Speed dating

It occurred to me my personal equivalent of speed dating is, in fact, the hotel fire scare. In many

I am writing this on a train – to be precise, the train that I had to buy a ticket for when it turned out that the train I had a ticket for didn’t exist as a result of obscure and perhaps satanic influences – or simply because it’s a British train and therefore one small, but highly effective, part of a multi-layered plan to make travelling by public transport impossible.

So I spent two hours of this afternoon huddled in a hot corner of Kings Cross, eking out a soda water and lime and waiting to climb aboard what these days constitutes my office. No one phones me on trains, no one faxes me, no one can email me (because the advertised wi fi doesn’t work) I can drink cups of appalling and vaguely stimulating milky tea (my intolerance to both caffeine and dairy making this a heart-racing and phlegmy thrill) I cannot distract myself with household chores, or minor acts of self-harm (except for the tea) and I can actually get some work done.

The only story I’ve ever had accepted by the New Yorker was written on a train, the short story I am currently writing is being written on a train, this is being written on a train – dear God, I had exactly one day to deal with my washing, ironing and post after returning from the Fringe and then I was off again – on a train - and now I’m heading back – on a train. Before being off some more. I may never find out what’s in my own freezer again. If I had enough time, I might find it alarming that spending a month surrounded by showpersons, comics and diseases while performing at least once a day constituted a restful burst of sanity and a chance to bond and chat with people I hadn’t made up earlier out of my head.

The lunacy of my current existence was recently brought home to me when I considered speed dating. Not as a thing I would have to be drugged, handcuffed and forced to take part in at gunpoint – just as a concept.

My innate shyness, alarming sense of humour, twitches and ridiculously high boredom threshold effectively prevent me from dating, even at a moderate pace, and should I suffer a personality-transforming head injury that makes me want to sit at a table opposite a succession of sad-eyed Brians and Dereks, my being semi-permanently on a train would prove a grave obstacle to nervous glances and whatever “small talk” might turn out to be.

It occurred to me the other night that my personal equivalent is, in fact, the hotel fire scare. In many ways, piling into a damp car park at 3am with a load of strangers is an ideal way to meet new chums. There you are, united by adversity, with plenty of amusing grumbles to share and ample opportunity to check out the night attire of potential mates – will you nod enticingly to the flannel pyjamas and anorak, or the bare feet, jeans and pullover, or go for the mysteriously rakish overcoat and ankle boot combination?

Being more that a little paranoid, I’m comforted by knowing how someone will react in a crisis. And, being a night owl, I do tend to shine in the small hours - especially if I’m the only woman present who doesn’t look as if she’s been regurgitated by a killer whale – even more especially if I happen to be in a sharp suit and my lucky shoes. Not that my state of enviable readiness would in any way suggest that I might have left some smouldering leaves in a vestibule for some reason and forgotten to smother them with sand.

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation