Show Hide image

Morning Wrap: today's top business stories

News stories from around the web.

Peltz urges PepsiCo to buy Mondelez (FT)

Nelson Peltz has launched a public campaign to transform PepsiCo, urging the group to first merge its snack business with Mondelez in a $60bn deal, and then to spin out its slow-growing soda business to shareholders.

India toughens up on insider trading (FT)

India’s main financial market regulator has been handed new powers to investigate insider trading, a decision hailed as a significant step forward in the country’s battle against securities fraud.

End of QE looms on signals from UK and US (Telegraph)

The end of quantitative easing in the Western world loomed closer after both the UK and the US signalled a potential retreat from the controversial crisis policy.

Gas prices could fall by a quarter with shale drilling, Government advisers say (Telegraph)

Gas prices could fall by a quarter and help bring down household energy bills if Britain exploits its shale gas reserves, a report commissioned by Ed Davey, the Energy Secretary, suggests.

Two tech titans, IBM and Intel, have reported big drops in net income (BBC)

Intel reported a second-quarter profit of $2bn (£1.32bn), down 29% from a year ago. For its part, IBM saw earnings for the same period fall 17% to $3.23bn.

Getty Images.
Show Hide image

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.