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Politics

Development Bank ‘not a guaranteed solution’

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A NEW report by a think tank has assessed the potential of a public development bank for Wales to boost lending to firms and promote economic development locally.

The report by the Public Policy Institute for Wales describes evidence that ‘bank branch closures are having a negative impact on individuals and businesses in Wales, but more specific research is need to ascertain what impact bank branch closures is having on individuals and communities. Finding out the extent to which vulnerable areas are affected by bank branch closures can also help identify which specific services can be provided in the future.’

The report states: “However, even the most extensive public banking model, opening community banks would not be able to replace the branches that have been closed in Wales in recent years.”
On ways to protect banking services it comments: “A public development bank is potentially useful option, but not a guaranteed solution.”

Plaid Cymru Mid and West AM Simon Thomas said: “We need action from Governments in Westminster and Wales on bank branch closures.

“It is unacceptable that the bank network is being stripped from rural Wales. We cannot have a gap in the banking services available to rural and urban Wales.

“Plaid Cymru’s Westminster leader Liz Saville Roberts has called for a change in the law to protect the last bank in town. We are now seeing often in our communities from Llandysul to Llanidloes towns left without a bank.

“While bank branches are expensive to maintain and are used by fewer people in the past they are still an important resource. The report highlights research by the Federation of Small Businesses that bank branch closures affect small businesses in rural communities, as they are more likely to require cash purchases than in urban areas.

“High street banks have a duty to consult effectively with the local community over closures. While banks are private companies making commercial decisions, in effect access to banking is essential for modern life and participating in democracy.”

“The Labour Government in Cardiff Bay should be looking at how other financial institutions like Finance Wales and credit unions have a role to play. Other ways to protect banking services for small businesses and individual customers like developing the services provided by the Post Office will be hampered by the closure programme of successive Westminster governments of different political colours.”

The report identifies problems with lending to small and medium sized businesses, automation has made banks more geographically and operationally distant from small businesses.

Bank closures contribute to this problem according to the Federation of Small Businesses.

Mike Cherry, FSB National Chairman, said: “The rapid pace of bank branch closures across the UK presents some very real and tough challenges for small businesses. FSB members highly value the face-to-face interaction they receive in-branch, particularly when making complex financial transactions, with staff who often have a greater understanding of their business and the local economy. In addition, many of our members deal heavily in cash and cheques and need access to over-the-counter banking facilities on a regular basis.

“Small businesses are keen to embrace the opportunities of the digital economy. However, barriers towards digital inclusion, such as unreliable broadband connectivity, and a lack of confidence in using digital services creates serious challenges. These are some of the reasons which explain why the protection of in-branch banking is so important for financial inclusion.”

Large banks were three times more likely to shut a branch in Wales than in London and the south east of England, and five of the top ten areas affected by the 600 branch closures in Britain in 2015-2016 were in Wales – Powys, Denbighshire, Gwynedd, Conwy, and Carmarthenshire.

The FUW is particularly concerned as internet banking is not always an option in rural areas; many people will not have an appropriate internet connection- if they have a connection at all, and especially the elderly may not be familiar with IT and the process of doing their banking online.

Speaking earlier this summer, FUW President Glyn Roberts said: “The closure of rural banks has a detrimental effect on rural areas, as they serve not only villages and small towns but many of the neighbourhoods in surrounding areas, as well as providing employment to local people.

“Closures are a great loss to residents and local businesses, particularly the elderly or residents who are unable to travel to the nearest town. The closures will of course also affect small businesses, as they will have to travel further afield for their banking needs.
“In addition, internet banking is not always an option in rural areas; many people will not have an appropriate internet connection if they have a connection at all, and especially the elderly may not be familiar with IT and the process of doing their banking online.
“For many telephone banking is impractical, as they prefer to deal with their personal finances on a one-to-one basis and mobile banking is limited in many rural areas. It is worth considering as well that some people may not be able to get to mobile banks during the short time they are present in villages.
“With more and more rural services and businesses being closed down, we must also acknowledge that it is becoming less and less attractive for young families and indeed business owners to remain in the countryside.
“If the problem of rural depopulation is not addressed with some urgency it could have severe consequences for our rural communities and with that also our rural economy.
“It is clear that if we want to ensure that Wales develops its full potential in being a rural economic powerhouse, we must make it attractive for working families to stay and also encourage vital services like business banking to remain available in our countryside.
“The provision of acceptable broadband services is an increasingly critical part of meeting the needs of rural Wales.”

A report from the British Infrastructure Group found nearly a quarter of Welsh constituencies appear in the worst 20 constituencies in the whole of the UK for broadband speed.

Business

Bristol Airport takes legal action over Welsh Government’s £205m Cardiff Airport subsidy

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Cross-border row intensifies as Bristol claims unfair advantage

BRISTOL Airport has filed a legal challenge against the Welsh Government over what it calls “unprecedented” public funding for Cardiff Airport, escalating a long-standing dispute over state support and regional air travel.

