There is one thing about which almost all British politicians now agree—the NHS needs more money. And we know where it will come from. We have read it on the side of the Brexit bus. Once the United Kingdom leaves the European Union in 2019, there will be £350 million freed up. Or will there? A new study has modelled the British government’s preferred option for Brexit. It shows that the money available for the NHS will be a great deal less.
The problems besetting the NHS are clear for all to see, most obviously in a recent television series that brought the reality of a system in crisis into people’s living rooms. As always, the reasons are endlessly debated. Yet, the inescapable fact is that the austerity policies pursued since 2010, initially by the Conservative/Liberal Democrat coalition and, subsequently, by the present government, have dramatically reduced the annual increases in NHS funding seen in previous years. The Nuffield Trust, the Health Foundation and The King’s Fund, using data from the Office of Budget Responsibility, estimate that if it is to return to where it would have been had the previous rate of increase been sustained, it will require an extra £20 billion above that currently planned by 2022-23. This would take it up to approximately £150 billion from the current £125 billion. Somewhat reluctantly, under persistent pressure from several of her Cabinet colleagues and, especially, the House of Commons Health and Social Care committee chaired by the fearless and highly effective Sarah Wollaston, the prime minister has conceded that something must be done and has promised a long-term funding settlement, linking it to the forthcoming 70th anniversary of the NHS. Its size, and where it will come from, remain a matter of speculation, with persisting suggestions that it might take the form of some kind of hypothecated tax, despite the powerful arguments from leading health economists against this idea.
The need for extra funding has brought together an unlikely coalition of politicians. Some have had a long-term interest in the NHS. Others have come to it much more recently. Boris Johnson, someone not previously identified as having an interest in healthcare, will forever be remembered for standing beside a large red bus promising an extra £350 million per week for the NHS. This, the British public was promised, would be available only if they would vote to leave the European Union. Given the obvious problems that the NHS was facing, many people found this an attractive argument, with some of the main backers of Brexit regarding it as their winning argument.
There was, of course, one small problem. It wasn’t true. This was pointed out to Mr Johnson at the time by the chair of the UK Statistics Authority, who wrote in April 2016 that “The continued use of a gross figure in contexts that imply it is a net figure is misleading and undermines trust in official statistics.” Undeterred, Mr Johnson, by now Foreign Secretary, repeated the claim in September 2017, leading to a further rebuke by the new chair of the Statistics Authority, who wrote “I am surprised and disappointed that you have chosen to repeat the figure of £350 million per week… It is a clear misuse of official statistics.” And in January 2018 he repeated it yet again. The main criticism at the time was that this figure took no account of the rebates that the United Kingdom receives on its gross contributions or the money that is returned to the country through European Union programmes. It was possible to take these into account, and the resulting figure was far smaller than that claimed. Yet, as others pointed out, even that took no account of the damage that would be done to the British economy as a consequence of disruption of trading arrangements with the remaining European Union. That would require detailed econometric modelling.
Inevitably, some Brexit supporting politicians saw no need for such calculations. They envisaged Brexit ushering in a boom in the United Kingdom’s global trade, maintaining frictionless agreements with the European Union, while forging new links with the rest of the world. Quite how this would be achieved was never explained. Critics were spoilt for choice in picking holes in the arguments. How, they asked, could one maintain all the advantages of being in a European customs union from outside it? If the European Union was indeed holding back Britain’s trade with the rest of the world, why was it that many of our European partners had much higher trading volumes with countries elsewhere, including many, such as India, with historic links to the United Kingdom. How did they reconcile these claims with evidence that it was the United Kingdom that had held the European Union back from negotiating free trade agreements, such as that with India, because of British insistence on restricting visa access?
Yet these calculations did exist, even if they were considered closely guarded secrets by ministers. There was a near consensus by academic economists that all the possible scenarios would inflict severe damage on the economy (even the most superficial inspection of the handful of exceptions finding net benefits could be shown to be totally implausible, or require changes that would be politically difficult, such as ending almost all manufacturing activity in the United Kingdom). Finally, the government’s own estimates were leaked. Each of the scenarios that they examined would lead to a significant reduction in economic growth.
