Wales Bill

Debate between Hywel Williams and Roger Williams

Monday 31st March 2014 Commons Chamber

[Roger Williams (Brecon and Radnorshire) (LD)]

It is a great pleasure to speak in this debate. Many great political figures in the history of devolution will be very pleased that it is taking place. My predecessor Richard Livsey, Rhodri Morgan, Ron Davies, Lord Wigley and Lord Elis-Thomas will be delighted, although Richard Livsey is in a more elevated chamber than those in the Palace of Westminster.

Although the Conservatives did not embrace devolution to begin with, their contribution has been substantial. I thought that Lord Bourne, who was a regional Assembly Member, might have been based in Brecon and Radnorshire, but he actually lives in Aberystwyth and is now Lord Bourne of Aberystwyth. It is a tribute to this Government that this Bill has been introduced, and that is to be celebrated. I congratulate the Government on moving quickly with the Bill so as to ensure that part I of the Silk proposals can be acted on in this Parliament. That shows real commitment to devolution and I commend it.

My party, both in Wales and across the UK, believes that power and authority derive and flow upwards from the people and that power must be exercised at the most appropriate local level. We have long supported a federal system as part of our vision for the UK’s constitutional future. In order to ensure that our central principles of dispersing power as widely as possible and ensuring that Wales’s distinct challenges can be addressed, we have advocated and supported devolution strongly. We have argued consistently since the establishment of the National Assembly that it should possess additional financial and legal competences. The key to that has been the need to increase the Assembly’s accountability, and I believe that this Bill goes a very long way to doing that.

It is true that a lockstep, which other Members have mentioned, will put some constraint on the ability of whichever Government are in office in Cardiff Bay to use those powers. Although I would prefer not to have the lockstep, the acceptance of the principle of giving income tax powers to the Welsh Government is such an important step that it should not be dismissed.

In their reasoning on the inclusion of the lockstep, the UK Government have argued that the devolution of power to set different rates

“could distort the redistributive structure (or progressivity) of the income tax system and could potentially be detrimental to the UK as a whole.”

I do not want this Bill to be used as a means of establishing tax competition between Wales and the rest of the UK, but we must accept that tax competition is an inevitable consequence of devolution. If we are arguing that Wales should be able to borrow and raise what it wants to spend, it should have the power to tax as it sees fit.

Overall, although I cannot pretend that I would not prefer it if there were no lockstep, under the circumstances I am willing to accept it, if it means the increased accountability and responsibility for the Welsh Assembly that this Bill will deliver.

[Hywel Williams]

I agree entirely with the hon. Gentleman about the lockstep, but if taxes were reduced across all bands we would retain a certain amount of progressivity. The progressiveness of the system itself can vary depending on whether the rate goes up or down, so the lockstep is not a full answer to the question of progressivity in respect of income tax.

[Roger Williams]

I accept the hon. Gentleman’s argument, but that is the form in which the Bill appears, and rather than take the risk of losing the powers, my party is prepared to accept it.

On borrowing powers, I share some of the concerns outlined by my hon. Friend the Member for Ceredigion (Mr Williams), who will speak later, on the issue of writing a borrowing figure into the Bill. In the Welsh Liberal Democrat submission to the Silk commission, we argued for borrowing powers equivalent to those proposed for the Scottish Parliament—a capital borrowing limit of 10% of the total capital budget each year, with a cap at about 10 times the amount. We also asked for a very small amount of revenue borrowing, which would be a better, more sustainable approach to the borrowing arrangements.

In addition to the Bill’s financial measures, I welcome a number of constitutional moves, including those on double-jobbing, five-year terms and the lifting of the ban on dual candidacy. The move to five-year terms will help ensure that issues relating to the Assembly will receive the hearing they deserve during election campaigns. In the 1999 Assembly elections, I stood at both constituency and regional level but failed to get elected in either, so it is not a fail-safe system. Those Assembly elections took place at the same time as local government elections and Carmarthenshire had multi-member wards. There were polling booths with the words, “Remember you can vote for two candidates,” written above them. Obviously, that referred to the local government election, but it confused a lot of electors and resulted in an enormous number of spoilt ballots, because they were not aware of the complexity of the system. I think that having separate election days is very important.

