SLOWLY LOSING OUR BANKS

Bank closures, remain, and are likely to remain at least for the foreseeable future a simple sad fact of life for many communities across much of rural and not so rural Wales. The closures appear relentless and unstoppable, despite the fact that high street banks could and should have a roll to play within the economic life of our communities. We have been here before and will no doubt be back. It should be obvious by now that the big 4 banks don’t care about public opinion or the consequences of the closures on local communities. 

A bank closure notice

There is a recognisable pattern to the process - local political and community leaders rightly kick off and are justifiably angry along with local residents who are often interviewed by local media. As part of this cycle we have the usual weasel words from the bank themselves, but, once the initial fuss settles the closure will roll on – as the large London based banks are pretty much answerable to no one save themselves – certainly not anyone here in Cymru / Wales.

Dropping the spin (about the growth in on-line banking and it’s use – if you have no choice what else are people going to do) this is about nothing more than cutting running costs, the banks have little (or no concern) for their relatively unprofitable personal customers or the concerns of their local business customers or our smaller communities. As has been noted elsewhere, by no less than the US Senate, some banks have other more pressing interests than those of their domestic customers like helping to launder money for drug dealers, dictators and terrorists, so much for being a local bank. 

More than 200 banks have shut in Wales since 2008, leaving towns such as Newcastle Emlyn,  Hay-on-Wye and Llandovery (since 9th June), too name but a few towns, without any banks. The loss of small town banks is not confined to rural areas - it has been paralleled by the loss of suburban banks which have also quietly disappeared from local shopping centres in our cities and smaller valley towns. 

Local banks remain useful for the high street and local communities, they help to promote vitality and vibrancy and make it easier for local businesses to operate. Local businesses to a degree benefit from the existence of local high street branches by picking up passing trade from bank customers. Once local bank branches close, the impact will be felt locally especially by older residents and local business owners who have to trek further and further to pay in their taking and the subsequent drop in passing trade. 

Even where banks survive there is a visible trend to replace person centred banking with machine centred banking. In my bank - even if there is no cue customers are regularly referred to machines to pay in cash or cheques or withdraw cash before you get a chance to talk to cashiers. This trend which is also being mirrored in some of the larger supermarkets is not about giving customers a choice or and easier service it's about reducing staffing costs to a minimum - something that will cut jobs and the wage bill. 

This situation has been further aggravated by the demise of many building societies, most by no means all of which were largely hoovered by the banks within a few years of them being floated. It is perhaps a pity that we don’t have some sort of risk free Post Office Savings bank – save for the fact that it was recklessly sold off by a previous Conservative government on the cheap. That said, it is of course important to remember that one result of the demise of the regional banks was the relentless rise of the big 4 banks which led to the growth of the reckless casino banking and cheap credit that brought about the financial crash.

Once you factor in the ruthless Post Office closure programme that was pushed through by the then Labour Government, and continued by the former Con - Lib Dem coalition government prior to it’s privatisation of the Post Office. Which in turn was preceded by the rapid floatation and rapid demise of most of our building societies you can clearly see how we got here - sorting the mess out is not going to be easy – perhaps as has been said before we need some sort of publically owned community owned Wales savings bank or Bank Cambria.

PUTTING THE PEOPLE FIRST

NEWS: @BenMLake proposes new law to stop customers being left high-and-dry by bank closures. https://t.co/Gu7O8cS2M1 pic.twitter.com/jw9jJd7SQL

— Plaid Cymru (@Plaid_Cymru) February 27, 2018

THE PROBLEM OF FANTASY ISLAND AND TAXATION

You can argue that one definition of taxation is that it’s the fair dues we all (well most of us) pay to participate in our society – to fund significant projects that benefit us all collectively and to provide a safety net for society. Tax is, has and probably always will be (and probably always has been) a subject that stirs people up. Things are not helped by the fact that we in the old West have been collectively been sold a pup when it comes to taxation.

