Will the Lib Dems cave in to Osborne over deeper cuts?

Ahead of the Autumn Statement, the Chancellor is considering even larger cuts in order to meet his debt target.

One of the biggest dilemmas facing George Osborne ahead of the Autumn Statement on 5 December is whether or not to abandon his pledge to have the national debt falling as as a percentage of GDP by 2015-16. Economic growth of just 0.6 per cent over the last two years has left the government on course to borrow around £190bn more than originally intended. In March, the Office for Budget Responsibility forecast that debt would fall from 76.3 per cent in 2014-15 to 76 per cent in 2015-16 (thus meeting Osborne's target), but the IMF has more recently predicted that it will rise from 78.8 per cent to 79.8 per cent.

With this in mind, the government briefed in September that it would abandon the target. The Times (£) reported that Osborne, with David Cameron's agreement, was "ready to take a political hit on missing the target rather than face the 'nightmare' of further cuts."

But better-than-expected growth and borrowing figures have prompted a rethink, with Osborne now considering whether he could still meet the target by announcing even deeper spending cuts. In today's Telegraph, Peter Oborne writes that the Chancellor "wants to stick to his original economic strategy – a position he outlined eloquently during his speech to the Conservative Party Conference." The biggest obstacle to him doing so is the Lib Dems. Nick Clegg and Vince Cable have repeatedly said that they will not accept a "penny more" off public spending (or "a penny less"). Osborne could have attempted to win his coalition partners round by offering them some form of wealth tax, but he has already ruled out a "mansion tax" and rejected Clegg's call for an emergency tax on the rich.

It remains to be seen how the stalemate will be broken. As Oborne writes, "Osborne has nowhere to hide. Either he must give in to the Lib Dems, or the Lib Dems must give in to him." Should the Lib Dems blink first, it would be one of their biggest betrayals yet.

Nick Clegg has said that he will not accept a "penny more" off public spending. Photograph: Getty Images.

George Eaton is political editor of 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.