When legislating on a ban on dual candidacy in 2006, the then Labour Government said that the process

“devalues the integrity of the electoral system in the eyes of the public and acts as a disincentive to vote in constituency elections.”

However, in reality it has reduced voter choice and undermined the credibility of the electoral system by punishing parties for being successful. I believe that the Opposition’s often used argument that turnout would diminish because voters would be unprepared to vote in elections in which some losing constituency candidates were likely to be elected as regional candidates is unfounded. Dual candidacy is accepted by the electorate in Scotland and, indeed, for the London Assembly.

We heard from Labour’s Welsh conference over the weekend that Labour would like to see Wales’s powers brought into line with those in Scotland and move towards the reserved powers model. I and my Liberal Democrat colleagues would wholeheartedly support that, but I remind the Opposition that they had 13 years to address those issues. In its 2011 manifesto, Labour made a commitment

“not to seek powers to vary income tax”.

That was a straightforward rejection, so I am very pleased to hear that Labour has changed its view and I look forward to the passage of this Bill through Parliament.

Water Bill

Debate between Hywel Williams and Roger Williams

Monday 25th November 2013 Commons Chamber

[Hywel Williams]

Indeed. I was aware of that. He is a friend of mine and I think highly of him.

My party’s stance has always been that it is up to the people of Wales to decide on the sustainable use of its natural resources. As scarcity bites, the economic case for Wales exporting water is growing. If so, Wales should be compensated fairly and the benefits should go to the people of Wales.

There is a point which has not yet been made— the territorial significance for Wales of the current water companies. Labour in government, through the Government of Wales Act 2006, failed to act on that. Much of mid-Wales is served by Severn Trent Water. Part of north-east Wales is served by Dee Valley Water. As a consequence, perhaps, part of Herefordshire is served by Dwr Cymru Welsh Water. One of the aims of my party is to regularise that situation. The lines should be redrawn. That is something that I will talk about in Committee if I am fortunate enough to be appointed to it.

As for the current arrangements in Wales, to paraphrase L P Hartley, Wales is another country: they do things differently there. That is a slightly over-used phrase, but in Wales we have a different situation. We have a water company, Dwr Cymru Welsh Water, which is a third sector company, as I mentioned earlier, with a non-distributable profits model. The previous company, Hyder —or Hi-dere, as the BBC used to insist on calling it —was run on conventional commercial lines. Glas Cymru reinvests its profits in a better system and in lower prices. As I said, its current price rises are below inflation.

[Roger Williams]

The hon. Gentleman will know that price rises since Glas Cymru was formed in 2001 and up to the present day are below the rate of inflation. It is the long-term situation.

[Hywel Williams]

The hon. Gentleman makes a good point. Provision of water in Wales is a difficult matter. The geography is against us, but Glas Cymru has done a fine job.

There have been concerns about large profits in the industry, overcharging and a lack of investment, alongside high gearing and a low tax take. I read a report to that effect in the Financial Times on 27 October. Hence the need for greater competition. A water industry insider put it to me thus: some water companies are over-geared, they are over-reliant on cheap finance, which is not going to be there for ever, and they are run as cash cows. This is not a sustainable model. Dwr Cymru has the lowest gearing in the industry and, as I said, all its profits are ploughed back. Unsurprisingly, this third sector company has reported customer satisfaction levels of well over 90%.

Another way in which things are different in Wales is the Welsh Government’s stance on competition, which essentially is against it. Under the Bill, businesses and non-householder customers will be able to switch their water and sewerage suppliers, but the Bill’s provisions on competition are confined to England. I refer the House to the report by the Welsh Assembly Environment and Sustainability Committee chaired by Lord Dafydd Elis-Thomas. When questioned, 113 large-scale users—using over 50 megalitres per annum—said that a price differential of 10% to 15% would be required to tempt them to switch. By the way, that was also the stance of small and medium-sized enterprises.

