Blackstone Applies To FSA For UK Bank Licence

Blackstone, the US-based private equity giant, has applied to the Financial Services Authority (FSA)

Reportedly, it has teamed up with the wealthy Pears family and fund manager Cambridge Place to form a new bank called The Home and Savings Bank.

Home and Savings Bank aims to sell simple savings and mortgage products from the first quarter of 2010. It has named Peter Birch, the former CEO of Abbey National, as chairman and Stuart Sinclair, the ex-boss of Tesco Personal Finance, as CEO.

Blackstone will provide a capital of about GBP250m to the Home and Savings Bank and is in talks with other investors to raise a further GBP250m. Home and Savings Bank is said to be aiming GBP17bn of assets in five years, before which Blackstone intends to get the new bank listed on the stock market.

Home and Savings Bank is considering acquiring Northern Rock from the government in addition to the branch networks that have been put up for sale by RBS and Lloyds Banking Group.

Blackstone is not the only new entrant looking to foray into the UK for retail banking. The US-based Metro Bank is planning to open a London branch soon, while Walton & Co, backed by Panmure Gordon, a UK-based corporate and institutional stockbroker and investment bank, wants to target affluent savers and business borrowers. The new entrants are aiming to use service and simple products to lure customers who are not satisfied with their existing banks.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.