Now, lets be honest, the first step towards noticing that you have been sold a pup, is to actually to notice. The problem is that, the Party formally known and New Labour, the Conservatives and the Lib Dems have been hooked on the idea that either by cutting, reducing taxation for the rich (and corporations) or even perhaps by turning a blind eye to tax evasion, avoidance, etc - that wealth will trickle down from the top to the rest of us. 

This somewhat questionable theory was pumped out by Ronald Reagan (and Mrs Thatcher) in the 1980’s is still pretty dominant; it is not a new theory. US Presidential candidate William Jennings Bryan (in 1896); who noted ‘that if you will only legislate to make the well-to-do prosperous, their prosperity will leak through to those below’. 

The ‘Trickle-down theory’ first appeared in the 1932 US Presidential campaign, when Democrats used it to hammer Republican Herbert Hoover’s plan to engineer economic recovery by making the rich richer into the ground.  Some fifty years later even Ronald Reagan’s supporters struggled to sell the idea to their own party, even George Bush (Senior) openly and publically mocked Reagan’s theories of supply-side economics as ‘voodoo economics’ at least until he got the Vice Presidential slot. 

On this side of the pond there were some monetarists who told Mrs Thatcher straight that the idea was nonsense and that it would not deliver results  - naturally she did not listen. Reagan’s first budget brought in a moderate reduction in the basic tax rate, this was followed by the a drastic reduction of the top tax rate from 70 to 50 percent and later still to 28 percent. 

If the theory was correct then, the public coffers should have swelled with enough extra revenue to balance the budget within one to two years. Unfortunately, the theory was incorrect, within the eight years of Reagan’s Presidency the total Federal deficit soared from around $900 million to some $3 trillion dollars.

What followed has been described as an orgy of speculation in stocks, shares and real estate (this was the era of ‘Greed is good’), ordinary Americans stopped saving and started spending. Through the 1980’s there was a near continuous decline in long-term capital investment – on which economic growth and jobs were dependent.  

To make matters worse the USA went into recession and the Federal Reserve had to raise interest rates to hold down the inflationary consequence of the tax cuts. By the winter of 1981/1982 the unemployment rate in the USA had risen to 10% for the first time since the aftermath of the great depression in the 1930’s.

The gulf between the wealthy elite and the rest of the population now became (and has remained) a chasm, the rich got richer and parallels have been drawn between the 1980’s and the Gilded Age of the 1870’s (income tax was abolished in the US and was only reintroduced during the First World War).  The 1980’s for the mega rich in the USA was an era of conspicuous consumption and extravagance – yet oddly enough very little of this prosperity tricked down to the American middle and working classes.

Interestingly enough average US family incomes did not return to the level they were at in the 1970’s until 1987. While the theory may have sounded good, the harsh economic reality was that Americans were now working harder and longer – in 1973 an average American worker had 26.2 hours of leisure time per week, by 1987 this was down to 16.6 hours per week.

One result was that jobs were also now less secure, Americans now worked on short-term of temporary contracts in increasingly un-unionised working environments. For blue-collar workers the 1980’s were a disaster, wages fell through the decade as employers threatened to move production overseas because the workers had priced themselves out of employment. During the same period in the UK well paid and well pensioned heavy industrial jobs were sacrificed and replaced (to a degree) with less well paid less secure poorly pensioned jobs.  

The right wing, in the US and here in the UK crowed about how government should not interfere with (or regulate very much) the ‘free market’.  This hands off attitude was also duly applied to the US savings and loan industry, laying the groundwork for the collapse that was to follow in 2007. The only exception being that if things went really pear shaped then it was expected that Government would collect the tab. One side effect of all this was fraud, 650 savings and loan companies collapsed, with the $1.4 trillion dollar tab being picked up by the US government.

