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Do we really have a ‘Brexit dividend’?

What it means & why £20bn isn't as much as it sounds

The numbers behind this morning's economics headline are so confusing, they've got journos hitting out at each other for writing their pieces on it "as if they had no calculator available". Ouch.

What it means: Okay, let's give it our best shot.

In a deja-vu throwback to the times when every newspaper's front page revolved around debating a highly controversial economics slogan on a bus, Theresa May is saying she'll put £394 million a week into the NHS from 2018-2023, a total of £20bn a year over five years... over half of which will come from money we're no longer sending to the EU, or a 'Brexit dividend'.

What does that number actually mean? Well, it's equivalent to a 3.4% budget increase per year – more than what the Conservatives have put in so far, but less than the average since the service was founded (3.7%), and less than what economists say it would need to move from not-sinking to actually-improving (4%).

But people aren't too sure about the calculations here. We send £19bn a year to the EU. But the EU spends on us too: notably on subsidies to UK farmers. We'll have to fund those ourselves. Plus, because of all the uncertainty and investment possibly leaving the UK, we're not going to be making as much money in the years immediately after Brexit as we were before – which will cost us approximately £8bn in tax revenue per year, estimates show. (Even a group called 'Economists For Brexit' agrees there'll be a 'hit' to finances).

That leaves us a grand total of £0 to add to the NHS... which leaves a big Brexit-dividend-shaped hole in this plan.

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Reader Comments

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?