Is May’s money for NHS really a Brexit 'dividend'?

The Leave campaign claimed £350m would be available for the NHS after Brexit. Credit: PA

Three points on what the prime minister has revealed today on the planned NHS spending increase that she will set out in detail tomorrow.

1) A rise of £20bn “real” over five years implies annual increments of 3.7% - which takes us back roughly to where spending was before the Blair/Brown bonanza from 2002 to 2010.

But the pressures of an ageing population were much less then. The extra money is no bonanza for the NHS.

2) The idea of a Brexit dividend, as articulated by the PM today, is dubious. UK growth has slowed significantly since the Brexit vote, at a time when global growth has significantly accelerated.

If this does not represent a Brexit drag on growth, it is very difficult to know what it is. And UK growth is forecast, even by the government, to limp along at 1 to 1.5% for years to come, a cut of roughly a third from pre-Brexit forecasts.

Lower growth cuts tax revenues more than we pay net to the EU budget.

3) To remind you, our net contribution to the EU budget, after money we get back from the EU in various forms, is nearer £150m a week than the £350m that was on the bus.

So even if you believe the reduction in UK economic growth is temporary and that there really will be a Brexit dividend, the PM’s promise of £600m extra in cash for the NHS in 2023/24 still means our taxes and government borrowing are set to rise by £450m a week.