Most likely less money and fewer staff, exacerbating the current strainby Anand Menon / April 25, 2017 / Leave a comment
Like it or not, this promises to be a Brexit election. Which makes some sense, given that the nature of Brexit will have a profound impact on the political and economic context within which any future government will have to operate. And, while the way in which Brexit proceeds is clearly crucial, its real impact will be substantive—in the way it changes our politics, our external relations and, of course, our economy.
Assessing the impact of Brexit will, of course, be incredibly difficult, complicated by the blame game that is bound to characterise its aftermath. Remainers will blame all negative economic outcomes on the decision to leave the European Union, Brexiters will look for scapegoats elsewhere. It is for this reason that the think tank I work for, The UK in a Changing Europe, has tried to lay out a series of economic tests to help in the task.
The fate of the National Health Service demonstrates the complexity of impact assessment. As my colleague Swati Dhingra has pointed out, the state of our public services is in part a reflection of the degree of historical investment. In 2010, the coalition pledged to protect the NHS from austerity. Yet healthcare spending has grown by just 1.2 per cent a year since 2010, compared with 3.7 per cent between 1949 and 1979 and over 6.7 per cent from 2007 to 2009, during the financial crisis. The UK now ranks 13th among the 15 original members of the EU in the percentage of GDP spent on healthcare.
So there is a legacy of under-investment, one that is already placing tremendous strain on the system. The British Red Cross has declared that the NHS is facing a humanitarian crisis. This will get worse rather than better—the government’s current plans imply the first sustained fall in NHS spending as a proportion of GDP in more than 60 years.
In addition, leaving the EU is widely expected to worsen the public finances. The Institute for Fiscal Studies estimates that the effects of Brexit will lead to a budget deficit in 2019-20 that is about £20-40bn higher than it would otherwise have been.
If these forecasts are borne out by events, Brexit will put a further squeeze on the public finances far outweighing any gains from ceasing payments into the EU budget. In addition,…