Intended for healthcare professionals

Head To Head

Could Brexit harm the NHS?

BMJ 2018; 362 doi: https://doi.org/10.1136/bmj.k4014 (Published 26 September 2018) Cite this as: BMJ 2018;362:k4014

Linked commentary

Patients shouldn’t have to worry about an unhealthy Brexit

  1. Anand Menon, director, UK in a Changing Europe1,
  2. Graham Gudgin, honorary research associate2
  1. 1King’s College, London, UK
  2. 2Centre for Business Research, Judge Business School, University of Cambridge, Cambridge, UK
  1. Correspondence to: A Menon anand.menon{at}kcl.ac.uk, G Gudgin gg14{at}cam.ac.uk
    Follow Anand Menon on Twitter @anandmenon1

Predictions of a smaller UK economy, at least in the short term, and fewer EU healthcare staff present challenges for the NHS after 29 March 2019, argues Anand Menon. But Graham Gudgin is unconvinced by what he believes are biased estimates promoted by a government pushing for a soft Brexit

Yes—Anand Menon

No one knows what Brexit will mean for the UK. And for several reasons. We don’t know what Brexit will look like—will our relations with the EU be like those of Norway, Canada, Switzerland, or none of the above? And no one—not even, apparently, the government—knows how we will adapt as a country to leaving the EU. What is the plan for health, for education, or for immigration?

The EU has limited direct competence over health policy. Consequently, the effect of Brexit on the NHS will be mostly indirect. Nevertheless, there are at least two good reasons to think that, in the short to medium term, Brexit’s effect on the NHS will be negative.

Smaller economy means less money

The first is Brexit’s wider economic implications. Based on an analysis of the likely effect of, among other things, barriers to trade and falling migration,1 government forecasts most independent economists suggest that the domestic economy will be around 5% smaller than it otherwise would have been if the UK and EU sign a free-trade agreement, which remains the government’s preferred option. Remember that gross domestic product (GDP) would need to be just 0.8% smaller2 than it otherwise would have been to wipe out any gain from no longer paying into the EU budget— the famous Brexit dividend.

And speaking of budgets, in its analysis of the November budget, the independent Office for Budget Responsibility suggested that by the early 2020s public finances would be £15bn (€17bn; $20bn) a year worse off as a result of Brexit.3 Even assuming that, once out of the EU, the government decided to spend the whole of the UK net budgetary contribution to the EU on health—and this is a heroic assumption, given the competing demands of those, including farmers, academics, and less prosperous regions, who already receive EU funding—this would amount to just £8bn.

All the signs are, therefore, that the government will have fewer resources after Brexit. And this in a context in which the Institute for Fiscal Studies, an independent think tank, reported that cost pressures on the health service will grow and NHS spending will have to rise by 3.3% annually simply to maintain today’s level of service.4 Spending more while having less, in other words.

So the financial picture is potentially grim. That regarding NHS staff is equally so. Before the 2016 referendum, the number of UK nationals was falling as a share of the NHS workforce, with that of EU nationals rising.5 Around 2500 EU nationals (net) joined the NHS in the quarter before the referendum. Between March and December 2017 the figure was just over 200.5

Vacancies are at record levels

All this comes at a time when vacancies in NHS England are at record levels (surpassing 30 000 for the first time in June 2017), and NHS Trusts lack sufficient visa quotas for non-EU nationals.6 EU nationals, moreover, make up a disproportionate number of frontline staff: they represent 5.5% of total staff but 9.5% of doctors, 9% of consultants, and 7% of nurses. Should current trends continue, we are likely to experience a shortage of doctors and nurses.

Brexit, therefore, will pose a substantial challenge for the NHS. This might, of course, prove a catalyst for necessary reform. The training of more British frontline staff, for instance, seems a sensible response to staff shortages. Moreover, economic forecasts are just that. They are not predictions. But making trade harder with our nearest and largest trading partner is unlikely to increase our economic performance in the short to medium term. And the fiscal environment is, even now, hardly encouraging. There were many good reasons for being dissatisfied with EU membership. Wanting a better staffed and funded NHS, however, was not among them.

No—Graham Gudgin

Brexit could affect the NHS firstly through its impact on the UK economy. A smaller economy would result in reduced public expenditure, although the NHS might continue to be protected. A second way is through potential immigration controls affecting the inflow, and perhaps retention, of EU nationals working in the NHS.

The Treasury, Bank of England, London School of Economics and others have estimated the potential economic effects of Brexit, but it is difficult to get a clear, credible, or consistent message from them because of differences in the estimates and to their impenetrable and varied technicality. Gross exaggeration of the negative effect of Brexit has been common.7 The Treasury published two lengthy reports during the referendum campaign.89 The predictions in its short term report have proved embarrassingly wrong. The predicted year long recession, half million increase in unemployment, and higher taxes have not materialised. In fact, the opposite has occurred, with a fall in unemployment of 279 000.10

Flawed methods

We will not know for many years if the Treasury’s long term Brexit predictions are similarly incorrect, but my research with (remain voting) colleagues at Cambridge and Ulster Universities to replicate the Treasury methods showed major flaws that quadrupled the predicted negative effects.7 Other official bodies, including the OECD, used similar flawed methods. The Treasury refused to discuss these points but has now dropped its original approach, instead adopting a more theoretical American model.1 Academics using the same American model obtain an effect of Brexit only one third as negative (2.5% of GDP) as those predicted by the Treasury (7.7% of GDP).11 Such exaggeration is not unexpected: Treasury civil servants serve Remainer chancellors (George Osborne and Philip Hammond) and can hardly undermine their masters.

Our economic modelling predicts that per capita GDP may be temporarily smaller in the early 2020s compared with a non-Brexit outcome, by around 1.5%, but will quickly recover. Our estimates are less optimistic than those of Economists for Free Trade, which uses a different modelling approach,12 but we both view the long term effect of Brexit as positive. Tax revenues may also be smaller in inflation adjusted terms, but there are no negative effects. Moreover, higher inflation is reducing the UK’s public debt to GDP ratio, allowing scope for higher spending if the government wishes.

Reality on staffing has been benign

Huge publicity has also been given to potential problems with EU staffing in the NHS, but the reality has again been benign. NHS headcount data for England up to January 2018 shows that the number of EU national staff has risen by 7000 (12%) since the beginning of 2016.

Post-Brexit migration controls may mean the NHS sees a switch in staff from EU to non-EU nationals but a long term fall is unlikely. Rather than worrying about Brexit, to protect the NHS’s medical workforce the UK should relax its ludicrous restrictions on medical training places and cease poaching staff from poorer countries.13

Footnotes

  • Competing interests: Both authors have read and understood BMJ policy on declaration of interests and declare the following: AM receives funding from the Economic and Social Science Research Council. GG is chief economic adviser to the right wing think tank Policy Exchange.

  • Provenance and peer review: Commissioned; not externally peer reviewed.

References

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