Why UK banks are closing the accounts of 1.25 million Brits living in the EU

It is the unintended consequences of Brexit that often cause the most bother. 

I have just been informed by Barclays that they are closing my account, after 43 years, because I am an EU resident without a permanent address in the UK. They are not obliged to shut me down. It is not a requirement arising from the withdrawal. They have simply weighed up the pros and cons of keeping me on and decided they don’t need me. 

Over the last 18 months, ever since Britain finally quit the EU, it has been business as usual between me and Barclays. My UK earnings, my pensions, my direct debits and my expenses when visiting London have all been taken care of by the bank I first joined in 1979 after being interrogated by the assistant manager of the St Paul’s branch next to my new employers, the Financial Times. 

I accepted it when the St Paul’s branch was closed and when its nominated successor in Greenwich also disappeared, leaving me an entirely online entity. I raised no fuss when I was informed that I was no longer wealthy enough to hold a premium account. But it never occurred to me that they would simply declare me an un-person. 

I’m sure Barclays haven’t made a fortune from my business down the years, but they didn’t make a loss either. Fees and charges were attached to almost every transaction I ever made, and woe-betide me if I ever strayed into overdraft. To add injury to insult, the total amount of interest paid to me in respect of my two accounts over the last five years has yet to reach double figures. In 2021, it was less than a pound. 

The amount of inconvenience I am about to be put through is considerable. Just think of all the things your local bank does for you, then imagine how you would feel if you were told that your account was no longer valued and that you had just months in which to make alternative arrangements in an entirely separate jurisdiction. 

Bear in mind that Barclays is just the market leader here. Other British banks are in line to do mcuh the same thing. Some, like Santander, will continue to look after existing account holders in Europe but not allow any new accounts to be opened. Others, such as HSBC, will carry on as now, but only in respect of “high value” customers – ie those with salaries of at least £100,000 and at least £50,000 on deposit. NatWest has just opened a British interests section in Frankfurt aimed at smoothing out the many difficulties that have arisen since Boris Johnson Got Brexit Done. But it is for corporate and business customers only, not the little people. 

According to the latest estimates, some 1.25 million British citizens currently live in the EU, the majority in Spain, France and Ireland. Many of these are retired, living off their pensions, but several hundred thousand are in employment and might expect to return home in the years ahead. The great majority of these have British bank accounts. 

Prior to Brexit, there were no problems. You could live in Berlin or Lisbon or Palermo and still do business through your UK branch of Lloyds, Barclays or Bank of Scotland. 

Not anymore. Or not for much longer. The loss of the City’s passport into the EU single market is rarely mentioned these days. It has cost London around 7,500 jobs so far, with more to come as banks and other instututions increase their continental workforces. This is hardly to be welcomed but could have been a lot worse. Business worth billions of pounds a year has been lost, again with more to come as Frankfurt, Paris and Amsterdam build the skills and experience needed to vie with London for a share of the pan-European market. But the Square Mile has not melted down, and nor is it expected to do so. It is adapting and looking elsewhere for new business. The most dispassionate estimate is that it will end up a little smaller than before while remaining one of the world’s big two financial hubs, second only to New York. 

My old paper, the FT, describes what is happening as a “slow bleed” rather than a fatal injury. Others have described it as a slow puncture.  

Yet, as is frequently the case with Brexit, the law of unintended consequences has meant short-term misery for hundreds of thousands of Brits abroad, most of whom (though not all) would have voted Remain but were prevented from doing so by the election law applied to the referendum. 

Take the Channel Crossing, most obviously between Dover and Calais. Before Brexit, it was easy to get onboard a ferry to France. Drivers had to show their passports, but in general were waved through. Trucks were treated in a similar fashion. Because Britain and Europe shared the same single market, there were no regulatory obstacles to moving from one side of the Channel to the other. 

Today, as we have seen over the last few days, the situation is very different. It could be argued that the French are not helping. Indeed, it is likely that by working to rule and failing to ensure that all customs booths in Dover are fully manned, France is making a political point: “You wanted a hard border, well now you’ve got one.” But if they are, aren’t they right? Isn’t that exactly what Brexit meant? Isn’t that precisely what the European Research Group argued for? 

Holidaymakers and British bank customers living in Europe are now paying the price for a Brexit that was never fully explained or understood. 

It was the same with the Northern Ireland Protocol. The Democratic Unionist Party, representing most of those in the Province who supported Leave, wanted as hard a Brexit as possible so that the Irish border was restored as a meaningful customs barrier. What they got was the Protocol, which avoids such a border but places it instead in the Irish Sea, making NI less a part of Britain and more closely attached to the Irish Republic and the EU. 

Yet another unintended consequence was the pressure Brexit put on the NHS and social services, as well as on the UK hospitality sector. Close to half a million EU citizens upped sticks and left the UK in the five years from 2016 to 2021. They did vital work that Brits were frequently unwilling to do, and to replace them the Government and employers have turned to Africa and Asia. The number of Indians, Nigerians, Somalians and others arriving in Britain has increased significantly since Brexit and is expected to keep on rising over the next ten years. New Delhi, for one, has made it clear that any comprehensive trade deal with India has to include an increase in the number of its citizens admitted to the UK.

Adding to the sense of helplessness, and a further example of unintended consequences, the flow of illegal immigrants crossing into England from France has greatly increased, not diminished, since we Took Back Control of our borders. What was a steady trickle of immigrants and asylum-seekers has become a flood. We can’t return them to Europe anymore; we can only hope to send them to Rwanda. Did anyone in the Leave camp forecast such an outlandish outcome? If they did, I must have  missed it. 

I will weather this latest storm, just as I (and many thousands of others) weathered the storm of losing our automatic right of residence in Europe. I already have a French bank account and over the next six months will do my best to ensure a final transition from London to (in my case) central Brittany. But it won’t be easy, and what makes it especially irritating is the fact that it doesn’t have to happen. Barclays could employ a small staff at their operational headquarters in Leicester to take care of people like me. But, like those wholesalers who refuse to service long-standing customers in Northern Ireland, they can’t be arsed. Too much paperwork for too little return. The bottom line is all that counts. Do I blame them? Yes I do. But am I surprised? Not hardly, as John Wayne would say. Buccaneering Britain was always about the big boys. It was never about me – or you.