The economic losses suffered by the United Kingdom as a result of Brexit could have been enough to transform the National Health Service (NHS) into a world-class healthcare system and potentially eliminate waiting lists, according to a leading economist.
According to Stanford University economist Professor Nick Bloom, Brexit had reduced UK economy by between 6 and 8% of GDP through weaker trade, increased bureaucracy and prolonged uncertainty surrounding the country’s withdrawal from the European Union.
The scale of the loss, he argues, illustrates the opportunity cost of leaving the bloc, with the economic resources that could otherwise have been generated potentially sufficient to dramatically increase funding for public services.
In an interview with The Independent, Professor Nick Bloom revealed that the loss amounted to roughly £3,000 a year for the typical British person.
He added that the scale of the economic loss could be illustrated through its potential impact on the NHS.
“So we’ve lost six to 8 per cent [because of Brexit]. Imagine getting that back and spending all that money we’ve lost on the NHS. Suddenly, you would go from the current NHS to one that would be amazing. Budgets would go up by about two-thirds; probably, waiting lists would disappear.
“Hospitals would be refurbished; you’d have better-paid doctors, better-paid nurses, better equipment. So one way to look at it is all the money we’ve lost. If we hadn’t lost it, we could have spent it on the NHS. We’d have a world-class national health service.”
Professor Nick Bloom
The comments stand in sharp contrast to one of the most prominent economic arguments used by the Leave campaign during the 2016 referendum.
The campaign famously claimed that leaving the European Union would free up £350 million a week for the NHS, a figure displayed prominently on the side of its campaign bus.
Bloom described that claim as “exactly and perfectly wrong,” arguing that the economic consequences of Brexit have instead represented a significant loss of national income.
Brexit Uncertainty Added to Economic Cost
According to the economist, roughly half of the estimated economic loss came from Brexit itself, as Britain’s departure from the EU made it more difficult for British companies to trade with Europe.
He noted that “Brexit itself was just bad news, because it makes it harder for British firms to trade with Europe, and Europe’s about half of our trade pre-Brexit.”
The other half, he argued, was associated with the prolonged process of negotiating and implementing the UK’s departure.
“So the vote happened in 2016, but it took several years of back and forth, and multiple prime ministers, and votes, and re-votes, and haggles, negotiations. And so businesses over this period were left uncertain and paused on investment, paused on hiring, and finally we have Brexit done.”
Professor Nick Bloom
The findings indicate that the economic consequences accumulated gradually rather than appearing as an immediate collapse following the referendum.
The new research similarly found that Brexit’s effects built up over time as businesses faced increased uncertainty, higher trade barriers and the diversion of management resources towards dealing with the consequences of leaving the EU.
The research also found that Brexit’s effect on investment was particularly significant, with business investment estimated to have been between 12 and 18% lower by 2025 than it would otherwise have been.
The economist has therefore urged UK government to pursue closer relations with the European Union in an attempt to limit further economic damage and recover some of the losses.
Moreover, he added that, “Andy Burnham’s doing a juggling act. He’s got many balls in the air, but he’d like to get closer to the European Union. Why? Because it would improve the economy. Why? Because that would mean he doesn’t have to put up taxes or cut spending.”
“But the big cost of it is this – Farage, and the Brexiteers waiting in the wings, ready to pounce on him. So he’s like every politician, trying to kind of do one thing, get closer, but say another thing, which is we are independent and have our sovereignty. And good luck to him squaring that circle.”
Professor Nick Bloom
Meanwhile, Former Conservative Health Secretary Stephen Dorrell described the suggestion that Brexit would unlock additional money for the NHS as “fundamentally dishonest on a Trumpian scale.”
He argued that leaving the EU had “undermined the ability of the UK economy to create successful business and create wealth” and called on the country’s political leaders to confront what he described as the consequences of the 2016 decision.
He added, “Until we address that issue head-on, we will continue to be impoverished by the events of 2016.”
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