We've launched a weekly email to keep you updated on events happening in the Welsh Assembly.
Sign up now

7. Plaid Cymru Debate: Banking Services

February 15, 2017

32 speeches by…

  • Elin Jones
  • Adam Price
  • Mike Hedges
  • Kenneth Skates
  • Mark Isherwood
  • Llyr Huws Gruffydd
  • David Rowlands
  • Rhun ap Iowerth
  • Nick Ramsay
  • Darren Millar
  • Simon Thomas
…and 1 more speakers

Elin Jones

The next item on the agenda is the Plaid Cymru debate and I call on Adam Price to move the motion.

Adam Price

Diolch, Lywydd. Banking in Wales since we lost the last of our locally owned banks at the beginning of the twentieth century has been the financial equivalent of the branch plant economy, characterised by local branches of large shareholder-owned companies headquartered in the City of London. Wales has been a victim, in that sense, of the most centralised and highly concentrated banking system probably anywhere in the industrialised world, with a market share of over 85 per cent, I think, for the big five. We’re now entering a worrying new phase in that history of dominance, whereby even the branches of that branch plant economy are being closed, and large swathes of our country—rural communities, impoverished communities, not lucrative enough to achieve the kind of returns that modern banks are seeking—risk becoming a financial desert, without any form of comprehensive banking service. Wales is actually being hit more badly than most parts of the UK, and according to UBS, we probably stand to lose another 50 per cent of our remaining branch network over the next decade. Banks have presented this as part of a natural migration to online-only banking—the financial equivalent of processes that are under way in the economy elsewhere. And there’s an element of truth to this, but it’s also exaggerated by banks that are simply seeking to maximise profits by cutting costs associated with providing relationship banking, which does require universal coverage and face-to-face services. And the proof of that is that the rate of acceleration in branch closure is far greater than the decline in branch activity. And of course, it flies in the face of what people say. Research for the Competition and Markets Authority in 2015 found that 63 per cent of current account customers felt that having a convenient local branch was either essential or very important, and that rose to 76 per cent for those who are among the digitally excluded. Far from merely responding to changes in the marketplace, banks are actually choosing to close banks in poorer areas while retaining them—actually, they’re even opening new branches—in more affluent areas, particularly in London. They’re doing this regardless of the impact that a branch closure will have for the unbanked, the digitally excluded, the elderly, the disabled, those on a low income and those living in rural communities. And the impact on business in unbanked communities is particularly acute. Research by Move Your Money, the campaigning group, using British Bankers Association lending data, shows that bank branch closures dampen SME lending growth by 63 per cent, on average, in postcode areas that lose a bank branch. That figure rises to 104 per cent for postcode areas that lose their last bank in town. On average, postcode areas that lose their last bank in town receive £1.6 million a year less in lending over the course of a year. Sadly, banks don’t take into account the public interest or the effect a closure will have in making these decisions. These are predetermined closure announcements, there’s no consultation, and that’s why we find the access to banking protocol, referred to in one of the Conservative amendments, wholly inadequate. The existing model of banking in this country, which is based on supposed competition between these dominant big five, we contend is broken. The so-called challenger banks are targeting already affluent areas, or in the case digital-only banks, younger customers, not those areas that are underserved. The poorest are most likely to lack access to banking, and small business is neglected and lending, as we know, is disproportionately focused on London and the south-east of England. Alternative institutions do exist—some of those who are part of the Responsible Finance network referred to in the Conservative amendment—but they struggle to compete in a system set up to privilege the big banks. What we need, we believe, is a more diverse banking system. Most other countries have a mixed economy in banking, which provides both greater stability and public accountability. We need access to finance for underserved groups to be recognised as a public good, and that’s why we’re asking the Welsh Government to take a more active role in the provision of this basic and essential service. The Government already accepts the principle of direct intervention as a result of market failure in financial services. That, after all, was the rationale for the creation of Finance Wales back in 2002, and it remains the rationale for the creation of the new development bank. Of course, the development bank will carry the name ‘bank’, but it’s not currently intended to be a deposit-taking institution. It uses revolving or evergreen funds to provide debt capital or long-term equity, leveraging through partnering with other funders rather than using the tool of fractional reserve banking to create credit in the way that banks traditionally do. That’s why I think we do need to create a public bank for Wales, so that we can use that tool of leverage and actually provide that capital at a greater level throughout our communities more equitably. There are three potential models that could be followed: one would involve the development bank working in partnership with existing financial institutions to provide access to services, possibly via a network of last-bank-in-town shared facilities. It’s the kind of arrangement or partnership that the often-quoted Bank of North Dakota, which is publicly owned, has with private sector banks in its own state. That said, many of the institutions that the Bank of North Dakota co-operate with are themselves community banks, which are a very important part of the US equivalent of the mixed economy in banking, and UK banks thus far have shown very little enthusiasm for this model of neutral shared branches that was long promoted by the Campaign for Community Banking Services. A second option would be for the development bank to help capitalise a network of local savings banks in conjunction with local authorities, similar to the model we see in the sparkassen of Germany, for example, or the cantonal banks in Switzerland. Shared services in terms of the back office could be provided by the national development bank to this network of local savings banks. This is the model being promoted by the Community Savings Bank Association, which is already being trialled in Hampshire with the assistance of the international sparkassen foundation. A third option is to partner with one of the few successful financial institutions that we have in Wales that is still locally owned, the Principality. It was very good to see them report excellent financial results today. The option there is to help them to develop even further into a mutually owned clearing bank. We’re entirely open on the means, but the goal of ensuring a people’s bank of Wales is one that should unite us all in this Chamber. Now that the current banks are turning their backs in ever increasing numbers on our people, it’s time actually to create a bank for the people here in Wales. I’ll give way.

