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IFS challenges Gove claims over extra NHS spending post-Brexit

Published 06/06/2016

Michael Gove had claimed that Brexit would free up cash for spending on public services
Michael Gove had claimed that Brexit would free up cash for spending on public services

Michael Gove's claim that Brexit would allow the UK Government to spend billions more on the NHS has been challenged by a respected economic think-tank.

The Institute for Fiscal Studies (IFS) said that although leaving the European Union would mean not having to pay £8 billion a year to Brussels, the economic damage of Brexit would be greater than the savings.

The think-tank said that would mean less money to spend on public services such as the NHS, the possibility of higher taxes or increased government borrowing.

In his appearance on a Sky News set-piece interview and debate on Friday, Mr Gove said: "There are billions of pounds that we send to the European Union every year and the Institute for Fiscal Studies has pointed out that if we took that money back we could spend it on our NHS, we could use it to reduce VAT on fuel."

But the IFS responded in a statement on its website: "Michael Gove claimed on Friday that the IFS had said that leaving the EU would free up £8 billion to spend on the NHS. We have not said that.

"We have looked carefully at the likely public finance implications. We conclude that the net UK contribution to the EU over the next few years is indeed likely to be about £8 billion a year, £8 billion which would become available for other things were we to leave.

"However we also point out that even a small negative effect of just 0.6% on national income from leaving the EU would damage the public finances by more than that £8 billion. There is virtual unanimity among economic forecasters that the negative economic effect of leaving the EU would be greater than that.

"That is why we conclude that leaving the EU would not, as Michael Gove claims we said, leave more money to spend on the NHS. Rather, it would leave us spending less on public services, or taxing more, or borrowing more."

Former chancellor Lord Darling said: "The IFS are clear - leaving the EU's Single Market would leave us spending less on public services such as the NHS, or taxing more, or borrowing more.

"The NHS, and everyone who relies upon it and works in it, is stronger thanks to our membership of the EU. Leaving would be a leap in the dark."

The IFS has previously reported on the economic risk of Brexit, leading to Mr Gove's Vote Leave campaign branding it a "paid-up propaganda arm of the European Commission" because it receives funding for academic work from Brussels - a charge strenuously denied by the think-tank, which stressed its independence.

Vote Leave chief executive Matthew Elliott said: " If we Vote Leave we will be able to stop sending £350 million a week to the EU.

"We only ever get half of that back which means we will have over £8 billion to spend on our priorities like the NHS when we leave.

"We reject the predictions of doom by the EU-funded IFS. They rely on the dodgy assumptions of establishment economists and the Treasury - it is the same people who predicted the world would end if we did not join the euro.

"The Remain campaign don't want to take money away from Brussels to spend it on the NHS, but on 23 June that's exactly what a Leave vote will enable us to do."

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