On this side of the pond, building society after building society were floated on the stock market – and within a few years were readily absorbed by increasingly greedy banks.  In the US, exploitative working practices and sweatshops reappeared encouraged by the effective withdrawal of regulation and inspection. The 1980’s also saw the growth of increasingly powerful media empires and a concentration of power in fewer and fewer hands despite much reputed mantras from government about greater competition and choice for consumers.

We are all still living with the consequences of that period in the 1980’s when an ideologically driven obsession with the ‘free market’ and ‘privatisation’. Heaven help anyone who dare question these sacred truths – the very heavens may fall. The problem is that the market was rather than being ‘free’ it was pretty much increasingly unregulated as Governments in the USA and the UK largely looked the other way – tax collections fell and ironically tax evasion soared.

This state of affairs was tolerated by the long time dying Major Government and largely encouraged by the former New Labour governments of Tony Blair and Gordon Brown and barely mentioned by the former Con Dem government. Even the crash has not really changed things - while there was some talk about tacking tax evasion it was followed and matched by continuing (significant) staff cuts to HMRC.

It is interesting because tax evasion and tax avoidance, at least outside of the UK, is rarely out of the headlines with many heavily indebted governments being particularly keen to hunt down every tax dollar / euro / pound that is owed by tax evaders avoiding (unlike the rest of us) paying their fair dues to society. 

The Westminster elite privately at least regardless of whatever they say publically, appear to pay scant respect to the idea of fair taxation and fair representation. The British state (pre and post Brexit) now appears to be as close as possible to being governed by the sons of bankers and the sons of the City in the interests of the City (of London).

This reluctance to deal with the issue of tax evasion and the questionable money management activities of the city and elements of the elite and the prospects of Europe wide transparency and action against money laundering may have provided the motivation to develop a distracting and ultimately successful anti European campaign (via the well read tabloids) that ultimately led to the Brexit vote. 

The real problem remains that the current UK Government is, like pretty much all previous Westminster governments since the end of Empire, remains in up to its neck when it comes to tax evasion. The UK Westminster government is heavily involved in aiding and abetting tax evasion worldwide. British Overseas territories, including the Cayman Islands, help to hide around trillions from pounds from the different nation’s tax authorities.

Our biggest problem is that deep in the belly of the Westminster beast lies the two way relationship between Westminster and the City of London. This may go a long way towards explaining why the former New Labour governments, the former Con Dem coalition government and the current now weak and wobbly Conservative government (were and) remain reluctant to do anything about the problem of taxation.  

A few but not all of the city banks have been exposed as being are hand in glove with drug dealers, dictators, rogue states and terrorists when it comes to money laundering. The British Overseas territories lie at the heart of a web of money laundering and tax evasion, the inertia or reluctance to do anything about the problem may well be explained by the lure of comfy lucrative seats on the board for former Westminster politicians.

NOT GIVING A SCOOBY!

An all to familiar sight - a bank closure notice 

Bank closures, remain, and are likely to remain at least fir the foreseeable future a simple sad fact of life for many communities across much of rural and not so rural Wales. This has been highlighted by the announcement of the mass closure of 20 NatWest branches across all of Wales.

The closures appear relentless and unstoppable, despite the fact that high street banks could and should have a roll to play within the economic life of our communities. We have been here before and will no doubt be back. It should be obvious by now that the big 4 banks clearly don’t give a Scooby about public opinion or the consequences of the closures. 

The local political and community leaders have rightly kick off and justifiably angry local residents have been interviewed by local media. There will be the usual weasel words from the bank themselves, but, once the initial fuss settles the closure will roll on – as the large London based banks are pretty much answerable to no one save themselves – certainly not anyone here in Cymru / Wales.

Dropping the spin (about the growth in on-line banking and it’s use – if you have no choice what else are people going to do) this is about nothing more than cutting running costs, the banks have little (or no concern) for their relatively unprofitable personal customers or the concerns of their local business customers or our smaller communities.

