A NEW report by a think tank has assessed the potential of a public development bank for Wales to boost lending to firms and promote economic development locally.
The report by the Public Policy Institute for Wales describes evidence that ‘bank branch closures are having a negative impact on individuals and businesses in Wales, but more specific research is need to ascertain what impact bank branch closures is having on individuals and communities. Finding out the extent to which vulnerable areas are affected by bank branch closures can also help identify which specific services can be provided in the future.’
The report states: “However, even the most extensive public banking model, opening community banks would not be able to replace the branches that have been closed in Wales in recent years.”
On ways to protect banking services it comments: “A public development bank is potentially useful option, but not a guaranteed solution.”
Plaid Cymru Mid and West AM Simon Thomas said: “We need action from Governments in Westminster and Wales on bank branch closures.
“It is unacceptable that the bank network is being stripped from rural Wales. We cannot have a gap in the banking services available to rural and urban Wales.
“Plaid Cymru’s Westminster leader Liz Saville Roberts has called for a change in the law to protect the last bank in town. We are now seeing often in our communities from Llandysul to Llanidloes towns left without a bank.
“While bank branches are expensive to maintain and are used by fewer people in the past they are still an important resource. The report highlights research by the Federation of Small Businesses that bank branch closures affect small businesses in rural communities, as they are more likely to require cash purchases than in urban areas.
“High street banks have a duty to consult effectively with the local community over closures. While banks are private companies making commercial decisions, in effect access to banking is essential for modern life and participating in democracy.”
“The Labour Government in Cardiff Bay should be looking at how other financial institutions like Finance Wales and credit unions have a role to play. Other ways to protect banking services for small businesses and individual customers like developing the services provided by the Post Office will be hampered by the closure programme of successive Westminster governments of different political colours.”
The report identifies problems with lending to small and medium sized businesses, automation has made banks more geographically and operationally distant from small businesses.
Bank closures contribute to this problem according to the Federation of Small Businesses.
Mike Cherry, FSB National Chairman, said: “The rapid pace of bank branch closures across the UK presents some very real and tough challenges for small businesses. FSB members highly value the face-to-face interaction they receive in-branch, particularly when making complex financial transactions, with staff who often have a greater understanding of their business and the local economy. In addition, many of our members deal heavily in cash and cheques and need access to over-the-counter banking facilities on a regular basis.
“Small businesses are keen to embrace the opportunities of the digital economy. However, barriers towards digital inclusion, such as unreliable broadband connectivity, and a lack of confidence in using digital services creates serious challenges. These are some of the reasons which explain why the protection of in-branch banking is so important for financial inclusion.”
Large banks were three times more likely to shut a branch in Wales than in London and the south east of England, and five of the top ten areas affected by the 600 branch closures in Britain in 2015-2016 were in Wales – Powys, Denbighshire, Gwynedd, Conwy, and Carmarthenshire.
The FUW is particularly concerned as internet banking is not always an option in rural areas; many people will not have an appropriate internet connection- if they have a connection at all, and especially the elderly may not be familiar with IT and the process of doing their banking online.
Speaking earlier this summer, FUW President Glyn Roberts said: “The closure of rural banks has a detrimental effect on rural areas, as they serve not only villages and small towns but many of the neighbourhoods in surrounding areas, as well as providing employment to local people.
“Closures are a great loss to residents and local businesses, particularly the elderly or residents who are unable to travel to the nearest town. The closures will of course also affect small businesses, as they will have to travel further afield for their banking needs.
“In addition, internet banking is not always an option in rural areas; many people will not have an appropriate internet connection if they have a connection at all, and especially the elderly may not be familiar with IT and the process of doing their banking online.
“For many telephone banking is impractical, as they prefer to deal with their personal finances on a one-to-one basis and mobile banking is limited in many rural areas. It is worth considering as well that some people may not be able to get to mobile banks during the short time they are present in villages.
“With more and more rural services and businesses being closed down, we must also acknowledge that it is becoming less and less attractive for young families and indeed business owners to remain in the countryside.
“If the problem of rural depopulation is not addressed with some urgency it could have severe consequences for our rural communities and with that also our rural economy.
“It is clear that if we want to ensure that Wales develops its full potential in being a rural economic powerhouse, we must make it attractive for working families to stay and also encourage vital services like business banking to remain available in our countryside.
“The provision of acceptable broadband services is an increasingly critical part of meeting the needs of rural Wales.”
A report from the British Infrastructure Group found nearly a quarter of Welsh constituencies appear in the worst 20 constituencies in the whole of the UK for broadband speed.
Halfway to Paradise
PARLIAMENT had its first opportunity to discuss the unsurprising revelation that the seriously wealth retain their serious wealth by means of aggressive tax avoidance schemes on Monday (Nov 6).
