Conservative MP for Totnes Sarah Wollaston
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Sarah Wollaston to fight for health committee chairmanship

Independent-minded Tory MP to run for post.

Conservative MP Sarah Wollaston has declared her intention to stand for the chairmanship of the Commons Health Select Committee.

Her announcement today follows the surprise resignation of Conservative chair Stephen Dorrell two days ago.

Wollaston, Tory MP for Totnes, in effect announced his departure herself, after tweeting “I’m sorry to hear he is standing down as chair with immediate effect” on Tuesday morning, which apparently caught even Dorrell’s media team off guard.

A former GP and health committee member, her background in healthcare stands her in good stead for the committee's top role. So far her only other rival to declare interest in the post is fellow doctor Philip Lee, Tory MP for Bracknell.

While Lee can boast that, as a practising MP, he still has a hand in the health sector, Wollaston sees her independence from the NHS as a boon.

She told me today that while hands-on experience in the NHS is invaluable for a politician looking at health care, that her departure from the sector affords her greater impartiality. She gave up her memberships to the British Medical Association and the Royal College of General Practioners when she entered Parliament.

She said: "I left my clinical practice completely behind when I came into politics, so I'm not intending to be there representing the medical profession if I were elected. I think you're there to represent the public."

Selected as a parliamentary candidate in an American-style open primary, Wollaston has proven herself an outspoken politician since 2010.

A thorn in the side of David Cameron, she has attacked government failure to address pressing health issues, such as the minimum pricing of alcohol, and jibed the Prime Minister personally. Last year she criticised his inner circle for still being “too white, male, and privileged”.

Given her ability to provoke the Conservative leadership,  Wollaston is likely to prove a popular choice among Labour MPs for chairmanship of the health committee. It is worth pointing out, however, that her independent-mindedness has earnt her genuine respect from all tribes as well.

The role, which demands impartiality, would suit her in many ways, as she has been an vocal critic of crude party politics. She told me she would be “very keen” on the role partially because it eschews “overtly tribal politics” and praised former chair Dorrell for his “consensual style and clear impartiality”.

She said: “Select committees have become so much more effective since the Wright committee reforms [which included the election of committee chairs by the Commons rather selection by the whips], so it’s a job I’d be fascinated to do.

"We need indepth scrutiny of the health service - its finances and operations - now more than ever, having handed back so many powers to NHS England in particular."

Wollaston said that, were she to be elected as health committee chair, among her top priorities would be work on variation in practice across the NHS; mental health care; personalised care; examining outcomes and their use as tools, for example, in early diagnosis; and scaling back tender processes for small contracts where unnecessary.

Lucy Fisher writes about politics and is the winner of the Anthony Howard Award 2013. She tweets @LOS_Fisher.

 

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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