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RBS begins review of lending to SMEs

Bank of England's former deputy governor Sir Andrew Large leads the review.

The Royal Bank of Scotland (RBS), which is 81 per cent owned by the British government, has commenced a review of lending to small and medium enterprises (SMEs).

In May, the bank's former CEO Stephen Hester said the bank had a spare cash of €20bn, which it was keen to lend.

The review is being led by Sir Andrew Large, a former deputy governor of the Bank of England, in association with management consultants Oliver Wyman.

Chris Sullivan, head of UK corporate banking at RBS, said: “Demand for lending remains a challenge, but we want to do more than just wait for demand to materialize. We want to play our part in securing the recovery.”

The bank halted financing to SMEs, which play a vital role in Britain’s economy, since the beginning of financial crisis in 2008.

Separately, Ireland-based Ulster Bank, a subsidiary of RBS, is planning to close around 40 branches over the next three years, as part of its plan to return to profits.

This move may affect most of the rural branches of Ulster Bank and leave most of the provincial towns without access to its banking services whilst reducing 1,800 jobs by 2016.

Earlier in January, Ulster Bank said it would to close 22 branches.  In early 2012, Ulster Bank cut 950 jobs.

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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.