A price differential of 10% to 15% is substantial, and it is significant that none of the large users that have the ability to switch in Wales have done so. Customer service is important and that is a central element of the water service that we have in Wales. Either Dwr Cymru is doing a cracking job, or switching is unlikely to hold much appeal other than, perhaps in theory, to Ministers.

Competition could be extended to Wales if the Welsh Government so wished. Dee Valley Water’s evidence to the Welsh Assembly Committee noted that competition in the non-domestic sector might be cross-subsidised by the domestic sector—that is, the public would be paying. That point was made earlier, and the answer, I think, is transparency. I understand that the Government in Cardiff do not wish competition to be extended to Wales. Can the Minister, when he winds up the debate or later in writing, clarify whether under the 2006 Act the Government in London have a veto on Welsh decisions on water? Will that continue to be the case, or is the Cardiff Government’s right to choose not to introduce competition an absolute right? I would be grateful to hear from him on that matter.

Other Members have posed the question of how we can incentivise companies to alter the way they manage their systems and water and sewerage networks to improve efficiency and to encourage the development and deployment of innovative technologies that can cut costs and lower the sector’s electricity usage and its carbon footprint. The point has not yet been made that water companies are heavy users of electricity. I am not sure whether competition and the price instrument will achieve all these aims. I hope we will able to discuss this further in Committee.

Lastly, on affordability, the question is how the bottom 1% of the population pays for its utilities. Overall, the Bill is a missed opportunity. It has no specifics on sustainability or the decarbonisation of the water sector. The point about fracking has already been made. There is no legal obligation on people to pay their bills. In other countries, there is a voucher system for vulnerable groups. The Bill is also lacking in specifics on water management. The current UK system is luxurious in that there is no separation of clean and grey water, which could be achieved in the future. That is a formidable list and I hope we will have the opportunity to address these matters in Committee.

Under-Occupancy Penalty

Debate between Hywel Williams and Roger Williams

Tuesday 5th November 2013 Westminster Hall

[Hywel Williams (Arfon) (PC)]

It is a pleasure to serve under your chairmanship, Mrs Riordan. I congratulate the hon. Member for South Shields (Mrs Lewell-Buck) on securing the debate. We shall, of course, have a further opportunity to deal with the issue next week, and I look forward to that.

I am glad to see the hon. Member for Brecon and Radnorshire (Roger Williams) to my left. I hope that he will soon leap up to defend the Government’s policy. I am also glad to see my hon. Friend the Member for Banff and Buchan (Dr Whiteford), because Plaid Cymru, the Scottish National party and the Green party called a debate on the issue in March. I am glad that the Labour party is joining us in opposing a cruel and pernicious charge.

The aim of the under-occupancy penalty is, allegedly, to free up the logjam in available housing. That is a laudable long-term aim, and people should clearly move to make way for younger people with families.

[Roger Williams (Brecon and Radnorshire) (LD)]

I thank the hon. Gentleman for giving way. He mentioned my name; I supported the Government’s proposal because I wanted young families to be given the opportunity to have better housing. As to the discretionary housing payment, my authority has been allocated £512,000, as opposed to £60,000 last year. It will not spend it, and will have to send it back to Government unless something is done. Does the hon. Gentleman think that the DWP inquiry should include the use of discretionary payments by local authorities?

[Hywel Williams]

That is a good point, to which I intended to refer later. I recently tabled several questions to the Government about the use of discretionary payments, what planning had gone into them, and what amounts were to be available this year and next year. The answers were clearly wanting.

The aim of the charges—freeing up the logjam in the availability of three-bedroom houses for younger people—is laudable in the long term. However, one of my fundamental objections is that the Government are using tenants as a battering ram to free up that logjam. Tenants are carrying the burden of the charge and will have to find alternative accommodation, when there is none available. That is pernicious, and destructive of communities. That is one reason, indeed, for my opposition to the charge.

Off-gas Grid Households

Debate between Hywel Williams and Roger Williams

Tuesday 16th April 2013 Westminster Hall

[Hywel Williams (Arfon) (PC)]

I congratulate the hon. Member for Truro and Falmouth (Sarah Newton) on securing the debate and the all-party group on the off-gas grid on its report. I commend the solutions that the group recommends.

I will not restate many of the statistics that have already been presented this morning, but I will make just a few points. Four million UK households are off the mains gas grid and they use a range of other fuels to heat their homes, including heating oil; gas, as we have heard; mains electricity; and microgeneration. However, they also use solid fuel—coal and wood—and that is a particular issue in constituencies that were previously coal mining areas. Also, there are some rural non-coal-mining areas in my constituency; the point about non-mining areas has already been noted by the hon. Member for Brecon and Radnorshire (Roger Williams).

We know that the cost of using heating oil is substantially higher than the cost of using mains gas—about half as much again as the cost of using mains gas—and the cost of using LPG is about twice as great. However, in my area there is limited opportunity for consumers to switch their fuel source, an issue referred to by my hon. Friend the Member for Angus (Mr Weir). I have heard over a number of years that there are continuing suspicions of what are, in effect, local monopolies, with large companies presenting themselves locally with local names, for example. I do not know if that continues to be a problem, but it certainly has been in the past. There is, therefore, also a difficulty in substituting one supplier for another.

Reference has already been made to the difficulty of adopting some of the solutions that have been recommended by the Government, such as getting better insulation. In my constituency, houses typically are of rubble construction and a large proportion of them are pre-1919. The possibility of insulating those houses more effectively is limited, to say the very least.

Throughout the UK, 42% of rural households are not connected to the mains gas, compared with 8% of households in urban areas, but I think that the percentage of such houses in some parts of rural parts of Wales is much higher. From my experience of living on the Llyn peninsula, which is isolated from the mains in some areas, I know that the percentage is very much higher, which has a specific consequence for those communities, some of which are particularly deprived in the first place.

Rural households rely more heavily on oil and LPG to heat their homes, but there are difficulties in using oil and LPG. I have referred to the problems that I experienced during the particularly hard weather recently. I have a group of pensioners, all of whom depend on LPG and live in an extremely rural area. The lorries carrying the fuel could not get up there. I made inquiries about whether the gas supply was part of emergency planning, and clearly it was not in any real sense, although the local authority acted very promptly, and I might even use the word “heroically”, in getting gas supplies to those people around Christmas time. However, much more attention should be paid to that specific issue.

We have already discussed the fuel poverty that arises from the issue of off-grid gas. We know that fuel poverty leads to ill health. I also looked at the statistics. Cardiovascular diseases and respiratory diseases, such as asthma, are exacerbated in cold, damp and poorly ventilated homes. Again, that is a particular issue in former coal mining areas, where a number of people still suffer from the effects of their involvement in the coal industry. Also, in my area, similar effects arise from people’s involvement with the slate industry.

I will put before the House a case that I came across last Friday. The accepted definition of fuel poverty is

“a household which spends more than 10 per cent of its income on all fuel use and to heat its home to an adequate standard of warmth”,

which is the definition used by the Department of Energy and Climate Change. I came across a case last Friday. A gentleman came to see me who was on benefits; I think he gets about £72.40. By the way, he was very precise about the amount of money he gets—down to the penny, almost—because people on very low incomes have to be. Out of his £72.40, he was considering buying two bottles of LPG, which he thought would cost him around £40. Spending that £40 was going to destroy his finances for that particular week, but he was confident that he could manage, because he had been managing in this way for years. I went through his finances with him very briefly and I asked him in passing, “I don’t think you have allowed there for the cost of a TV or a TV licence,” and he said, “Oh, the TV’s gone years ago,” and that was the way he was coping. I must admit that I scarcely watch TV, but this issue is about being able to take part in society in the way that everyone else does.

[Roger Williams]

Will the hon. Gentleman give way?

[Hywel Williams]

I hope that the hon. Gentleman will forgive me for not giving way, as time is rather short.

You would not want me to wander off the point, Mr Crausby, but may I note that I saw that particular gentleman because he is also going to be paying the bedroom tax at £18.40? I have no idea how he will do that on £72.40, with bedroom tax at £18.40 and buying LPG at £40 a shot. He has no savings, no job and very little possibility of moving.

I will press on to say, very briefly, that households that use oil or LPG as their main source of heating are more likely to use secondary heating than are other homes. In Wales, 85% of heating oil consumers use fuels for secondary heating and most frequently use solid fuel—that is, they use oil, but they also use coal, or some use wood. Only 23% of consumers in Wales with mains gas heating use other fuels for secondary heating, so mains gas is not an answer.

Lastly, I refer to the Bill introduced by my hon. Friend the Member for Angus and commend it yet again. It would allow pensioners to be given the winter fuel payment earlier in the year. I would like to see that extended to solid fuel. My hon. Friend’s Bill was deliberately restricted in scope to increase its chances of being passed, which I hope it is. Again, I press the Minister and the Government to give it proper consideration.

On 16 January, I asked the Secretary of State for Energy and Climate Change whether the Government could make winter fuel payments earlier, so that people would get more value, or more “bang for the buck” as it were. Interestingly, the Secretary of State said:

“My Department has been encouraging people in many parts of the country who are off grid to buy early, because they can get much better deals than if they leave it until later.”

That is precisely the point that I was making. He then said:

“Although the extra payments are welcome to those who get them, they are not received by everybody. They do not address the fundamental problem of homes and appliances that waste energy and money.”—[Official Report, 16 January 2013; Vol. 556, c. 950.]

Well, “hear, hear” I say—that is a very fine point—but I would not want the Secretary of State or the Minister to use their not being able to do something fundamental as an excuse to do nothing at all.

Commission on Devolution in Wales

Debate between Hywel Williams and Roger Williams

Thursday 3rd November 2011 Commons Chamber

[Hywel Williams]

I am grateful to the Secretary of State for making that point, because her comments and those of other hon. Members could easily be misinterpreted if looked at briefly.

It seems clear that the current arrangements are not sustainable in the long term. The settlement between London and Cardiff is complicated, but that need not be a bad thing—sometimes complicated is good if the system works very well. The system does seem complicated but it is, thankfully, now much clearer than it was under the highly unsatisfactory legislative competence order system that we struggled with under the previous Government. The Under-Secretary was on the Welsh Affairs Committee with me and I am sure that he was tempted to jump to his feet when the housing LCO was mentioned. However, I shall not intrude into that particular piece of history.

[Roger Williams]

Does the hon. Gentleman agree that the system is not only complicated but is spread over a great body of law, making it very difficult to use that law for its proper purpose? Does he agree that the Silk commission could look at that as well?

[Hywel Williams]

There have been persistent complaints from members of the legal profession in Wales and others, including academic lawyers, who have looked at the changes to the body of law in Wales and found that it is difficult to keep track. There are people who are doing a heroic job of trying to keep track of the implications and I only wish that they were better resourced. Unsurprisingly, my opinion is that there should be a devolution of jurisdiction to Wales, which would make things rather clearer, but I shall say something about that later.

Financial Services (Rural Communities)

Debate between Hywel Williams and Roger Williams

Tuesday 29th March 2011 Westminster Hall

[Hywel Williams (Arfon) (PC)]

I congratulate the hon. Gentleman on securing this debate. Lest we concentrate too much on Barclays, I am sure that it is right to say that other banks have taken similar steps to those that Barclays has taken. Does he share my concern about the potential closures arising from the announcement by Lloyds TSB bank that it will be divesting itself of perhaps 600 branches in the very near future and does he believe that such closures might have as bad an effect on local services in rural Wales and elsewhere as the closures of Barclays branches?

[Roger Williams]

I thank my hon. Friend for that point. When a company such as Lloyds TSB indicates that it will make branch closures, we can readily anticipate where those closures will be made. Indeed, I have some statistics about other companies and I do not wish to concentrate on Barclays. It is just that Barclays is in the forefront of my mind at the moment. It is not only Barclays that has been closing branches. In 2010, HSBC closed 52, Barclays 40, NatWest 18 and Lloyds TSB 11. As my hon. Friend pointed out, more closures are in the pipeline.