Mike Hedges

I heard what you said, but can you just confirm that you wish the Principality, whatever happens, to stay mutually owned, not turn into the type of bank that happened previously, most of which—in fact, all of which—went into financial problems?

Adam Price

Oh, absolutely, and Mike Hedges raises a very important point, of course. We had aspects, didn’t we, of a mixed economy in banking in decades gone by? We had, before the disastrous policy of demutualisation, which laid waste to our successful building societies in large part—some of those remain, of course, and are very successful indeed, and some of them are also opening branches, but opening them, possibly, not necessarily just in the leafy lanes of London—we also had the savings banks, didn’t we? They were a network and united under the banner of the Trustee Savings Bank, and yet again that was disastrously privatised and sadly the last one has now closed. Wales could, like Catalonia, build up a powerful, public-purpose financial institution like La Caixa, which has grown from its roots as a savings bank aimed at the working class of Barcelona to what it is today, one of the largest, most successful banks in Catalonia, delivering €500 million a year to its associated charity, making it the third-biggest charity in the entire world. That’s what putting the people’s money in a people’s bank could achieve for Wales if we had similar boldness and imagination.

Elin Jones

I have selected the four amendments to the motion. If amendment 1 is agreed, amendment 2 will be deselected. I call on the Cabinet Secretary for economy to move formally amendment 1, tabled in the name of Jane Hutt.

Elin Jones

I call on Mark Isherwood to move amendments 2, 3 and 4, tabled in the name of Paul Davies—Mark Isherwood.

Mark Isherwood

Diolch, Lywydd. Having an accessible local branch is important for older people, those without transport or internet access, shopkeepers, small businesses and others. Unlike the idiots who were allowed to wreck our banking system, I am a qualified banker, previously working in the building society sector, mutual, who has campaigned against branch closures in both sectors. Speaking here in November 2013 after HSBC announced the closure of branches in Llangollen, Conwy and Beaumaris, I highlighted concerns raised by constituents about the impact this would have on them, businesses in their towns, their communities, and the thousands of tourists visiting their area. The branch that starred in a NatWest tv advert pledging to keep every branch open as long as it was the last in the community was shut. A year ago, Barclays announced plans to shut its branch in Buckley, Flintshire, with accounts moved to Mold, a six-mile round trip. This was the third bank to announce a closure in the town in six months. Following HSBC’s announcement of branch closures in Chirk and Ruabon, customers noted that there were often queues in these two branches and asked, ‘Doesn’t HSBC take into account the knock-on effect of closure on the surrounding areas and businesses as well as the two towns themselves? After HSBC announced the closure of their Ewloe and Caergwrle branches last year, I wrote to them and met them again, emphasising that, although HSBC again blamed a rise in telephone and internet banking, concerns had once again been raised by constituents regarding the impact this would have on them and their communities. I also emphasised, yes, the access to banking protocol, which came into effect in May 2015 to help minimise the impact of bank branch closures on customers and local communities, requiring a pre-closure assessment of the impact of any proposed closure on the wider community, including businesses, outlined consultation and community engagement requirements, and ensuring continuing provision of alternative ways to bank. In their response, they said that they had adhered to the protocol, were discussing alternative solutions with customers, and that decisions to close followed a full study of customer activity at each branch, increased customer use of digital banking, and the proximity of the nearest post office where their customers can access their services. I received a similar response from NatWest after they announced the closure of their Holywell branch, which also noted they would introduce a mobile branch every Wednesday. Earlier this month, I raised HSBC’s further planned closures in Holywell, Holyhead and Llanrwst, and Yorkshire Building Society’s planned closures in Abergele, Prestatyn and Llangefni, here with the First Minister. The fact that this is also affecting mutual building societies, however, emphasises that this is about wider considerations than private profit. Our amendment 2 calls on the Welsh Government to examine the not-for-profit community banking model developed in Wales by Responsible Finance, working with credit unions where credit unions can’t, raising capital from other social enterprises, businesses, local authorities and town councils, and providing finance and support for people, businesses, and social enterprises that cannot access finance from high street banks. They’re working with others, including the Welsh Local Government Association, Cartrefi Cymru and the Wales Co-operative Centre, to develop a public bank model, but are currently receiving no support from the Welsh Government. They’re concerned that the Welsh Government’s development bank could end up competing with them at higher cost when there’s a compelling business case for the Welsh Government to support them with very limited funds. They state that £100,000 of Welsh Government funding, for example, would enable £3 million of lending, and that they can deliver jobs for £4,000 that would cost the Welsh Government model £35,000 each. So, let’s not reinvent the wheel: let’s go with the model that’s already developing in the third sector in Wales. Our amendment 3 welcomes the independent ‘Access to Banking Protocol—One Year on Review’ by Professor Russel Griggs OBE, published in November 2016. Its recommendations include making branch closure impact assessments more specific and personal to the area and early bank engagement with customers. Our amendment 4 welcomes the new Post Office partnership agreement with UK banks, which brings together the Post Office’s existing arrangements with individual banks into a single set of services available to customers of virtually all UK banks. This simplified service will allow personal and business customers to withdraw cash, deposit cash and cheques, and make balance enquiries at Post Office branches, but crucially also help post offices’ presence on our high streets—or help protect post offices’ presence on our high streets, something people here have often called for. I therefore urge you to support our amendments, although Welsh Conservatives will support whichever final motion we arrive at in order to send a strong and consistent message.