As has been noted elsewhere, by no less than the US Senate, some banks have other more pressing interests than those of their domestic customers like helping to launder money for drug dealers, dictators and terrorists, so much for being a local bank.

Local banks remain useful for the high street and local communities, they help to promote vitality and vibrancy and make it easier for local businesses to operate. Local businesses to a degree benefit from the existence of local high street branches by picking up passing trade from bank customers.

Once local bank branches close, the impact will be felt locally especially by older residents and local business owners who have to trek further and further to pay in their taking and the subsequent drop in passing trade. This situation has been aggravated by the demise of many building societies., most by no means all of which were largely hoovered by the banks.

It is perhaps a pity that we don’t have some sort of risk free Post Office Savings bank – save for the fact that it was recklessly sold of by a previous Conservative government on the cheap. That said, it is of course important to remember that one result of the demise of the regional banks was the relentless rise of the big 4 banks which led to the growth of the reckless casino banking and cheap credit that brought about the financial crash.

Once you factor in the ruthless Post Office closure programme that was pushed through by the then Labour Government, the former Con - Dem coalition government prior to it’s privatisation of the Post Office. Which in turn was preceded by the rapid floatation and rapid demise of most of our building societies you can clearly see how we got here - sorting the mess out is not going to be easy – perhaps as has been said before we need some sort of publically owned community owned Wales savings bank.

INDIFFERENT TO PROTESTS..

Bank closures, are a simple sad fact of life for many communities across much of rural and not so rural Wales – this is despite the fact that high street banks could and should have a roll to play within the economic life of our communities. The local political and community leaders rightly kick off and justifiably angry local residents are  interviewed  by local media. There will be the usual weasel words from the bank themselves, but, once the initial fuss settles the closure will roll on – as the large London based banks are pretty much answerable to no one save themselves – certainly not anyone here in Cymru / Wales.

The numbers (since 2015):

• 57 banks have closed
• 24 belong to Barclays
• 17 belonged to Nat West
• 13 belong to Lloyds
• 3 belonged to HSBC

This summer Natwest closed branches in Porthmadog, Holywell, Prestatyn, Ruthin and Menai Bridge - branches in Pontypool, Ebbw Vale and Machchynleth will close in October 2017. Barclays will close another nine branches including Porth, Llandaff, Welshpool and Clydach.

Last November (11th) 2016 Lloyd’s quietly announced that branches in Abertillery (Blaenau Gwent), Crickhowel (Powys), Llandovery (Carmarthenshire), Canton (Cardiff), Pontarddulais (Swansea), Tregaron (Ceridigion) along with banks in Newport, Milford Haven and Mountain Ash were to be closed between March and April 2017. The reason, according to Lloyd’s is the changing way that customers do their banking.

Back in January 11th 2016 HSBC announced that branches in Ruabon, Chirk, Amlwch and Menai Bridge will close in April. Back in June 2015 Natwest announced its plans to close 11 branches in north Wales in September (St Asaph, Denbigh, Corwen and Llangollen in Denbighshire, as will the branches in Abersoch, Blaenau Ffestiniog and Tywyn in Gwynedd and those in Abergele and Rhos-on-Sea in Conwy, Buckley in Flintshire and Rossett in Wrexham).

The BBC (back in July 2016) noted that more than 600 bank branches have closed across the UK over the previous year, with rural areas worst affected and that parts of Wales, Scotland and south west England lost the most per population between April 2015 and April 2016. The figures obtained revealed that five of the top 10 areas losing banks are in Wales: Powys, Denbighshire, Gwynedd, Conwy, and Carmarthenshire. The data revealed by BBC Breakfast - came from the big six High Street banks: Lloyds, Royal Bank of Scotland (RBS), HSBC, Santander, Barclays and the Co-operative.