The legal action, submitted to the UK’s Competition Appeal Tribunal, relates to a £205.2 million subsidy package announced earlier this year to support Cardiff Airport over the next decade. This sum is in addition to nearly £200 million already invested by the Welsh Government since it bought the airport for £52 million in 2013.

Bristol Airport argues that the funding gives Cardiff Airport an unfair competitive advantage, distorting the regional aviation market and potentially shifting passengers and airline services across the Severn without generating net economic growth. It also claims the Welsh Government failed to properly consult or consider alternative views before confirming the funding arrangement.

A spokesperson for Bristol Airport said: “We fully support competition between airports, but it must be fair. This extraordinary level of subsidy risks undermining that.”

Welsh Government defends investment

Rebecca Evans MS, Cabinet Secretary for Economy, confirmed that legal notice had been received and defended the subsidy, describing Cardiff Airport as “a strategic asset” for Wales.

She said: “Cardiff Airport is of vital importance to the South Wales economy, supporting thousands of jobs directly and indirectly. This investment will help the airport grow sustainably and contribute to wider regional prosperity.”

The Welsh Government has repeatedly emphasised its long-term commitment to seeing Cardiff Airport thrive under public ownership, citing the impact of the COVID-19 pandemic on the aviation sector and the importance of maintaining a national airport.

Political fallout

The Welsh Conservatives have criticised the latest subsidy, calling it poor value for taxpayers and demanding the airport be returned to private hands. In the Senedd, opposition members have questioned why so much public money is being spent on an airport that has struggled to break even.

Cardiff Airport, meanwhile, continues to operate as normal. The management has welcomed the support and said the funding will help maintain services, attract new routes, and improve passenger facilities.

Background

Cardiff Airport has long trailed behind Bristol in terms of passenger numbers, with the English airport handling around 9 million travellers a year compared to Cardiff’s 1.5 million. Bristol has expanded rapidly in recent years, attracting major low-cost carriers, while Cardiff has faced repeated challenges retaining key routes and airlines.

The outcome of the legal challenge could have wide-ranging implications for how devolved governments can support transport infrastructure without breaching UK competition rules. The case is expected to be heard later this year.

Legal experts sceptical about Bristol’s chances

Despite the strong language in Bristol’s complaint, legal observers believe the case is likely to fail. Cardiff Airport is a publicly owned asset, and governments have broad powers to invest in infrastructure they own—especially when it serves a recognised public purpose, such as economic development or regional connectivity.

Under the UK’s post-Brexit Subsidy Control Act 2022, devolved administrations have greater flexibility to provide targeted support, so long as it meets criteria such as necessity and proportionality. Moreover, with Cardiff Airport handling a fraction of Bristol’s passenger volume, it may be difficult to prove that the subsidy causes real distortion in the market.

Unless Bristol can demonstrate direct commercial harm and show that the Welsh Government broke procedural rules, the case is likely to be dismissed.

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Health

‘The future for general practice is grim’: GPs sound alarm about funding crisis

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GENERAL practitioners called for an overhaul of an “outdated, unfair” funding model, warning of an “enormous and growing” inequity putting patient safety at risk.

Doctors gave evidence as the Senedd’s health committee began an inquiry into the future of GPs amid concerns about more than 100 surgeries across Wales shutting since 2012.

James Pink, a GP partner in Llanishen, Cardiff, expressed concerns about the Carr-Hill formula, used to allocate funding to practices, which was designed in the late 1990s.

He said: “There’s almost no correlation between funding and deprivation which beggars belief. And the correlation between age, sex and funding isn’t as clear cut as you’d think.”

Dr Pink told the committee variation across Wales means an average practice could be £862,000 worse off than another similarly looking after 10,000 patients.

Noel McLoughlin, a partner at St Isan Road Surgery in Heath, said his colleague found Cardiff and Vale GPs were the worst-funded in the whole of Wales and England.

Dr McLoughlin wrote to the committee: “This means that the Carr-Hill formula regards Cardiff as the wealthiest and healthiest area with the lowest needs.

“This is clearly nonsense. The inequity in funding in Wales alone is enormous – worse still, it is growing. This must stop or the future for general practice and primary care in Cardiff is grim. No-one will want to work here.”

The GP warned: “All patients in all areas are having difficulty accessing primary care. We are struggling to maintain safe levels of working with the current demand and it is going to rise.”

Kate Baker, another Cardiff GP, wrote: “It has been distressing to see the deterioration in funding and support for general practice over the 17 years I have worked as a GP.

“The partners in our practice have not seen a pay rise for nine years and, in fact, the imposed contract for 2023/24 led to a pay cut.”

Giving evidence on July 10, Richard Stratton, a GP partner in Powys, agreed about the necessity of updating the “unfair” formula but cautioned that it will remain a blunt tool.

