Show Hide image

Canada rejects BHP's takeover bid for Potash

Government blocks global mining company's £23.7bn bid on the basis that it would not provide a "net

The Canadian government has blocked global miner BHP Billiton's $38.6bn (£23.7bn) bid for Potash Corporation of Saskatchewan.

Canada Industry Minister Tony Clement, who reviewed BHP's bid, said the deal would not benefit the country.

In a statement released after the decision, BHP said it was "disappointed" but believed that the deal would benefit Canada.

However, shares in the mining giant rose to their highest level in almost seven months, as BHP investors were now expecting the Anglo-Australian miner to return capital through a share buyback or expand its interests in oil and gas in an effort to put its growing cash pile to work.
"I have come to the conclusion that BHP Billiton does not present a likely net benefit to Canada," Clement said.
BHP now has 30 days to try to convince Canada to reverse the decision through "additional undertakings," Clement said.

Ottawa laws require government officials to review takeovers by foreign companies to make sure that Canada could make a net benefit from any deal.

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.