In response, ministers argued that there was really no need to worry. The government, we were reassured, was negotiating the best of all possible Brexit deals and this had not been modelled. This would ensure all the benefits that the United Kingdom already enjoys, along with many more. Casting aside the repeated rejections of their proposals by both the European Union and the vast majority of independent observers, all noting that what was being asked for was either impossible on practical grounds, or incompatible with European treaties, they continued to paint a picture of some future golden age. They implied that benefits were so obvious that there was really no need to model their economic consequences.
Yet, if the government was not prepared to make such estimates, it was only a matter of time before somebody else did. And this is what has now happened, in a report, written by Jonathan Portes, professor of economics and public policy at King’s College London for the think tank Global Future.
The findings are profoundly concerning. It estimates that the existing models, based on arrangements between the European Union and Norway, would make the United Kingdom worse off, costing £262 million and £877 billion per week respectively, very different from the promised £350 million increase. The so-called “no deal” option would be catastrophic, costing £1.25 billion per week, although given the severe consequences of such a scenario, and in particular widespread food shortages, mean that this cannot seriously be considered an option. So far, nothing new, with the figures broadly in line with previous estimates, including those by the Treasury and Office of Budget Responsibility. What is new, however, is what the government has so far striven to avoid, an estimate of the impact of its preferred option, based on what can be ascertained from the prime minister’s pronouncements, a task that is challenging as she has said as little as possible and much of what she has said is implausible. But with these caveats, the figures come out at a cost of £650 million per week, hardly the sunny uplands that ministers have promised.
So what do these estimates mean for the NHS? The report helpfully expresses the figures as a percentage of the 2018 NHS budget. The Norway option would reduce the NHS budget by 9%. The Canada option would see a cut of 31%. No deal would reduce it by 44%. And the government’s preferred option by 22%. And of course, money is only part of the problem. All of these scenarios will impact adversely on the supply of health workers, pharmaceuticals, medical technology, and much else, all posing severe threats to the NHS.
But maybe people think that this is a price worth paying? Television reporters appear to have no difficulty in finding people who say that they know Brexit will have a cost but it will be worth it to be free from Brussels bureaucracy or to reduce migration. But how representative are they? Global Future commissioned a survey of 2,000 people to find out. An overwhelming majority rejected all four scenarios. When forced to choose one of them, a slim majority, 51%, preferred the Norwegian model. Only 28% supported the government’s option (36% of those who voted leave). Of all the options it was the government’s one that most people thought would be a price worth paying, but this reached only 23% (28% among those who voted Leave). Each of the other options was considered too high a price to pay by at least 83%, a figure that was the same for all voters and only those who voted leave. Other exercises, such as the Citizens’ Assembly on Brexit, also highlight the importance of getting people to confront the evidence and make trade-offs, rather than accepting wildly misleading statements from some politicians.
This report has been published at a time when the Brexit process is in serious trouble. The British government has made almost no progress in the negotiations so far, except insofar as it has conceded all the European Union’s demands, something that was hardly surprising given that any agreement has to be practically feasible and compliant with the European Treaties, with most of the government’s proposals meeting neither criteria. A steady stream of revelations from whistleblowers, coupled with some outstanding investigative journalism and forensic questioning by the House of Commons Culture, Media, and Sport Committee, has question the legitimacy, and indeed the legality of the Leave campaign. Peers from across the political spectrum have delivered decisive defeats to key planks of the government’s approach. And the government’s revised timetable for legislation to implement Brexit is glacial. Brexit is going nowhere fast.
Is this a bad thing? Maybe not. There is a growing belief that the most likely scenario is one in which the United Kingdom entered an indefinite transition period, retaining most elements of the status quo, but without a voice in decision making. The resulting uncertainty, with its implications for the wider economy and NHS staff from the rest of the EU, will be problematic. But for the NHS it seems likely to be the least damaging of the options available.
I’ll be hosting a webinar asking whether the UK is spending enough on healthcare at the Royal College of Physicians on Monday 23rd April 2018. Do join me.
Martin McKee is professor of European public health at the London School of Hygiene and Tropical Medicine.
Competing interests: None declared.