Just after 5.40pm on Tuesday afternoon, the two people in charge of NatWest Group put out a joint statement. Dame Alison Rose, its chief executive, admitted she had been the source for an incendiary BBC story about Nigel Farage’s accounts at its exclusive private bank, while Sir Howard Davies, the bank’s chair, expressed his support for her remaining in charge of the lender.
Eight hours later, the bank had performed a dramatic reversal, having catastrophically misjudged the mood of its largest shareholder, the UK government. After last-minute interventions from both the prime minister, Rishi Sunak, and the chancellor, Jeremy Hunt, board members convened for a late-night virtual call that was to spell the end of Rose’s 31-year career with the bank.
The chaotic events of Tuesday night encapsulated the fast-moving nature of the political row that first broke out a month ago when Farage, the former leader of Ukip, complained on Twitter about his bank account having been closed. Throughout the subsequent four weeks, Farage has played a deft political game while NatWest appears to have been caught out by the level of anger in the Tory party and Whitehall.
“I don’t know why NatWest thought they could stand by Rose,” said one government source. “It was clear once that statement was published that she would have to go.”
NatWest had been the focus of intense scrutiny for weeks, following the revelation by the Telegraph that Coutts had closed his account after lengthy discussions over the reputational risk that his political views posed for the bank.
The Telegraph’s story, which was based on information requests Farage had made to the bank, appeared to contradict an earlier BBC story which had said that Coutts had ousted him for falling below its financial thresholds, rather than concerns about his views. Rose herself came under fire when it emerged that she had sat next to the BBC’s business editor, Simon Jack, at a function the previous night.
As speculation swirled over whether Rose had been the source of the BBC’s story – for which the corporation later apologised – the bank remained quiet.
But on Tuesday, the silence broke after Rose confessed to the board that she had been the BBC’s source. “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,” she said. “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.”
Nevertheless, the bank believed it could stand by her. Having been in contact with officials from the Treasury and the Financial Conduct Authority throughout the day, NatWest thought it was safe to release a statement from Davies giving Rose the full backing of the board. Officials had told them Rose’s position was “a matter for the board”, and so believed they were justified in keeping her in place.
It was wrong.
Treasury officials had been aware that the statement was coming, according to multiple sources, but had not seen its exact wording. When it arrived, it prompted alarm from both Hunt and Sunak.
“At the point at which Alison Rose’s full statement was published, the chancellor expressed significant concerns about her behaviour,” said one Treasury official. “Ministers didn’t speak to the bank, but senior Treasury officials were in touch. They relayed the chancellor’s concern. The government’s position was communicated to the bank.”
The message was not a command to sack Rose – Whitehall officials insist that was a decision taken by the board. But those close to the process say it was inevitable that she would have to stand down, given that the government is the bank’s largest shareholder.
For Hunt himself, the decision was a matter of some regret, said one source, who said the chancellor had liked Rose and considered her very able. Nevertheless, there were potentially serious political ramifications of standing by the NatWest boss while much of the parliamentary Conservative party called for her resignation.
Once that position had been made clear, the bank hastily convened a board meeting, due to begin at 11pm, at which it was decided Rose would step down.
In his second statement of the evening, issued at 1.30am, Davies called it “a sad moment”. The government, however, welcomed the move on Wednesday morning. The City minister, Andrew Griffith, called the bank’s decision to close Farage’s account “unacceptable”.
Had Rose remained in post, she would have faced one of the more awkward meetings of her career later on Wednesday, as the bosses of 19 UK banks and building societies held an online call with Griffith himself.
At that meeting, the City minister outlined the government’s concern over banks closing customer accounts because of their political views, and he outlined a set of new regulations that will make it harder for them to do so. They include giving customers more notice of bank closures, being more transparent about the reasons behind them, and giving customers more power to challenge those decisions.
The new rules will come into force later this year once parliament returns, but those briefed on the meeting said Griffith made clear to the banks he wanted them to comply immediately. “The message was, it is either implement them now or have them forced upon you in the autumn,” said one Treasury official.
Griffith’s role in the affair has won plaudits from Farage himself, who told the Guardian the minister had been “outstanding”.
“I very rarely have anything nice to say about this mob,” he said about the government. “But whatever the government’s motives, they’ve acted swiftly.”
Farage says he now wants to see the resignation of both Peter Flavel, the chief executive of Coutts, and Davies himself, who is due to stand down anyway by next summer. He also intends to campaign for banks to be more willing to do business with fossil fuel companies and cryptocurrency startups.
The immediate problem for NatWest is to find a permanent successor for Rose, having appointed Paul Thwaite, its chief executive for commercial and institutional business, for an initial period of 12 months.
The government insists, however, that it will not interfere in that process. “NatWest succession is a matter for the chairman and the board, of course,” said one Treasury official. “That has always been the case.”