At the end of October 2014 Lloyd’s announced that it would close 150 branches (7% of its 2,250 branches) and shed some 9,000 jobs (the bank has incidentally already shed 43,000 jobs since the largely bank driven financial crash back in 2008). In October 2014, Vince Cable, the then Secretary of State for Business, Innovation and Skills stated that he was going to write to UK banks to demanding that the banks commit to keeping ‘the last branch in town’ open. Sadly was probably a little late as a growing number of communities in Wales, which already have no bank (28 as of December 2015), and the forty-seven which only have one bank, as noted by the Campaign for Community Banking Services.

The problem of closing banks affects all parts of Wales, while it is more readily identifiable in rural communities; also affects our urban communities as well – inconveniencing both personal and business customers. Bank closures proportionally hit older people harder as they may have problems with access to regular public transport. Age Cymru also noted that having a local bank that was convenient for older people was "vital" for ensuring they did not become socially isolated and that older people were at increased risk of financial abuse because of the branch closures.

More locally in Newport we had the stealth-like closure of local high street banks - Caerleon’s HSBC branch in Backhall Street (closed on 2nd November 2012) – despite a campaign to save the small town’s only bank from closure, which had gained the support of hundreds of people who signed a petition against the closure. HSBC had already closed the next nearest branch to Caerleon, on Caerleon Road, in St Julian’s (which was closed June 2011) – so much of listening to their customers.

 

While Lloyds in 2011/2012 was in the frame for a raft of closures, HSBC had already systematically closed branches across much of Wales - Presteigne, (which closed on Friday 9th March 2012) despite over 500 people signing a petition against the closure), and Blaenafon, in Torfaen (which closed on the 11th May 2012) despite over a 1,000 people signed a petition against the closure of what was literally the last bank in the town). The excuse was that both banks had seen a significant decline in the numbers of customers using their services and the branches were no longer commercially viable.

Campaigners against bank closures rightly claim that businesses in an area where a bank closes suffer and that residents (especially the elderly) who are reliant on public transport to bank in a nearby town are disadvantaged. Just for the record HSBC had closed six branches in Wales between September 2010 and December 2011, including Llandysul, Ceredigion, and Llanrhaeadr-ym-Mochnant in Powys.

The company has closed 17 "under-used" banks in Wales (since 2009) in both urban and rural areas. HSBC, Barclays and the rest have been quietly closing small rural banks in recent years, and NatWest and Barclays have also reduced bank-opening hours. The British Bankers' Association says more customers now go on-line and banks must examine branch-running costs.

Ditching the the spin (about the growth in on-line banking and it’s use – if you have no choice what else are people going to do) this is about nothing more than cutting running costs, the banks have little (or no concern) for their relatively unprofitable personal customers or the concerns of their local business customers or our smaller communities. As has been noted by the US Senate, some banks have other more pressing interests than those of their domestic customers like helping to launder money for drug dealers, dictators and terrorists, so much for being a local bank.

Local banks are good for the high street and local communities, they help to promote vitality and vibrancy and make it easier for local businesses to operate. Local businesses to a degree benefit from the existence of local high street branches by picking up passing trade from bank customers. Once local bank branches close, the impact will be felt locally especially by older residents and local business owners who have to trek further and further to pay in their taking and the subsequent drop in passing trade – this situation has been aggravated by the demise of many building societies.

It is perhaps a pity that we don’t have some sort of risk free Post Office Savings bank – save for the fact that it was recklessly sold of by a previous Conservative government on the cheap. That said, it is of course important to remember that one result of the demise of the regional banks was the rise of the big 4 banks which led to the growth of the reckless casino banking and cheap credit that brought about the financial crash.

When you factor in the ruthless Post Office closure programme that was pushed through by the then Labour Government, the former Con - Dem coalition government prior to it’s privatisation of the Post Office which in turn was preceded by the rapid floatation and rapid demise of most of our building societies you can clearly see how we got here - sorting the mess out is not going to be easy – perhaps we need some sort of publically owned community owned Wales savings bank.