Online banking is, to an extent, a generational problem. To draw a parallel, in a debate on fuel poverty in this Chamber, it was pointed out that many people now have the opportunity to take advantage of competition in the fuel sector. A number of hon. Members were in the debate, but only two of us had never switched suppliers—me and my right hon. Friend the Member for Twickenham (Vince Cable). We were, I think, of a different generation. Many people who bank at small rural branches are not willing or readily able to switch to online banking. I know that my hon. Friend the Member for Ceredigion (Mr Williams) will be making a point about access to broadband and the internet, and such points were made very well in the rural broadband debate that the hon. Member for Penrith and The Border (Rory Stewart) secured in Westminster Hall last week. Many of these people do not have access to fast, safe internet, so even if the will is there it might not be possible for them to bank online. I commend the Government for the excellent steps that they have already taken on rural broadband, but more must be done so that rural businesses, people and communities are not left behind.

I shall finish, as far as Barclays is concerned, by saying that during the process I have been speaking about it was announced that Barclays had made a profit of £6.1 billion, and that its chief executive, Bob Diamond, was receiving a £6.5 million bonus. Bob Diamond’s fan club in Rhayader is not full, and if anyone wants to make an application to join I am sure that there is plenty of capacity. Having said that, Barclays did not take any public money during the banking crisis, for which it should be applauded. It certainly benefited, however, from the liquidity measures and the quantitative easing that the Government implemented to help the banks through the credit crunch, so it should show more thought for its customers, whose taxes assisted in keeping it afloat during that difficult time. I should, of course, point out that it is not only Barclays that has been making closures, as my hon. Friend the Member for Arfon (Hywel Williams) has pointed out.

I understand the commercial pressures that the banks are under, but they must understand the effects that closures have on tourism, economic development and customers in rural areas. What is the solution? The Campaign for Community Banking Services suggests that we set up a community bank—one centrally run facility in the community with face-to-face services operating on behalf of all banks and building societies. There would be only one set of overheads, and the massively reduced costs would be covered by all the participating banks. I understand that it would use the same technology as that which links ATMs, so the set-up costs would be not too large. A similar system in the United States has proved very successful. It seems an ideal solution, with our constituents continuing to receive the service that they so desperately need. Will the Minister outline any discussions that he has had on a similar community banking facility for the UK?

I want to say a few words about mutuals and credit unions. I am a member of the Brecon credit union, am well aware of the part that such organisations can play, and have recently met with representatives of the building societies that have remained in the mutual sector. They do a very good job of providing services in local areas, and are able to lend not just on an arithmetic income multiple but on their better understanding of the local economy and of the quality of employment in which many people who wish to get a mortgage are involved. The smaller mutual building societies complain that the reporting and regulatory requirements are more fitted to larger financial organisations. They would like the Government’s approach to be more risk related, and some of the very onerous regulations to be moderated in some way.

It is not just the closure of bank branches that is of concern. I am very pleased that the Government have announced that they intend to maintain, as far as possible, the post offices, which are the financial and social hub of rural areas but which have too frequently been closed. The Communication Workers Union says that 1,000 post offices—one in 10—closed in 2010, and about 2,500, many in rural areas, have been closed in recent years.

Although I am aware that mail volumes are falling, and that other services that branches offer, such as benefit payments, are moving online, I ask that the Minister, in conjunction with his colleagues in the Department for Business, Innovation and Skills, seriously take on board the value and worth of rural post offices. According to Age Concern, 44% of pensioners use post offices to collect their pensions, 43% use them for access to cash and 56% use them to pay their bills. At both a local level and a Government level, we must do what we can to prevent widespread closures and long-term temporary closures. There has been an announcement that the long hoped for post bank will not be proceeded with, but does the Minister have any thoughts on whether a similar facility could be set up to address many of the issues that we are debating today?

The next issue that I want to talk about could be a huge problem for all our constituents. The cheque has been an integral part of our lives for more than 350 years, but there are plans to phase it out by November 2018. We currently write more than 4 million cheques per day, and despite the decline in usage we will still be writing 650 million a year in 2018. Cheques are essential and irreplaceable in many situations, and they are particularly important in rural areas. There is currently no easier, safer or more efficient way to pass money from one person or organisation to another.

