WATCH Theresa May's former deputy pours scorn on her 'Brexit dividend' claim
3 min read
Theresa May’s former deputy has joined criticism of the Government’s claim that a major increase in NHS spending will be funded through a “Brexit dividend”.
Ministers yesterday insisted the £20bn-a-year rise by 2023 would be funded by tax hikes, which were yet to be decided on, and money saved by no longer having to pay-out to Brussels as an EU member state.
But Damian Green, who was forced to resign as Cabinet Office minister in December, said it was “fanciful” for ministers to try and predict the amount of cash available to the Treasury in three to four years from now.
He also distanced himself from the idea that it could be part-funded by a “Brexit dividend”, a claim that has already been shot down by respected thinktank the Institute for Fiscal Studies.
“I wouldn’t use that phrase, because the fact is we don’t know..,” he told the BBC’s Daily Politics.
“The amount of money the Chancellor will have to spend or the amount he will have to borrow depends on the state of the economy, the amount of growth we have, which dictates the amount of taxation people and companies can pay. Broadly speaking, it’s as simple as that.”
Mr Green added that figures around growth were “guesswork” as he pointed out that the Government’s stance does not square with that of top economists who say Brexit will “depress” the economy.
He added: “The effect of Brexit on the economy, most economists are actually saying that it will depress growth a bit, although it won’t lead to the huge recession we were warned would happen before the referendum…
“The Government’s own figures are looking-ahead guesswork, as are every other economist’s figures, so the idea that you can say what the state of the public finances is going to be in 2021-22 is pretty fanciful.
“All economic projections are fanciful for that point of view.”
The claim by the long-term ally of Mrs May’s comes after the Prime Minister herself doubled down on the pronouncement amid growing criticism yesterday.
Paul Johnson of the IFS has dismissed the suggestion that the cash would come from Britain leaving the EU, telling the BBC on Sunday: “There isn’t a Brexit dividend.”
He argued the forecast downturn in the economy as a result of Brexit, the so-called 'divorce bill' and other payments to maintain some EU functions meant any extra money had already been spent.
Conservative MP and chair of the Health Select Committee, Sarah Wollaston, meanwhile branded it “tosh” which “treats the public like fools”.
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