“Banks”, wrote Matt Klein back in March, “are speculative investment funds grafted on top of critical infrastructure.”
Writing during the latest banking crisis in the US, he was commenting on the inherent tension between banks being risk-taking, profit-making institutions, and their vital role in the economy and thus the imperative that the public insulate them from the worst consequences of those risks, at least most of the time.
One could plausibly make the case, in light of the current raft of stories about various political figures having their accounts shut down, that a similar tension exists with regards to free speech.
Banks are private businesses, and on one level it makes intuitive sense, from a liberal or free-market perspective, that they should be able to choose with whom they do business. After all, the Supreme Court eventually ruled in Lee v Ashers Baking Company Ltd and others (the infamous “gay cake” case from a few years ago) that people cannot be forced to promote a message they disagree with.
Yet access to banking is not a nice-to-have; it is increasingly essential just to participate in the modern economy at all. That’s why the state legally obliges the larger banks to provide so-called Basic Bank Accounts, free, to anyone who needs one.
But is that basic protection enough? It ensures that you can receive wages and pay bills in an economy where many institutions are no longer geared up to pay or receive in cash. But it nonetheless means that people can be locked out of a huge range of banking services, and if normalised, would inevitably have the effect of suppressing the expression of views prone to sanction by the banks.
Moreover, it is difficult to argue that merely providing banking services to an individual or organisation is the same as promoting it – at least, unless withdrawing service from people with certain views becomes sufficiently normalised.
Jeremy Hunt is thus right to be concerned by these reports, and they should be fully investigated. There ought to be strict rules in place prohibiting banks from withdrawing service on the basis of their clients’ political views, and a regulator empowered to hurt them if such rules are broken.
The Chancellor ought to consider extending such regulation to electronic payment processors such as Paypal and online crowdfunding platforms, both of which play an increasingly important role in economic life and political campaigning but which at present have a relatively free hand to engage in discriminatory practices.
Backbench Tory MPs already started agitating for action against Paypal last year. But crowdfunders should not be left out; whatever you think of the Canadian truckers’ protest, GoFundMe’s role in Justin Trudeau’s coordinated attack on their finances (which also included having hundreds of bank accounts frozen) is an unhappy augury of how an increasingly cashless society could lead to new and dangerous power imbalances between individual citizens, financial institutions, and the state.
(And that’s before we get to the thorny question of privately-owned companies which control part of the modern public square, such as Twitter.)
It’s important to stress that none of this action requires taking a view on the individual cases which have made the headlines. The Yorkshire Building Society, which is accused of shuttering a vicar’s accounts over his views on LGBT issues, insists that it “only ever make the difficult decision to close a savings account if a customer is rude, abusive, violent or discriminates in any way”, and that may be true in this instance.
Likewise, Nigel Farage’s suggestion that MI5 might be behind the closure of his accounts should probably be taken for what it is: a statement by a man who makes money persuading people to invest in gold and silver instead of traditional financial products. Not even the most woke financier or most sinister government can cancel a stash of Krugerrands under your mattress – buy today!
Rather than any vast conspiracy, it seems much more likely that these moves by the banks have a similar origin to the bottom-up pressure by employees of publishing houses not to publish certain books, or the younger generation of lawyers’ increasing dissatisfaction with the cab rank principle which ensures everyone’s right to equal protection under the law.
Yet that doesn’t mean the results aren’t a problem. It would not be acceptable if a growing number of viewpoints became unpublishable just because it was the result of pressure by junior employees, any more than to sacrifice the principle of fair representation because lawyers didn’t feel like representing certain clients.
Ultimately, where any institution is providing the “essential infrastructure” of a free society, be that economic, financial, or legal, the state is right to ensure that the profits from doing so are balanced by a properly-enforced obligation to provide it equally.