With the Chancellor of the Exchequer engaged elsewhere, questions were fielded by Financial Secretary to the Treasury and MP for Mid Devon, Mel Stride.
It appeared that Mr Stride was unprepared to admit that anything was at all untoward with tax avoidance schemes that only the rich and shameless can afford.
Adopting a startling line – prefigured by briefings to the right wing national media – Mr Stride averred that there was no ethical difference between a retail investment available to all UK residents, namely the ISA, and Apple sending out a questionnaire to British Crown Dependences asking them whether or not they would be so kind as to allow Apple to use a brass plate in one of them to ensure it did not have to pay that pesky tax on hundreds of billions in profits.
Never mind brass plate: Mr Stride’s stance had the appearance of brass neck.
In fact, he made great play of the fact that Labour – last in government seven years ago – had done nothing to close the tax loopholes the party now complained of during thirteen years in power. And he was helped in repeatedly avoiding – or perhaps evading – the main issue by being given the opportunity to underline that point by a number of tame questions posed by Conservative backbench stooges.
Shadow Chancellor John McDonnell, presented with the opportunity to make a decent and succinct point on the subject attempted to ask questions of Mel Stride, specifically with regard to investments made by the Duchy of Lancaster – whose current chancellor is Conservative MP Patrick Loughlin – on the Queen’s behalf in offshore tax vehicles.
He may as well have tried nailing jelly to the wall.
David Lammy invited the minister to explain the legitimate reasons for funnelling money offshore to avoid tax, when two-thirds of UK taxpayers are subject to PAYE and have no choice in the matter.
Mr Stride’s response was as remarkable for ducking the question as it was for its content.
“It may be that I want a trust for my children and I do not want it to be known publicly exactly how that trust will operate, for reasons of confidentiality,” Mr Stride suggested, indicating that all was preventing the average worker from availing themselves of the opportunity was a lack of ingenuity and the odd £10m knocking around to make such a vehicle worthwhile.
Jonathan Edwards’ question and its answer deserve full repetition to underline the extent to which the Financial Secretary to the Treasury was prepared to be candid.
Jonathan Edwards asked: “After nearly a decade of austerity, and with living standards facing their biggest squeeze in nearly a century, the public will, quite rightly, be outraged by the most recent revelations. The Treasury cannot run with both the foxes and the hounds on this, so will it back either the ordinary working people or the super-rich? Which will it be?”
So, the question is whether the government back the wealthy over the poor and acknowledge the outrage of those with no choice but to hand over their money to the Treasury.
Mr Stride’s response suggests he heard an entirely different question.
“The hon. Member talks about our having to live within our means, and it is, of course, right that we do that. He talks about the amount of money we need to bring in. What has been most unhelpful is that the previous Labour Government were so ineffective at bringing in tax, the tax gap became so high they cost our country over £40b. If they had had the same average level of tax gap in their last seven years in office as we have had in our seven years, we would be about £45 billion better off.”
An answer to the question actually posed was absent.
It was that sort of performance. Brazen, shameless, partisan, and deliberately obstructive.
Mr Stride will go far on that sort of form.
New leader for Welsh Liberal Democrats
JANE DODDS has been elected by Welsh Liberal Democrat Members as the party’s new Leader, beating Ceredigion candidate Elizabeth Evans in a keenly-fought contest.
Jane Dodds, Montgomeryshire Candidate and child protection social worker, takes over the role from Acting Leader Kirsty Williams immediately.
The result was announced to an audience of members in Cardiff by returning officer Lord German.
Jane Dodds, the new Welsh Liberal Democrat Leader, commented: “It is an honour to have been elected as the next leader of the Welsh Liberal Democrats – to focus my energy on bringing like-minded people together to rebuild our party and to re-establish the Welsh Liberal Democrats as the radical, progressive force of Welsh politics.
“I’d like to thank Liz Evans for running an excellent campaign and giving members a vital opportunity to discuss our next steps as a party. I’d also like to pay tribute to Mark Williams and Kirsty Williams for their unwavering commitment to our party.
“Wales needs the Welsh Liberal Democrats now more than ever. Wales needs the progressive, pragmatic, and reforming voice of Welsh Liberal Democrats in the Assembly and in Westminster to give us an exit from Brexit, a fresh look on creating more and better paid jobs, protecting our environment, and delivering on Kirsty Williams’ education reforms.
“We have been down, but we aren’t out, and I’m confident of what lies ahead for my party.”
Kirsty Williams AM, Welsh Liberal Democrat Cabinet Secretary for Education said: “The Welsh Liberal Democrat membership had two fantastic candidates to choose between. Two proud Welsh women with long records of standing up for their communities.
