Claims that Nigel Farage’s private bank closed his account because it did not share his “values” are “scandalous”, a cabinet minister has said.

Grant Shapps described Coutts’ treatment of Mr Farage, the former UKIP leader, as “absolutely disgraceful” and urged the Financial Conduct Authority (FCA) “to do more on this”.

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Speaking to Sky News’ Kay Burley, the energy secretary said: “I think it is absolutely disgraceful.

“I don’t have to agree with everything Nigel Farage says to recognise that free speech is a very, very important part of our domestic life.

“What has happened with some of these banks through this regime, which is known as the PEP regime, or politically exposed people, is really actually scandalous.

“People shouldn’t have their bank accounts closed because of their political or any other view. And banks shouldn’t be refusing to open accounts on that basis as well.”

He said there was a “very long-running problem” of banks “misapplying the guidance and rules” by not just closing them, but refusing to open them in the first place.

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“It’s unacceptable and ministers are working on this moment.”

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Asked if legislation may be necessary to deal with the problem, he replied: “It may be. We’ll do whatever is required. But I think in the first place, the Financial Conduct Authority needs to get a grip of this.”

Mr Shapps’ comments come after Mr Farage claimed his bank account was closed down after Coutts decided his views “do not align with our values”.

The former UKIP leader said last month that the exclusive bank – used by the Royal Family – had written to him to tell him both his personal and business accounts were being closed, without providing an explanation.

Mr Farage claimed in a video on Twitter that this was because he was a “politically exposed person”, or PEP, and that closing his bank accounts was part of a plan to force him out of the UK.

But both the BBC and Financial Times reported that the bank did not want his custom as he did not have enough money in his accounts.

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Writing in The Daily Telegraph, Mr Farage said he had seen a 40-page document showing that while he met the “criteria for commercial retention”, his views – ranging from his position on LGBT+ rights and his friendship with former US president Donald Trump – meant the bank wanted him to leave.

Sky News has not seen the document.

“Between 2014 and 2016, when I first banked with Coutts, no problems ever arose. After Brexit became a reality, everything changed,” Mr Farage wrote.

He said the report claimed he was seen as “xenophobic and racist”, repeated claims he was a fascist in his schooldays, and said his previous remarks were “distasteful and appear increasingly out of touch with wider society”.

Sky News understands that the FCA is aware of the issued raised by Mr Farage and will be monitoring the issue.

A FCA spokesperson said: “While who banks do business with is ultimately a commercial decision for them, they should treat people fairly and ensure they meet their responsibilities under equality legislation.”

A Coutts spokesperson said: “Our ability to respond is restricted by our obligations of client confidentiality. Decisions to close accounts are not taken lightly and take into account a number of factors including commercial viability, reputational considerations, and legal and regulatory requirements.

“As the client has previously confirmed, alternative banking arrangements have been offered within the wider group.”

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