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BP profits down, Deepwater Horizon costs up

High oil price still offset by Gulf clean-up costs for BP.

BP has made firstly quarterly profits for 2011 of $5.481bn - down 2 per cent on last year's $5.598bn.

The drop is a result of new clean-up costs in the Gulf of Mexico following the Deepwater Horizon disaster. BP has now been charged an extra $400m on top of the $40.9bn it had previously designated for the clean-up.

Giving their quarterly results on Wednesday, BP said it has agreed a $1bn early restoration programme for natural resource damage in the Gulf. The Coast Claims Facility have so far received 267,960 compensation claims from individuals, with over half still to be processed.

The clean-up amount comes largely from assets that BP has sold off, meaning the production of oil has slowed to 3.578m barrels a day. It has now been a year since an explosion at the Deepwater Horizon rig caused a spill of 5m barrels worth of oil into the Gulf of Mexico.

Alice Gribbin is a Teaching-Writing Fellow at the Iowa Writers' Workshop. She was formerly the editorial assistant at the New Statesman.

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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.