Llyr Huws Gruffydd

I will start by making reference to what Adam mentioned in his opening speech, and that’s the fact that the largest banks tend to close banks in disproportionate numbers in our poorest areas—those with the lowest incomes—while opening branches in some of the best-off areas. Reuters research shows that more than 90 per cent of the banks that closed between April 2015 and April 2016 closed in areas that had a median household income below the UK average, whilst, at the same time, during the same period, five of the eight branches that opened opened in London, in Chelsea, Canary Wharf, St Paul’s, and so on, in the most prosperous areas. Indeed, the large banks are three times as likely to close banks in Wales as they are in the south-east of England, if you look at the population size. So it’s about time that we looked at alternative arrangements and means of responding positively to the situation. One does get the impression that there is some sort of stampede now amongst the banks to not be the last bank to close in a town, because they know how much more difficult it will be for them to close in those circumstances. We’ve all heard the banks saying—and I heard it about Corwen a few years ago—’Well, don’t worry, you can take your services to Llangollen, just a few miles down the road’. The following year, Llangollen closed down—the Cabinet Secretary is more than aware of this; it’s in his constituency. Llangollen closes, there’s talk of Ruabon and Chirk, of course—now, Wrexham. The same thing happened in Betws-y-Coed: closure in Betws-y-Coed—’Go to Llanrwst’. Llanrwst is closing, so you now have to go to Llandudno. The services are going further and further away from the population and that is not acceptable. It appears that after HSBC in Llanrwst closes—and we haven’t given up yet on that, but when it does close, if the bank gets its way—there will be over 2,000 square miles of my region of north Wales without a branch or a bank. It’s this desert that Adam Price referred to in terms of banking services: a journey of 50 miles in total to access bank services. We know, of course, it’s older people who are most reliant on bank branches, and they are also the ones most reliant, very often, on public transport, which in and of itself creates all sorts of difficulties, and those, of course, who are least likely to be using online banking or telephone banking services. And we know about the quality of those services in certain areas of Wales—they’re among the worst in Britain. I do feel that we should be asking some of these banks, ‘If you are serious about insisting that people access your services online or via mobile phones, shouldn’t you be creating a fund and contributing towards ensuring that the infrastructure is in place, so that your customers can access your services?’ Llanrwst Town Council, for example, has called on HSBC to delay the closure of the branch until each and every one of its customers in that area can get access from their homes to the internet and to a mobile phone signal. Now, we’ve also heard about the impact on small businesses, and it’s a significant impact. The HSBC branch in Cerrigydrudion was closed; there’s no bank there. I know of at least one business that has to close for half a day in order to go to bank their takings elsewhere and come back, and that is a concern. Services for businesses aren’t often available in many of these branches. If you want to speak to a business consultant in north Wales, you have to go to Llandudno or to Bangor, and the banks complain that the footfall is down in their branches. Well, there’s no surprise there, when they themselves are centralising some of these services. These branches, we mustn’t forget, are still generating an income. They’re not running at a loss—it’s just clear that they’re not making enough of a profit for many of these banks. We’ve heard about the impact of branch closures on borrowing in banks, too. And the banks are more than financial institutions, of course. They are part of the community infrastructure, they are cornerstones of our high streets and they are iconic buildings, very often, on our high streets. They are historic buildings, and, when those are left vacant, well, the high street is depleted and they become eyesores. In an area such as Rhuthin, where NatWest has announced that they’re to close, NatWest, of course, is in the old courthouse building on the town square, the most iconic building in the town—a building built in the fifteenth century in the years after Owain Glyndŵr ransacked the town. You can still see the remains of the old gallows last used in 1679 there. And so what kind of mark will that leave on the high street in Rhuthin if that building falls into disrepair and is unused? Mae yna alwadau wedi bod, wrth gwrs, i greu dyletswydd i drosglwyddo rhai o’r adeiladau pwysig yma i ddefnydd cyhoeddus, efallai am rent isel ac yn y blaen. Mae yna lawer iawn mwy rydw i’n teimlo y gallwn ni fod yn ei wneud. Yr hyn sy’n bwysig yw ei bod i fyny i ni i greu dyfodol amgen pan fo’n dod i fancio. Mi fyddai banc cyhoeddus i Gymru yn sicr yn rhan o’r ateb ond rydw i’n meddwl bod yna lawer mwy y gallwn ni ei wneud i roi pwysau ar y banciau hefyd i fod yn cyfrannu mewn ffyrdd eraill i sicrhau nad yw’r ffaith eu bod nhw’n gadael rhai o’r cymunedau yma yn gadael problemau ar eu hôl.

