Monday, 18 June 2018

So there isn't a Brexit Dividend? (Or maybe there is...)

The decision to announce a huge bus-driven bung to the NHS has resulted less in a debate as to whether this is a good idea, if it's too much or too little cash, or cynical politics than one about whether there is (or isn't) a Brexit Dividend.

Seems to me there are three ways of looking at this question.

1. We pay over a significant sum to the European Union. For the sake of argument, let's call it £350m per week. When we leave the EU, we won't be paying over this sum of money so it stands to reason that money is available to spend on other priorities like the NHS. The only question that follows from this gives us the second way of looking at this issue.

2. Yes we won't be sending that £350m each week to Brussels but, after Brexit, we won't have all that money to bung at the NHS. In the short term there will be transitional costs, we have to consider what, if anything, replaces the agriculture subsidies, the regional development grants, and the social policy money. We also have a border to staff up, a trade department to run and ongoing costs where we decide to buy into EU programmes like Erasmus. In the short run - maybe five to ten years - there simply won't be a Brexit Dividend. It all makes some sort of sense - unlike the third argument.

3. There'll be no Brexit Dividend because government revenues will be lower as a result of Brexit. Now, leaving aside that this implies an actual decline in GDP rather than a drop in GDP growth, the truth about this argument is that it can't be refuted as it is based on the comparison of an educated guess - 'growth will be X post-Brexit' - and an actual number - 'GDP growth was X'. The problem is that the forecasters, for all their big machines and grand degree, are always wrong. And, during the debate around Brexit, have always been wrong in direction of doom and gloom. This argument can be set out simply as "we said, on very little basis or evidence, that we'd have £110 for every £100 we had back than, we've only £105 so therefore we're worse off." It isn't a good argument.


1 comment:

Dan said...

Sir, this is politics, not real life.

As things stand the NHS is sacred because this government lacks the strength or the time to properly reform it. Instead the NHS is being used as a sacred cow for political means.

Right now Mrs May has a problem with sore loser Remainers. She badly needs a way to make them look like vile vermin. This announcement was her way of doing this, since arguing against Brexit can now be tagged not only with being against democracy but with being a despoiler of the sacred NHS as well.

This isn't enough to take the announcement into the realm of politically clever. No, the fact that this was done at a time when the Labour Party were on the back foot and trying to gain ground was the clever bit, since it tempted the Labourites into a game of taxation one-upmanship.

Labour should have quietly applauded from the sidelines and simply declared that at long last the Tory Party were singing from the same hymn sheet as Labour, long might this outbreak of common sense continue. Being twerps, they didn't.

No, Labour took the moron route of saying that they would tax people even more than the hated Tories to push yet more money at the NHS. The electorate would likely have heard only the phrases "Labour Party" and "More tax".

In one announcement Mrs May has thus backed the Remainers into a corner and invited the Labour lot to shoot themselves in the foot, and by doing so has confirmed the hypothesis that the current Labour Party are composed of moron Marxists without much political acumen.