Cheques are easy to use, virtually fraud proof, can be posted or handed over anywhere, and are cheap, safe, popular and understood by all. The use of credit and payment cards has, of course, hugely altered payment methods by virtually replacing cash in most everyday transactions, but only larger businesses can afford the technology to install card machines and we are light years away from the day when every individual will be able to receive payments by card.

There is only one reason to get rid of cheque books— profit. Cheque books are more expensive for banks than credit or debit cards. Handling paper is not efficient according to the bean counters, and as all British taxpayers know to their cost, banks are driven by many things other than providing a convenient service for their customers. The abolition of the cheque will lead to an increase in the black economy, as people will start paying cash when a cheque would have previously been used. It could also lead to an increase in crime, as older and more vulnerable people who are unable or unwilling to use other methods start storing significant amounts of cash at home. We do not currently have a viable alternative to the cheque, and until we find one not even the thought of it being abolished should be entertained. Will the Minister ensure that no decisions are made on the abolition of cheques before a viable alternative is found?

In conclusion, these are difficult times for rural constituents, with rising oil prices and the necessary cuts to public services. People need good and proper access to financial services so that they can grow their small business, obtain a mortgage for their first home, or cash and pay in their cheques so the local economy can grow and flourish. Thank you, Mr Caton. I open the floor to my colleagues.

[Hywel Williams (Arfon) (PC)]

I congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on securing this important debate. I am sad that so few of us are in the Chamber, as the issue is vital to communities in general, and specifically to rural communities such as those in my constituency and, even more so, in my previous constituency of Caernarfon, which has a large rural hinterland, now part of Dwyfor Meirionnydd. I also congratulate him on his early-day motions, which I have signed. I checked; I have signed at least one of them. He has a track record on the issue.

A great deal of attention has been given recently to the bonus culture and high salaries in banks, but the changes in banking that have the most intimate and direct impact on our constituents happen on the high street: particularly, for the purposes of this debate, in the towns and rural villages of Wales. That impact has had less attention, as has the effect on jobs in the banking sector. A job in the banking sector is always seen as a safe and effective career. Several of my contemporaries at school went into banking. I come across them occasionally, and they are now on extended gardening or golfing leave. That is the effect when banks close, as many have done in the past few years.

We have been given briefing material for this debate. I will refer particularly to the Countryside Alliance’s briefing, which I found useful. According to my briefings, 7,000 branches have closed in the past 20 years, leaving about 10,000. That is a 40% change—ish; my arithmetic is not very good this morning—in provision, which is substantial. Rural banks face a threat. It is not only Barclays, which the hon. Member for Brecon and Radnorshire mentioned, but HSBC and the other members of the big four. In my constituency, the Campaign for Community Banking Services has identified Llanberis as an area of potential difficulty, with only one remaining bank serving a large tourist area visited by many thousands of people during the summer. A couple of other communities in my constituency are in the same situation. Elsewhere, in Bangor, Betws-y-Coed, Wrexham and throughout rural north Wales, the provision of banking services is fragile and under threat.

Unfortunately, the banks have been less than candid over the years about what they are doing. The Select Committee on Welsh Affairs, of which I used to be a member, took evidence from banks some years ago about closures in rural communities. Interestingly, one bank provided us with a map showing that there was a bank within five miles of a community where another bank was closing. Unfortunately, a large mountain was in the way. One would have had to travel all the way down the valley and back up it to get to the bank that was allegedly five miles away, and the return journey would have taken most of the day on public transport. Banks have been less than candid.

I referred in an intervention to the potential danger that some Lloyds branches might close. I understand that Lloyds is in a difficult position—it must divest itself of parts of its operation due to European Community state aid rules—but about 600 branches are threatened, and I fear that they might be sold off. I understand from the press that the new chief officer of Lloyds, Mr Antonio Horta-Osorio, has announced that the plans to sell off the banks are to be accelerated, so the change will happen quickly. That is not only a threat to the Lloyds network; Lloyds also controls Cheltenham and Gloucester and TSB. People do not realise that it has several brand names. I am not sure whether the Government can do anything about that, but I will be interested to hear whatever the Minister has to say.

