5. How is the Welsh Government supporting community banking services? OQ57038

The Welsh Government supports credit unions that provide an alternative community banking service. We also work with LINK, which runs a financial inclusion programme to protect access to free cash for all, but especially for those in more deprived communities where there is a greater reliance on cash.

Many thanks, Minister, for your response there. Members across this Chamber, of course, will have supported their communities in attempting to keep banks in their own constituencies, and as we all know in this Chamber, the banks will perhaps receive those petitions and then go ahead and ignore, and banks will close. But, of course, I've been a long-time advocate myself, Minister, of a community banking model; I believe that there does need to be Government intervention, so I certainly support the Welsh Government's aims via Banc Cambria. This is an absolutely crucial project. I know, in a Government statement just before the election, Minister, the Government Minister, then Ken Skates, said that he hoped to be in a position to make further announcements in regard to Banc Cambria before the end of 2021. So, I wonder if you could provide any information today in terms of when that announcement will be brought forward, but particularly how Members can lobby for locations to be in their own constituencies. I've been a long-time advocate that those banks should be in place in my own constituency in towns like Llanidloes, Machynlleth and Welshpool, so I'll continue to lobby for those areas. But, Minister, can you provide an update—because I understand you will be the Minister responsible once Banc Cambria has been developed—in terms of supporting Members to ensure that Banc Cambria's locations are in areas across Wales that are most appropriate, and particularly those, of course, in rural constituencies like mine?

Thank you, Russell George. It is always good and important to drive things forward when we get that cross-party support for a proposal. It has been clearly supported by the Welsh Government, taking on the pioneering work of Ken Skates, and I also would say Jack Sargeant as well, who raised many questions on this point. But, I have to say that it is across this Welsh Parliament that Banc Cambria is seen to be a goal that we should be aiming for. Because the serious point is that we've got bank closures in all our consistencies on the high street. It's a continuing decline, and we have to ensure people have access to banking services. I've mentioned the credit union movement, and we're putting more and more funding and support into the credit unions.

Just a quick update: you know that we have direct discussions, as I think I've reported, between the regulator and the private sector financial institution, because the banking sector is tightly regulated, it is a reserved matter, and the establishment of the community bank is contingent on private sector delivery. But we're completely committed to the support and the creation of the community bank for Wales. I think it's important that we can acknowledge and keep raising the questions, recognising that we're working with the private sector. They're developing their commercial proposals in line with the regulatory approval process, and we are delivering operational plans in parallel with these regulatory assessments. 

It is a concern in several parts of Wales and for many organisations that the banking sector appears to be turning their backs on community organisations. We know that HSBC is going to start charging a fee for community accounts. It is something that several people have contacted me about—Merched y Wawr, for example, and local eisteddfodau. I encourage everyone to sign a petition by the Member of the Senedd and the Member of Parliament for Dwyfor Meirionnydd calling on the banks to change their minds on this.

If the banks are going to turn their backs on the communities that provide them with their profits, let us invest more in alternative banking methods. Credit unions are one model. I too know that Banc Cambria is very eager to offer this kind of package to community organisations. Has the Welsh Government discussed with those behind Banc Cambria the possibility of providing this package that would be of so much assistance to organisations? I'm also awaiting a response from the Financial Conduct Authority to correspondence from me calling on them to look into this issue. Has the Welsh Government also discussed that with them or are you considering doing that on behalf of the community organisations of Wales?

I thank the Member. Rhun, thank you for raising that again, because this has been raised with me by many Senedd Members, that voluntary organisations are experiencing difficulties with regard to access to banking services. There are difficulties in terms of identifying an account that's free and suitable for the needs of a voluntary organisation, as well as even being able to open one in the first place. You've acknowledged the role of the credit unions, who can provide accounts and banking facilities to charitable organisations. I don't think everybody, perhaps, is aware of that. But also, many of you will know of the work of Purple Shoots, which is a pioneering microloans charity that's developed in Wales. They're now working very closely with credit unions to help them facilitate this.

We can't let the banks off the hook, as far as I'm concerned, on this, and we are meeting with them to, yet again, not just talk about the extent of the closures—we're all getting them daily, almost, aren't we—but the fact that this is excluding people and charitable organisations. We do, though, have an opportunity as well, with the third sector support that we've got from our county voluntary councils, along with the WCVA. They are establishing a community asset loan fund, and they are going to have funding that we are helping them with—a pot of £2 million in financial transaction capital. They can offer loans, for example, for organisations seeking to take on community assets. Also, they can get loans to help build up credit history for voluntary organisations. But I'm certainly going to be taking this back to the banking sector with my colleague Vaughan Gething as well. This is crucial. It's much reserved, but Banc Cambria is on its way. 

Further to Russell's and Rhun's points, community banking is about high-street presence, which we are increasingly seeing banks walk away from over the last few years, if not decades. It's also about that free access to banking for community groups and charities. We are seeing HSBC as the latest one to take the money and run, and it is not good enough. So, I ask the Minister to make the strongest representations. Because I have had the response from HSBC to my letter to them; they have explained to me the commercial reasons why it's imperative that they don't provide free banking for these charitable and community organisations anymore. That is not good enough, and they are not the only ones. So, would the Minister join with me in making those strong representations back to HSBC? They may listen or not. But, if not, direct constituents of mine and others, people who believe in ethical, free banking for charities and community groups—it could be the credit unions, like Bridgend Lifesavers or Maesteg credit union; there are other banks and building societies out there who will do it—if they take the money and run, let's vote with our feet and leave them high and dry as well.

I would say to Huw Irranca-Davies that I think we all join that expression of almost despair about the way that the commercial banks have left our communities. We will be making those representations. I think that we could all repeat examples of the same kind that you describe, and the fact that there is no commitment to the community. What about corporate social responsibility, which there's supposed to be in terms of the private sector and the banking world? 

I just wanted to assure colleagues and Members here today that Banc Cambria estimates that, subject to regulatory approval and investment, the community bank could be established in 2022—this won't be fast enough for us and for our communities, I know—with a customer launch in 2023. It's crucial that we get this right. But, we know that it will be about roll-out and the location of branches, and you'll all be wanting one, won't you, in your towns and communities. You have just got to stick with us and back us in progressing this in getting that ethical mutual banking arrangement with Banc Cambria.