Commons Sense

House of Commons · Westminster Hall

Business Banking: Undesignated Client Accounts

18 October 2023 · 1 other contributor · 3,263 words

Opened by Kelly Tolhurst Con Rochester and Strood

Responding minister: Andrew Griffith

Business & Trade

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Kelly Tolhurst raised concerns about business banking: undesignated client accounts in Westminster Hall. A government minister responded.

Key points

  • Kelly Tolhurst raised concerns about small businesses, especially in the marine industry, facing closure due to strict anti-money laundering regulations by UK banks.
  • Tolhurst highlighted the Association of Brokers and Yacht Agents' concerns regarding the implementation of Joint Money Laundering Steering Group guidelines.
  • Tolhurst asked for urgent government action to resolve issues affecting small businesses' access to undesignated client accounts.

Key requests to Government

Tolhurst asks for urgent action to resolve the issue affecting small businesses' access to necessary bank accounts, especially those using pooled client accounts (undesignated client accounts).

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Kelly Tolhurst Con Rochester and Strood

Kelly Tolhurst is concerned about the challenges small businesses, particularly in the marine industry, are facing due to how anti-money laundering regulations are being implemented by UK banks. She highlights that reputable and long-established companies have been driven close to closure as a result of these issues. The problem affects industries such as yacht brokers, letting agents, estate agents, jewellers, care homes, and solicitors. Specifically, the Association of Brokers and Yacht Agents has raised concerns about the implementation of Joint Money Laundering Steering Group guidelines by UK banks.

Other contributors (1)
  • Jim Shannon DUP Strangford

    Jim Shannon raised concerns about banks closing undesignated client accounts for yacht brokers and other small businesses. He highlighted the impact on mental health, business sustainability, and local economies due to account closures. He cited examples of businesses struggling with no clear reason from banks besides legislation changes.

Government Response

Andrew Griffith

It is a pleasure to serve under your chairmanship, Mrs Cummins. I thank my right hon. Friend the Member for Rochester and Strood (Kelly Tolhurst) for highlighting this important issue. She has been tenacious, and I convey my distress at the frustration suffered. The industry is an historic one and is important to us. A bank account is a vital part of how we operate in society, but it is also crucial that financial regulations do not put a disproportionate burden on legitimate businesses and customers. Pooled client accounts have many virtues as they protect customers when a firm fails. However, there has been concern about banks misperceiving the risk of these accounts and the regulation. I reassure my right hon. Friend that pooled client accounts are eligible for simplified due diligence where the risk of money laundering and terrorist financing is low. My predecessor wrote to UK Finance last year to reiterate this importance, and a roundtable was convened with banks and the Association of Brokers and Yacht Agents to improve mutual understanding. We will continue to work on improving guidance notes and adjusting regulations if necessary. There will be no further delays in consulting on how we can improve anti-money laundering procedures.

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