Calls for Theresa May to come clean over £20bn ‘Brexit dividend’

Theresa May was speaking on the BBC's Andrew Marr Show on Sunday
Theresa May was speaking on the BBC's Andrew Marr Show on Sunday
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A £2 billion Barnett formula windfall for Scotland must be spent on the NHS, opposition parties have warned the SNP.

Theresa May is facing growing pressure over her claim that a so-called ‘Brexit dividend’ will help pay for a boost to NHS spending in England worth £20bn a year within five years.

Critics called on the Prime Minister to come clean over the increases in tax and borrowing needed to deliver the additional spending, which Mrs May said would deliver on the Leave campaign pledge to spend £350 million more a week on the NHS after Brexit.

Announcing the shift in policy to mark the 70th anniversary of the health service next month, the Prime Minister said NHS spending would be £384m a week higher in real terms by the end of 2024.

She admitted that “to give the NHS the funding it needs for the future, this Brexit dividend will not be enough”, but claimed that “as we leave the European Union and stop paying significant annual subscriptions to Brussels, we will have more money to spend on priorities such as the NHS”.

Paul Johnson, director of the respected economic research organisation the Institute for Fiscal Studies, said: “There isn’t a Brexit dividend. Over this period, if you look at the arrangement we have come to with the EU in terms of paying our exit bill, and you add to that the commitments the government has already made to keep funding farmers and so on, there is literally, arithmetically no money.

“In addition, we know, because the government has accepted this, that the public finances will be worse as a result of the Brexit vote – and OBR [Office for Budget Responsibility] has said by about £15bn a year.”

Mrs May’s claim was also dismissed by one of her own MPs, the Tory chairwoman of the health and social care committee, who described the Brexit dividend as “tosh”.

Sarah Wollaston, a practising GP, tweeted: “The Brexit dividend tosh was expected but treats the public as fools. Sad to see Govt slide to populist arguments rather than evidence on such an important issue.”

Shadow chancellor John McDonnell dismissed the announcement as a “publicity stunt”. “Can you imagine if I’d come forward like this?” he told the BBC’s Pienaar’s Politics programme. “There would be accusations of magic money trees, this is a magic money forest that’s come out this morning.”

No detail of how the pledge will be funded is expected to be confirmed until the budget in November. While the announcement was welcomed by the BMA and chief executive of NHS England, others questioned whether increasing the health service budget by 3.4 per cent a year was enough to stave off a crisis after years of real-terms cuts.

Nigel Edwards, the chief executive of the Nuffield Trust health think tank, said: “While a welcome respite, it will not equip the NHS to make much-needed changes to services, adopt new technologies, or expand the workforce.”

Scottish Conservative leader Ruth Davidson said the announcement was “hugely welcome”.

The Scottish Tories’ shadow health secretary, Miles Briggs, called on the SNP to ensure “every penny of the extra cash she receives thanks to this UK government action goes on health care here in Scotland”.

Mr Briggs said: “Too often in the past the SNP has failed to meet extra investment in the rest of the UK. The SNP must not be allowed to do that again.”

Labour health spokesman Anas Sarwar called the additional funding a “sticking plaster” but said any Barnett consequentials must be passed on to the NHS in Scotland.

“We know health boards are already being forced to make huge cuts over the next four years and that the SNP has repeatedly failed to use the tax powers in the Scottish Parliament to properly fund the health service,” he said.

But the SNP health spokeswoman at Westminster, Dr Philippa Whitford, accused Conservatives of hypocrisy after cuts to the Scottish Government’s bloc grant.

“The Tory plan to hike taxes shows they are guilty of staggering hypocrisy – having bitterly opposed SNP government moves to boost NHS funding with progressive tax changes in Scotland,” the practising surgeon said.