David Rowlands

UKIP broadly supports the motion and welcomes the opportunity to take part in this debate. Whilst we recognise the excellent work done by the credit unions and Plaid’s desire to see the remit expanded, we’re not too sure about the aspiration to a Welsh people’s bank, which sounds far too much like an institution from North Korea. But we do acknowledge that it is desirable for there to be an alternative to the monopoly of the commercial banks, especially as, as has been said before, they’re disappearing at an alarming rate from our high streets. It is hoped that credit unions will play an increasing role in filling the gap in loans to the general public and hopefully replace pay-day loans, which prey on the most vulnerable in our society. We also recognise the financial gap that exists between the credit facilities offered by commercial banks and those that are required by business, especially in the higher risk sector of business start-ups, microbusinesses, and SMEs. We acknowledge the Welsh Government’s efforts in establishing such institutions as Finance Wales to try to bridge this gap, but feel that Wales must now move forward to a more recognisable banking model. It is true that the development bank of Wales is a step in this direction, but its very name is more redolent of an institution involved in large-scale economic projects rather than one that exists to lend to individuals and the business sector mentioned earlier. In other words, the bank’s remit should be explicit in its name and, therefore, perhaps the people’s bank of Wales wasn’t such a bad suggestion after all. [Laughter.] It is also critical that the services—[Interruption.] It is also critical that the services the bank offers are not fragmented. It needs to be a one-stop shop that will cater for all sections of the business sector, albeit with different levels of engagement. Keeping all lending functions and bands under one roof avoids confusion as to the relevant lender for those seeking access to funds. The application for funding must be as simple and straightforward as possible. The current model of multiple agencies is confusing to would-be applicants and this often discourages their engagement. It is true that the Welsh Government has invested in a number of enterprises that did not perform as had been anticipated. But, as someone who spent 40 years in the private business sector, I know that there is risk in every business venture. I would urge the Welsh Government not to be discouraged by these unavoidable setbacks, especially as their lending is often to the high-risk sector. Readily available finance is the most vital ingredient in our efforts to expand the Welsh economy. The Welsh Government must be at the forefront of this provision. We shall be supporting the motion. Thank you.

