to the deeper problem: Dame Alison had been led to believe that getting ahead in banking now meant following a political agenda, saying the right things about climate change and ‘sustainable growth economy,’ etc. This politicisation had got to the point where Coutts was literally citing ‘inclusivity’ as a reason to de-bank clients. So, yes, the Tories may now denounce Dame Alison as a banking Wokeahontas – but who created the environment whereby she thought that this was the game she had to play?
Farage has called for the rest of the NatWest board to go. But they’re not the only ones with a whole bunch of questions to answer. We’ll bring you more as it comes.
And here’s Dame Alison’s full statement from last night:
I recognise that in my conversations with Simon Jack of the BBC, I made a serious error of judgment in discussing Mr Farage’s relationship with the bank. Given the consequences of this, I want to address the questions that have been raised and set out the substance of the conversations that took place.
Believing it was public knowledge, I confirmed that Mr Farage was a Coutts customer and that he had been offered a NatWest bank account. Alongside this, I repeated what Mr Farage had already stated, that the bank saw this as a commercial decision. I would like to emphasise that in responding to Mr Jack’s questions I did not reveal any personal financial information about Mr Farage. In response to a general question about eligibility criteria required to bank with Coutts and NatWest I said that guidance on both was publicly available on their websites. In doing so, I recognise that I left Mr Jack with the impression that the decision to close Mr Farage’s accounts was solely a commercial one.
I was not part of the decision-making process to exit Mr Farage. This decision was made by Coutts, and I was informed in April that this was for commercial reasons. At the time of my conversations with Mr Jack, I was not in receipt of the contents of the Coutts Wealth Reputational Risk Committee materials subsequently released by Mr Farage. I have apologised to Mr Farage for the deeply inappropriate language contained in those papers and the Board has commissioned a full independent review into the decision and process to ensure that this cannot happen again.
Put simply, I was wrong to respond to any question raised by the BBC about this case. I want to extend my sincere apologies to Mr Farage for the personal hurt this has caused him and I have written to him today.
I would like to say sorry to the Board and my colleagues. I started my career working for National Westminster Bank. It is an institution I care about enormously and have always been proud to be a part of.
It has been the privilege of my career to lead the bank and I am grateful to the Board for entrusting me with this role. It is therefore all the more regrettable that my actions have compounded an already difficult issue for the Group.’
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