“What has become clear over the last few years is that nothing can be taken for granted. We must fight tooth and nail for the values that we liberals hold dear.
“I know that the Welsh Liberal Democrats will be safe in Jane’s hands. I know she has the skills, drive and energy as we look to rebuild this great party.”
Impact of Brexit on Wales discussed
PARLIAMENTARY questions last Thursday (Oct 26) were not easy for Secretary of State for Exiting the EU David Davis.
Nailed to the spot about pronouncements he had made to a committee of MPs the previous day which had rapidly been contradicted by the Prime Minister, he managed to combine apparent certainty that there was no tension between his position and government policy (whatever that turns out to be) with an unwillingness to acknowledge that anyone could conceivably be concerned about Parliamentary sovereignty being bypassed by the refusal to give it a vote on Brexit’s terms.
For those who backed Brexit on the principle that parliamentary sovereignty and the ability of the House of Commons to make and scrutinise legislation was of paramount importance, it was uncomfortable listening.
Bluster and bloody-mindedness, it is rapidly turning out, are no substitute for the ability to master a brief, understand it, express it, and stick to it.
In fact, the position was rendered even worse by statements made by the Ministers of State in Mr Davis’ own department the previous day that they had not even bothered to read, let alone understand, briefing papers prepared for them by their own civil servants on the potential impact of leaving the EU. You might suppose that ignorance is bliss and, if it is, the Minister wished to share its blessings widely by refusing others the opportunity to examine that of which they remain willfully – and, no doubt ecstatically, ignorant.
After being offered sympathy by Labour’s shadow Brexit minister Sir Kier Starmer for the difficulties in which he found himself, Mr Davis was successively hit by a series of exasperated questions – some from his own colleagues – to which he offered increasingly snappy and impatient answers.
Plaid Cymru’s Jonathan Edwards, who has the misfortune of seeming to be more familiar with Mr Davis’ brief than Mr Davis does himself and doomed to try to educate pork as a result, attempted to get a straight answer on whether or not the UK Government would seek endorsements for the Brexit deal – if any – from devolved administrations.
Jonathan Edwards reminded MPs that national and regional Parliaments within EU member states will all be consulted on the final withdrawal deal and that six months have been allocated for that process.
Mr Edwards asked Brexit Secretary David Davis that ‘in order to ensure that the future relationship works for every part of the British state’ did he agree that ‘the formal endorsement of the National Assembly for Wales, the Scottish Parliament and the Northern Ireland Assembly should be sought before any final deal is reached—or is it going to be a case of “Westminster knows best”?’
In response, Mr Davis again failed to guarantee Wales a voice in the deal, stating ‘this is a treaty for the United Kingdom’.
Bearing in mind the continued absence of any commitment to discuss with ministers within the devolved administration on any substantive points, it seems that the UK Government is increasingly determined to go its own way and drag the other nations of the UK along behind it.
Speaking after Mr Davis’ shambolic and ill-tempered performance, Jonathan Edwards said: “As I and my Plaid Cymru colleagues have said before: the British Government is using the Brexit process as a means of re-centralising power in Westminster, rolling back the progress we have made towards self-government in order to reinstate Westminster-rule.
“In his answer to me this week the Brexit Secretary once again fails to guarantee our democratically elected representatives in the Welsh Parliament a formal role in influencing the deal with the European Union. This is particularly concerning when we consider the profound economic differences between Wales and England.
“The position of the British Government is even more insulting when we consider that devolved governments within the other EU member states will have an opportunity to influence and effectively veto the deal. The British government needs to say why it refuses to afford the same right to the devolved governments here.”
However, on Monday (Oct 30) the UK Government made an effort to – at least partly – assuage those concerns.
First Minister Carwyn Jones met with Theresa May in Downing Street in an attempt to at least break down the conflict between the Senedd and Westminster on how a way forward might be found in relation to what Mr Jones had previously described as ‘a constitutional crisis’.
Speaking to BBC Wales after the meeting, Mr Jones said: “Progress is now being made in making sure there is agreement as to the way forward, not imposition. But that progress needs to continue. We’re not in a position yet to support the bill.
“The bill needs to change so the warm words that we hear are reflected on the face of the bill, and that means making sure that powers meant to come to Wales do come to Wales.”
Secretary of State for Wales Alun Cairns said: “I’m optimistic that the Welsh government will be able to respond to the new powers that they’ll get, but also that we’ll have a common framework around the UK that will work for business and for stakeholders and for investors.”
A No 10 spokesperson said Mrs May and Mr Jones ‘spoke about constructive dialogue at the recent Joint Ministerial Committee and the progress made on working together to establish principles on common frameworks’.
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