Rhun ap Iowerth

It’s quite clear that there is a pattern developing, and several Members have referred to it already—this pattern of centralising in a number of regional hubs, and what’s happening on Anglesey is an excellent example of this. On Anglesey, with the exception of Holy Island, it’s only in Llangefni that there will be any full-time bank open at all. Barclays is open part-time in Amlwch, but Holyhead, as the main populated area of Anglesey, has also heard recently that they will be losing their HSBC branch. So, there’s a pattern developing here. The announcements that we’ve heard recently are: closing NatWest in Amlwch, in Holyhead, in Beaumaris and in Menai Bridge, and HSBC going in Holyhead, in Amlwch, in Menai Bridge and Beaumaris recently. It’s not just the banks either, but financial institutions more widely—Yorkshire Building Society in Llangefni is also going to close. If I give attention to Beaumaris for a moment, in the same way that we heard from Llyr Gruffydd about services being sucked away, when the announcement was made by NatWest and HSBC about closing in Beaumaris: ‘Don’t worry—Menai Bridge is only four miles away.’ But now we’ve heard that the branches in Menai Bridge are also closing. The reason we hear is that there’s more banking happening online; of course, that is factually accurate. There are lots of services available in the post office, we hear; of course that’s also true. But with all respect to post offices that are offering more and more services for paying in and withdrawing funds, the advice, the additional services and the support available through branches is not available. That’s the kind of support that the most vulnerable people do require. I don’t expect to see a return to the days where every small town has every branch of bank, but it’s important to ensure that there are basic financial services available to all within a sensible distance. With regard to the consultations taking place, I have a letter from NatWest here about the closure of the Menai Bridge branch saying that there are five ATMs within a mile of the branch, so what does it matter that that particular ATM will be lost? Well, what I pointed out to NatWest was that four of those are on the mainland—one of them in Ysbyty Gwynedd and one of them in Coleg Menai; that is, misleading people by giving the impression that alternative services are available. There aren’t; there’s only one available in Menai Bridge, as it happens, and that itself isn’t in the town centre. There are, I think, a number of solutions or perhaps responses that we can look at. I believe that we should be seeking to put the onus on the banking and finance sector to provide a minimum level of access. As I said, that’s not a matter of saying, ‘Let’s have every branch open in every town’ as was the case years ago, but making it a duty for the sector to ensure that there is at least a suitable level of access. Plaid Cymru in the UK Parliament have requested that Government introduces a ‘last bank in town’ status as part of the British Bankers’ Association legislation. [Interruption.] I’ll come to you in a second. And here, of course, I sound that warning that we can’t have a race by the banks to make sure that they’re not the last bank in town.

Nick Ramsay

Thanks for giving way. You can tell I haven’t got my name in for this debate, so I’ve got to do it this way. I totally agree with your last point that this doesn’t mean going back to the old model of having a local branch everywhere, but do you agree with me—I assume you do agree—that the new bank, whatever form it takes, does need to have a strong local presence, whether that’s virtual, internet or whatever form it may be? It’s important that people know where it is, and that it’s not in some—I was going to say ‘smoky’, but that’s wrong expression, now, isn’t it—some dark corridor somewhere.

Rhun ap Iowerth

That access is vital, and we’ve already heard suggestions about how there could be shared facilities, perhaps including the current established financial sector, plus also the exciting prospect such as a Welsh people’s bank that could give us an exciting way forward, responding to a necessary situation. This is a crisis that we are facing of the haemorrhaging of our financial institutions. This isn’t a pipe dream. When we look at the North Dakota bank and see that it is a hugely profitable bank, able to pump money back into infrastructure projects in North Dakota, where the Government deposits its finances with that bank in order to ensure that there is a continuous flow of money, these are exciting prospects that I believe we can’t afford to ignore. Necessity is the mother of invention, they say. We know what is necessary; we need to make sure that we stand up to the haemorrhaging of financial institutions. We cannot continue to let that haemorrhaging go unchallenged.

Darren Millar

I’m grateful for the opportunity to take part in this debate. I just want to make a brief contribution, because lots of points have already been made about the banking sector and the need to better serve its customers. There are three banks that are currently threatened with closure in my own constituency at the moment, two of them in a single town in Abergele, which also saw a bank close just a couple of years ago in the NatWest. Now it’s the HSBC that have announced that they’re intending to close a branch, and the Yorkshire Building Society. So, it’s obviously not just about profits if a building society is planning to close. But I have, on behalf of my constituents, obviously, met with the organisations concerned and expressed my very strong objections to their plans. What really concerns me is that those particular banking organisations didn’t appear to have let their staff know before the announcement was made to the media and in the public domain, which I think is a great disservice to the hardworking members of staff in those particular branches. In terms of the HSBC, they’re going to leave a huge vacant building on the high street in a very prominent location, which was actually the old Abergele Urban District Council building, and I think it’s incumbent upon them to ensure that they look at potential alternative uses for that particular building and work with the community, if they are going to close the branch, to ensure that that building is put to good use and for a community use in a way that it is still a civic asset, as it were. In addition, the Yorkshire Building Society have told me that the footfall in their branch has diminished significantly in recent years. They did only three mortgages over the last 12 months, so I think it’s also incumbent upon customers of the banks to make use of these resources when they are available on the high streets, because, frankly, I can understand the point of that particular branch saying it’s just not viable for us to be able to have a presence here in the town in the way that we traditionally have. Now, in fairness to the Yorkshire Building Society, they are looking at the opportunities to develop an agency sort of counter service with local solicitors or in another appropriate place in the town, and I think that that is something that we ought to encourage more of, even in places where there is no branch at the moment, from a bank that might be able to develop a presence in a town or location. Llyr Huws Gruffydd mentioned the NatWest bank in Ruthin, which is in a very prominent and very historic building in the town—one of the finest timber-frame buildings, I would say, in the country. The Cabinet Secretary will know that I’ve written to him asking whether Cadw, or somebody else, might be able to step in in order to safeguard the future of that building. I think it is important that—. It’s had a long history of public service as a building, whether as a bank, as a courthouse with the gallows outside, or in other ways, and I think that to vacate some of these places with relatively short notice is very irresponsible of the banks involved. Now, in fairness to NatWest, they’re trying, again, to maintain a sort of presence in the community through offering other mobile services, but frankly, it’s not the same, and they really are letting their customers down. So, I think, Cabinet Secretary, what I’m really looking for when you’re responding to this debate is not just sympathy. It’s not just to say that you’ve made representations to the UK Government either, but it’s to see what we can do creatively in Wales in order to expand the presence of banking services across the country so that people can have them in an accessible way. We’ve heard a lot about the way that the post offices are picking up, if you like, a lot of the mess that the banks are leaving behind when they exit some of our communities, and that’s great—it’s good business, no doubt, in terms of transactional business for those post offices. But they are a different beast, post offices. Some people want to share things privately in a bank in a way that they can’t necessarily do in a post office location at a counter that’s full of people waiting to collect their pensions or whatever else they might be in the post office to do. So, I think some sort of approach here where there could be a national people’s bank is a good way forward. If that can deliver some profits back to the taxpayer here in Wales, then I think that’s another huge benefit that we could possibly derive. I think that when we’re talking about the sort of investment that could be coming down the pipeline in terms of capital investment projects as a result of some of the dividend from the last autumn statement, then there’s a slab of cash there that might usefully be used in order to act as capital for a bank to lend in order to make a return for the taxpayer. I wonder whether you could just comment a little bit about how that might develop, whether that might be a partnership with other banks or whether it might be a stand-alone thing that the Government itself takes forward. Thank you.

