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Morning Wrap: need to know business stories

Top stories from around the web.

Apple faces grilling over US tax rate (FT)

Apple would have paid a tax rate of about 15 per cent last year, far below the 25.2 per cent it reported, had it not used a form of reserve accounting that sets it apart from other big US technology companies.

The rare accounting treatment has helped to distract attention from Apple at a time when the tax-avoidance strategies of other cash-rich US tech companies, notably Google, have come under public attack, according to tax experts.

Yahoo buys Tumblr for $1bn (FT)

Marissa Mayer, chief executive of Yahoo, has made her first big bet to jump-start growth at the stalled web portal company with the purchase of New York start-up Tumblr, according to two people familiar with the deal.

One of these people put the price of the acquisition at “more than $1bn”, while other reports indicated that Yahoo had agreed to pay $1.1bn in cash.

David Cameron warns overseas territories on tax (BBC)


Prime Minister David Cameron has urged British overseas territories to "get their house in order" and sign up to international treaties on tax.

He wrote to 10 territories and crown dependencies, including the Cayman Islands and the Isle of Man, which operate low-tax regimes.

Ryanair profits at record high despite fuel cost rise (BBC)

Discount airline Ryanair has reported record full-year profits and rising revenues, despite soaring fuel costs.

Profits after tax rose 13% to 569m euros (£481m) on revenues of 4.88bn euros for the year to 31 March.

Troubled FirstGroup announces rights issue as chairman Martin Gilbert steps down (Telegraph)

FirstGroup, the heavily indebted train and bus operator, has confirmed it is raising £615m through a deeply discounted rights issue and has scrapped its final dividend to ease pressure on its balance sheet and avoid a downgrade in its credit rating.

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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.