Local bank branches are vital to commercial activity. The hon. Gentleman mentioned shops in his constituency; the same is true in rural parts of my constituency. Equally importantly, local banks are also a good way to address financial exclusion, which I know concerns this Government greatly, as it did the previous Government. A bank in a community allows for a measure of inclusion; the converse is also true.

Assisting older people, people with a disability and vulnerable people with their banking needs is also an issue. Not everybody can do their banking over the phone or broadband. The Government have at last announced an initiative to bring superfast broadband to parts of Wales, including my hometown of Pwllheli, but that will not extend to all communities. I must mention Rhiwlas, as I always do when I refer to this issue. It is within sight of the university city of Bangor but has appalling broadband service, and there seems little prospect of its being improved. That is not a way out for many people and, as the hon. Gentleman mentioned, we might see the end of cheques, which would also be a tragedy.

On the current trend towards automated banking, my branch, HSBC in Caernarfon, is an excellent branch in the middle of town, but it has recently been largely automated. There are banks of machines for printing statements, depositing money and withdrawing money and a telephone that one can use to talk to somebody far away. The counter space has been reduced to two positions. I was there the other day. A member of staff was hovering around the machines to seduce customers into using them, but there was an enormous queue for the two positions, one of which was closed. People are voting with their feet. They would rather queue for 10 or 15 minutes than use the machines. That says that people appreciate the face-to-face nature of banking transactions. Banks divest themselves of that way of promoting their business at their cost.

HSBC has also introduced its own radio station. I do not know whether hon. Members have heard it. When one queues for a position, one must listen to pop music, news and advertisements for the bank’s own products. I almost think that HSBC is doing it deliberately to drive customers away; it certainly drove me to use the automated facilities. As I said, banks will have to learn—as have Departments, such as Her Majesty’s Revenue and Customs and the Department for Work and Pensions—that people like to discuss their business face to face. I would also say that face-to-face business is of itself good business.

My party’s policy for many years has been to set up local community-based banks. In fact, it was one of the central planks of our 2007 manifesto. If local community-based banks cannot be set up wholesale, we would like pilot schemes. I know that this Government and the previous Government thought carefully about setting up post banks, but if a scheme cannot be introduced wholesale, can pilot schemes be tried, just to see what would happen? Post offices offer themselves as ideal locations for providing access to personal and small business banking. I will not pursue the question of post office closures, Mr Caton—I am sure that you would stop me in my tracks if I did—but I note that there were 200 closures in Wales during the last wave of closures, 11 in my constituency. However much local people complained—I organised a series of public meetings in my constituency that were very well attended—the net effect was that 11 closures were proposed, and 11 closures went ahead. I was not sure from the hon. Gentleman’s remarks whether it is still Liberal Democrat policy to have post banks or community banks. It would be sad if that has changed.

Finally, in Cardiff we have a One Wales Government made up of Plaid Cymru and the Labour party, and we have invested recently in credit unions, which are an excellent way of providing small amounts of money—small loans—for people, and of saving small sums of money. The One Wales Government have invested a further £3.4 million in credit unions.

[Roger Williams]

One of the points on which I could have expanded is that there does not seem to be a root from which a credit union can progress to become a larger, more responsive financial service, such as the mutual building societies, which, of course, originated in small communities such as ours.

[Hywel Williams]

Indeed. There is a gap in the market. Credit unions are very good for people who need small amounts of money and need to save, but it is not so easy for businesses to access small amounts of investment. There have been huge complaints about the way in which the large banks have been acting in that regard recently. I am loth to mention cases, but a holiday business in my constituency closed down because trade was terrible and the bank withdrew its banking facilities. Without going into details, all I need to say is that it was winter—trade is always terrible in winter—and the bank would not wait until summer. I would say, therefore, that there certainly is a gap in the market. Our proposal as a party is for a postal bank—a people’s bank, as it were.

I will end by saying that I would like the Welsh Assembly Government to have the legal power to intervene in the market in that way if this place does not do so itself. I think that everybody understands that there has to be change. Banks are commercial organisations, but there has to be much greater social responsibility in their business.