Simon Thomas

I think, given the position that we’re in, that this has been a very measured debate. The banks, at present, are depriving many communities and many individuals of important services, and it’s now not possible to be a full citizen unless you have full access to banking services. That’s what the modern world entails. If you don’t have access to a banking system, you will lose out greatly within the current economic structure. Bearing in mind the billions of pounds—some thousand billion pounds—invested in the banks over the past decade in order to save them from a situation that they themselves have created, to see now that they are turning their backs on the communities that paid to support and maintain the viability of those banks is very disappointing indeed.So, I would support any statutory efforts in terms of ensuring that the last branch is saved, or any other efforts, as we have seen with mobile phone companies, where you require people to use other equipment, because unless you do that, you will see everyone withdrawing from rural communities, specifically, and leaving a desert behind them. So, we do need a statutory approach. But there is something more positive in this debate too, when we’re talking about this concept of a people’s bank of Wales, which has been aired. I do think, when you consider the money flowing through Welsh banks, through the local authorities, through the health service and through the Welsh Government—money that’s being held in the main banks—well, there’s nothing stopping that being held in a separate Welsh people’s bank in order to generate revenue and capital that would be available, then, for investment and maintaining that kind of network. It’s very disappointing, in rural areas, that full consideration isn’t being given to the fact that broadband isn’t available to all; that not everyone can use digital means. But more importantly, it shouldn’t be possible to withdraw physical services— In just a second, I will, yes. [Continues.]—such as bank branches without an assurance that broadband should be available to everyone served by that branch. I will give way to Mike Hedges.

Mike Hedges

Thank you for taking an intervention. Would you also agree that there are a lot of people, especially amongst the elderly, who don’t want to do their banking online, don’t want to use a computer for doing their banking and want to go and visit their local bank?

Simon Thomas

I certainly do. I bought my mother an iPad for Christmas. I don’t know how she’s getting on with it. I think she’s Julie James’s constituent, not yours, now, Mike, but she’s in Swansea trying to make use of an iPad. However, she was very reliant on the bank to help her get a head start on some of the things that you can do now in digital. So, there’s a real commitment there, a community commitment, that needs to happen. I agree entirely with that point. To highlight that point, it is true to say that people are using branches less and less, and the greatest growth isn’t online; it’s on mobile phones and the banking apps available, and that’s where the greatest growth is. There is a little bit of risk entailed here, because it does mean that easy credit is available without people, necessarily, discussing whether they have particular credit needs and can they really afford to take these loans. When you go into a bank—. I remember getting my first mortgage, and it was like going through some court of law, standing in front of the bank manager. Now, you can do it online and there are people offering you a mortgage decision in half an hour or an hour. I’m not quite sure that this is the kind of fiscal culture and the information about financial needs we want to see developing here in Wales. There are some specific issues too. The closure of a main branch in a town, particularly a market town—and there’s a recent example in my region, in Porthmadog—has a psychological impact on the town. We’ve already heard about the buildings and how important buildings can be, but people feel that they are losing something that was an important part of their community. There may be an echo here of the time when banks were truly local banks. It was your Lloyds, TSB or Bank of the Black Sheep. People are now feeling that they are losing something, which is important to them. Small businesses particularly feel that impact. The chair of the Federation of Small Businesses, Janet Jones, said that small businesses want a relationship not with the branch but with the people in that branch and the people managing their accounts. Just to conclude, Presiding Officer, the banks do owe us a little bit. We bailed them out 10 years ago. We allowed them to continue—we allowed them to continue with their rather rapacious way of retail and wholesale banking as well. They now have to pay some attention to the real democratic needs of our citizens. Access to banking services is an absolute fundamental right. It’s no longer a privilege; it is a right. You can’t be a full citizen unless you’ve got access to banking services. We have to work with banks, work with post offices and work with alternative models, but they have to work with us as well to ensure that we don’t denude our communities.

