According to The King's Fund, we spent £212 billion last year on the NHS and social care although this included massive suns for PPE and test and trace - some £50+ billion I believe - but if we exclude that we are around £160 billion for normal day to day operations.
If Brexit had freed up £19 billion (about 12 per cent of NHS spending) there would surely have been no need to raise NI? That should have provided the NHS with its biggest funding increase in its history with money left over.
Of course the truth is the £350 million a week painted on the side of a bus was nonsense. Brexit hasn't boosted the government coffers, it has done precisely the opposite. The NI increase is to make up the shortfall in tax revenue caused at least partly by Brexit.
I don't believe Johnson should be criticised for raising taxes. It is perhaps the first decision he has made that is on the right lines. You can argue (as I will) that it was an inevitable result of Brexit but at least he is beginning to recognise the problem.
Jeremy Warner, an economics columnist on The Telegraph, questions the tax increase, complains that tax levels have now reached heights not seen since 1950. Anybody who thought Brexit would lead to tax cuts, especially after the devastating impact of the pandemic, really needs to get real.
These are the opening paragraphs of his article:
"Five hour, Covid-spreading queues at passport control, empty supermarket shelves, mountainous red tape when trading with Europe, big increases in business and personal taxes, including – unforgivably – 50 per cent marginal rates of taxation among some of the relatively young when taking account of student loan repayments, another sticking plaster solution to rising health and social care costs, more highly paid bureaucrats to “manage” the extra spending, apparent impotence in the face of a renewed onslaught of illegal migration – welcome to “Global Britain”.
"This always was something of a wooly concept, but the last 18 months of chaotic policy on the hoof is very much not what was expected of Brexit, with its “take back control” messaging. Freedom from the dead hand of Brussels was the promise; instead we seem to have left the EU not for the purpose of materially diverging, but only to become steadily more like them. Other than its distaste for the EU, Boris Johnson’s Government appears virtually indistinguishable from the social democratic mindset that dominates much of the Continent. Even its response to Covid almost exactly mirrors that of the EU as a whole.
"The success or otherwise of Brexit always depended vitally on what was done with its freedoms. Lower taxes and nimbler regulation were part of that calculation, at least when it came to the economic opportunities of Brexit. But other than a little tokenism on data and financial regulation, we have so far had the opposite – a rising tax burden and a deluge of red tape."
Warner is, in my opinion, an economist who doesn't understand the economy, or at least he doesn't understand business. Brexit was never going to bring any opportunities. Lower tax and nimbler regulations were always totally delusional.
Don't get me wrong, I am not a believer in tax for taxes sake, nor do I like paying taxes but things cost money. I spent 50 working years travelling around the UK and have watched as our towns and cities have crumbled and fallen into disrepair. Selby district has quite a high per capita income but the town centre has weeds growing out of the shop fronts and parts of The Crescent - the main thoroughfare - look like a strong wind would level some buildings.
Plenty of places in south and west Yorkshire are much worse. A French aristocrat sometime around 1996 asked me what had gone wrong with the UK and I confess I didn't have an answer but education and our political leaders must bear a heavy responsibility.
I first went to France in 1971, driving all the way to Barcelona in a mini van with a friend, and in those days it looked quite poor in some parts, chickens wandering along the cobbled streets of some villages and so on. It was all very rural.
But in recent years, right across Europe you can see the result of constant investment in infrastructure. The French road network is expensive but phenomenal and I cannot recall ever being in a traffic jam - this is mainly in Haute Savoie and eastern central France between Lyon, Dijon, Mulhouse and Geneva. The railways are terrific and healthcare excellent. German trams are a wonder, smooth, clean and very cheap.
Out problem is constantly believing, like Jeremy Warner, that the state of Britain is somehow a result of too little public investment and too much tax. Warner thinks the answer is to cut more tax rates to generate more revenue in the future.
Margaret Thatcher also believed in this philosophy and after the Healey years and 98 per cent tax rates it made sense to me. It worked for a while, but who now thinks we pay too much tax? Britain is one of the most lightly taxed nations in Europe and probably the most lightly regulated. Has this done anything for us? I think not, yet many commentators urge more of the same.
It is a failure to confront hard truths that leads us to try cheap, quick, 'jam tomorrow' solutions. Cutting taxes to increase future revenue is one and Brexit is another.
I despair that this sort of thinking still permeates right wing economic thinking. As I regularly write in this blog, we have not yet understood the problem let alone found an answer.