Dr Stratton told the health committee: “What we also need to factor in is the supplementary services that general practices participate in on top of the core contract.”

He said: “The combination of a revised formula plus better use of local services… would take us forward enormously. At the moment, both feel hamstrung by budgetary constraints.”

Asked about the system of annual negotiations on the General Medical Services (GMS) contract, Dr Stratton said single-year budgets have a debilitating impact on investment. “Without that ability to plan, everything is crisis management,” he warned.

John Williams, a practice manager in north Wrexham, described the contract process as piecemeal and rushed, criticising “tokenistic” smaller investments for posters and suchlike.

Mr Williams pointed to a “double whammy” on employer national insurance contributions, with no public exemption and no £10,500 employment allowance like private businesses.

He said his 13,000-patient practice also faces a £70,000 or 20% overnight increase in its wage bill due to changes to the national living wage.

In its written evidence, the Royal College of General Practitioners said GPs worked across 516 practices in Wales in 2002 but only 374 remain today.

Angharad Fletcher, a GP in Flintshire, warned health board-managed practices are much more expensive to run compared with GMS surgeries yet deliver a “vastly inferior service”.

“GMS is underfunded,” she wrote. “Costs have risen significantly over the past five years and income has not matched that which means in some cases surgeries are having to cut staff when the demand is greater than ever.”

Dr Fletcher added: “There is no longer a workforce crisis. There are many qualified GPs looking for work. Practices cannot afford to employ them.”

One GP, who wished to be anonymous, expressed grave concerns, warning: “We are struggling to provide an acceptable service to our patients. The funding for our practice has been eroded over the last 12 years, such that I have fears there will be harm to patients.”

Another concluded: “If politicians are to be the driver of change then we need politicians on board who have vision and energy to drive this forward.

“I have dealt with two politicians from different parties over the past nine months and each left me with the feeling that no-one really understands the issues or even cares.”

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Climate

Three new publicly owned wind farms announced for Wales

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CPRW raises concerns over onshore impact as Welsh Government unveils green energy plan

A MAJOR step towards energy independence has been announced with the launch of three new wind farms under Trydan Gwyrdd Cymru, the publicly owned renewable energy developer for Wales.

The three proposed sites—Clocaenog Dau in Denbighshire/Conwy, Glyn Cothi in Carmarthenshire, and Carreg Wen in Rhondda Cynon Taf—are set to deliver up to 400 megawatts of clean electricity, enough to power 350,000 homes, equivalent to around a quarter of all households in Wales.

A national push for net-zero

The projects form part of the Welsh Government’s wider ambition to develop 1 GW of renewable energy capacity on public land by 2040, with a target of meeting 70% of Wales’ electricity demand from renewables by 2030, rising to 100% by 2035.

The Cabinet Secretary for Energy and Economy, Rebecca Evans MS, said: “These proposals demonstrate our commitment to harnessing Wales’ abundant natural resources to generate clean energy while ensuring the benefits are felt locally.”

She added that developing the projects on the Welsh Government Woodland Estate, which covers 6% of Wales, ensures public land is being used to combat the climate emergency and generate long-term economic benefits.

Concerns from countryside charity

However, not everyone has welcomed the announcement without reservation. The Campaign for the Protection of Rural Wales (CPRW) issued a statement on Thursday (Jul 10) expressing concern over the potential landscape and biodiversity impacts of large-scale onshore wind projects.

Dr Jonathan Dean, Trustee of CPRW, said: “We fully support the transition to renewable energy and the goal of retaining profits for the benefit of Welsh communities. However, we remain disappointed that Trydan Gwyrdd Cymru have not chosen to pursue a more effective and publicly acceptable approach offshore.”

Jonty Colchester, CPRW Chairman, added: “Publicly owned renewable energy projects must set the gold standard for sustainable development. This means not only clean energy generation but also protection of Wales’ treasured natural and cultural landscapes.”

The charity is calling for site-specific impact assessments, greater community involvement, and a transparent development process to ensure that renewable energy goals do not undermine the very environment they are meant to protect.

Jobs and investment for Wales

According to Trydan Gwyrdd Cymru Chief Executive Richard Evans, the developments are expected to create hundreds of jobs during both the construction and operational phases, with a strong emphasis on working with Welsh companies and supply chains.

“We will create and support quality jobs, contribute to skills initiatives and ensure funding supports local priorities,” Mr Evans said.

He also confirmed that profits from the projects will be reinvested in Welsh public services and communities.

Labour attacks Farage and Plaid Cymru

In a political aside, Ms Evans took aim at opposition voices, including Nigel Farage, accusing him of wanting to “turn back the clocks” by scrapping green projects and “sending people back down the pits.”

She also criticised Plaid Cymru for supporting net-zero targets while allegedly obstructing the infrastructure needed to achieve them.

“Only Welsh Labour are looking to the future,” she said, “with optimism and ambition to seize the opportunities that come with the green revolution and harness them to deliver for the people of Wales.”

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