Kenneth Skates

Thank you, Presiding Officer. Can I thank Plaid Cymru for bringing forward this important debate today and for the many contributions from Members across the Chamber? I’m very well aware of a number of the banks that have been mentioned today. Darren Millar and Llyr Huws Gruffydd both identified the Ruthin bank—the NatWest bank. I recall being told, not too long ago, when a NatWest bank in my constituency, in Brymbo, was closing, that, rest assured, Mold and Ruthin were safe. Now, we see Ruthin at threat. I will be warning my colleague, the Member for Delyn, that she should make representations direct to NatWest to get assurance that that branch is safe. As a Welsh Government, we too are deeply concerned at the negative impact that bank closures can have on local businesses and citizens. In many communities, banks, along with hairdressers, post offices, convenience stores and, indeed, pubs are the glue of our communities, and it is particularly the case in deprived and rural areas. Llyr Huws Gruffydd identified, through the data, the very fact that it is those communities that are hurting the most from the decision by high-street banks to close branches. The closure of local services can have a significant and detrimental impact on individuals, on businesses and, indeed, on whole communities. Although the regulation of the banking industry is a non-devolved area, and decisions on branch closures are entirely commercial matters for the banks, we are keen to use all of the levers at our disposal to ensure that businesses and individuals across Wales have access to high-quality banking facilities, including cash deposit and collection facilities. We want to help mitigate the loss of any branch and cashpoint facility in Wales where it is possible. Perhaps my constituency is a prime example of the severe loss of branches. I now have, even though I represent the largest of all Labour constituencies, just one branch left in the constituency of Clwyd South. Yes, indeed.

Darren Millar

I’m grateful to you for taking an intervention. Would you agree with me that what we actually need is some sort of universal service obligation where nobody lives above a certain distance from their local branch? We’ve got a similar sort of arrangement with post offices. You know, there are universal service obligations for some utility companies. Isn’t this one of those essential services that everybody ought to be able to have access to?

Kenneth Skates

I would agree with the Member that everybody should be able to access a bank within a certain distance. This is something that we called on the UK Government to examine very carefully. I’ll come to the Griggs review shortly, but I think the Member is right in his assertion. Financial innovation and trends in society have clearly led to many branch closures. Many Members today have spoken of the huge strides that have taken place in terms of emerging digital technology. Of course, the financial crisis back in 2008 resulted in a number of branches closing due to banks consolidating and merging. The British Bankers’ Association estimate that as a consequence of changes to digital technology and new applications, and bank mergers, the number of people going into branches fell by around 30 per cent between 2012 and 2015—a remarkable fall in such a short space of time. In terms of paying in money and making withdrawals over the counter, I think it is important to remember that 95 per cent of all banking customers can access their bank accounts via the Post Office. This is particularly important in areas where banks have closed. Although Post Office matters are, of course, a non-devolved matter, we are keen to support post offices across Wales. In January, it was announced that the Post Office had signed an agreement to provide nearly all of the large banks’ personal customers and 75 per cent of its small business clients with some face-to-face services, such as depositing cash and cheques and reviewing bank balances. Now, before that announcement, various banks offered more limited access through the Post Office, covering just 40 per cent of business customers. The new deal includes the established high-street banks and some of the challengers, such as TSB and Virgin Money. Although I realise that post offices can’t replace bank branches, this development is welcome, and I will continue to encourage banks and the Post Office to do all they can to ensure our communities and businesses benefit from this initiative. Turning to the Griggs review, it made a number of recommendations to improve the way the banks engage with those communities facing branch closures. It includes working with small business customers to see how they can further mitigate the challenge of cash deposit and collection that closures bring to some of them. The recommendations also included the need for better engagement and communication between the banks and their customers, and to carry out meaningful, genuine consultation if a branch faces closure. This is something I have raised with Barclays and HSBC over the past few months, encouraging them to implement Professor Griggs’s recommendations and to work closely with the Post Office to ensure our communities and businesses benefit from these initiatives. I know that the First Minister discussed these matters with the CEO of RBS just recently as well. Promoting financial inclusion is a key priority for the Welsh Government during the fifth Assembly. The 2016 financial inclusion strategy sets out how we aspire to work with partner organisations in Wales and at a UK level to improve access to affordable credit and financial services. The financial inclusion delivery plan was published in December, and it sets out the actions and measures required to increase financial inclusion across the country. The actions and financial implications of the plan are not only for Welsh Government. It aligns with the actions contained within related strategies, including the financial capability strategy for Wales, the Wales credit union strategy, and the information and advice action plan, to reflect the strategic approach being taken. So, I am pleased to respond to this debate today. Members have spoken of the importance of credit unions, and there is no doubt that they can and should grow stronger, potentially through strategic mergers. With regard to the suggestion from Plaid—a people’s bank—discussion has already taken place with the PPIW to assess such a concept. That work should be undertaken with due regard to the creation of the development bank for Wales, which Members have spoken of, as well as new and emerging digital technologies, the potential of credit unions, and new financial institutions, such as Chetwood, which I was delighted to announce is moving to north Wales from London just last week. As I say, I am pleased to be able to respond to this debate today and to assure Members—

