G20 finance ministers discuss "exit strategies"

France and Germany push for agreement to scale back economic support

Finance ministers from the G20 will meet in London today to discuss possible exit strategies from the economic measures of the past year.

France and Germany, whose economies have returned to growth, are keen to scale back support but the Chancellor, Alistair Darling, will argue that is too early to end fiscal stimulus

Speaking last night, he said: "I believe we can be confident about our prospects for 2010. But there are still uncertainties and risks that we have to confront".

He added: "And the biggest risk is to think that the job's done -- that recovery is guaranteed. No country can be complacent -- we've got to see this through."

But under pressure from other European leaders, Gordon Brown was belatedly forced to concede that "exit strategies" needed to be discussed "to avoid laying the foundations of new global imbalances in the longer run".

The finance ministers are meeting in advance of the G20 meeting in Pittsburgh later this month. They are also expected to discuss measures to curb excessive bank bonuses.

A letter signed by Brown, the French President, Nicolas Sarkozy and the German Chancellor, Angela Merkel, criticised the "reprehensible" return of inflated bonuses.

But divisions are expected to emerge during the summit with Brown strongly opposed to a French plan to introduce mandatory caps on bonuses.

The shadow chancellor, George Osborne argued that Britain needed to withdraw from large economic support in order to deal with the growing budget deficit.

"While the rest of the world is facing up to the need to deal with their budget deficits, the British Government is still in complete denial, despite having the largest deficit of all," he said.

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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.