Adam Price

I was very pleased to hear this announcement about the PPIW report. When does he expect that report to be concluded, and will it be published, and can we have a statement for the Assembly?

Kenneth Skates

I believe that PPIW reports are normally published with access for Assembly Members, and certainly for Government Ministers, and the work will be undertaken, I believe, during the autumn, once early lessons from the operation of the development bank can be assessed. I think it will be an important and timely piece of work, but, as I say, it will need to take into account not only the development bank of Wales, but also the potential of credit unions, indeed, the additional services that are being rolled out by the Post Office, and new financial institutions. And I think that commitment demonstrates as well that we are exploring a range of options and interventions. Traditional bank branches might be reducing in number, but the need for accessible banking services, certainly, is not, and that’s why we are committed to supporting post offices, credit unions, new financial institutions, a development bank of Wales, and any other novel intervention at our disposal.

Adam Price

Well, I was starting to be concerned that motions in this place didn’t have any effect at all, but I’m very pleased to hear at least that we are going to have an inquiry into this idea of alternative models and creating new institutions, including the possibility of a form of public bank or people’s bank—whatever you want to call it, the same principle applies. I’m sure that Members across the Chamber will look forward very much to seeing the result of that inquiry. I very much welcome what the Cabinet Secretary said, despite the fact that banking regulation hasn’t been devolved. It does therefore restrict what we can do here, but that doesn’t mean that we shouldn’t try to use every lever available to us, because that is our responsibility here. As Darren Millar said, we should be thinking creatively. The analysis of the problem in this case is divided, to a great extent, across the Chamber, on the basis of the contributions that we’ve heard, and on the basis of the experiences that we’ve all faced as Members. So, the response is to think innovatively and creatively and ambitiously. So, I welcome very much the Cabinet Secretary’s commitment to doing what the motion sought from the Welsh Government, which is to ask the question: could we create a new banking model for Wales that is better than what is already on offer? Mark Isherwood, of course—

Mark Isherwood

Sorry, you may be about to answer my question, but do you welcome the fact that the four non-profit community banks in Responsible Finance are already working with the Welsh Local Government Association, Cartrefi Cymru, the Wales Co-operative Centre and others to develop the very sort of model that you’re proposing?

Adam Price

Yes, certainly, and a number of those organisations are members of the new group that is considering a public bank for Wales. I’m also aware of the work of Robert Owen Community Banking and so on. So, yes, what we want, of course, is more variety in the financial sector and to build on what already exists, including credit unions, where they have a very important role, and we want to see how we can strengthen that role, as well. I welcomed the comments made by David Rowlands. He changed his opinion about the name, but we’ll set the name aside for now; that, of course, isn’t the predominant theme of today’s debate, but it’s the purpose. And he’s right, of course—In thinking about the problems faced by small businesses, working capital, very often, is part of the problem. What we need, therefore, is a bank that can take deposits and that can move quickly on these issues, and so on. So, I think that’s what the majority of small businesses are hoping to see with the development bank. So, this is an opportunity, now, with the study that has been announced, to look at that wider question. A number of my fellow Members here today have talked about the different dimensions of the crisis that we’re facing. And it is a crisis, and it’s only going to get worse, so why don’t we move ahead of that crisis and make plans ahead of time about the kind of innovative alternative model that is clear from the contributions that we’ve heard today, and which does have wide-ranging support across the parties—this idea of not just having a development bank in a narrower sense, but a public bank for Wales that can fulfil the needs of all aspects of life in Wales, individuals and businesses, that are at present disenfranchised by the mainstream banks in the private sector?

Elin Jones

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] I will defer voting on this item until voting time.