June 17, 2018 / 7:22 AM / 6 months ago

Britain's May pledges 20 billion extra pounds for healthcare post-Brexit

LONDON (Reuters) - British Prime Minister Theresa May pledged on Sunday to increase funding for the National Health Service by 20 billion pounds ($26.57 billion) after Brexit, funded by money no longer spent on membership of the European Union and possible tax rises.

Britain's Prime Minister Theresa May speaking on the Marr Show on BBC television at her official country residence Chequers in Buckinghamshire, Britain, June 17, 2018. Jeff Overs/BBC/Handout via REUTERS

The announcement of more cash for the NHS, a regular issue at elections, comes after a row in parliament over Brexit highlighted the fragility of May’s minority government.

May said spending in England would increase to an extra 20 billion pounds by 2023/24. The pledge drew immediate scepticism, with critics saying the plans lacked detail and questioning whether leaving the EU would actually save money.

“As we leave the European Union and stop paying significant annual subscriptions to Brussels, we will have more money to spend on priorities like the NHS,” May said in a post on her Facebook account.

“But to give the NHS the funding it needs for the future, this Brexit dividend will not be enough. As a country, we need to contribute a bit more in a fair and balanced way.”

May said the spending increase was equivalent to a 3.4 percent funding increase in real terms. Independent experts say it needs even more than that to improve.

The idea of a “Brexit dividend” is also contested. The independent Institute for Fiscal Studies think tank highlighted government analysis showing public finances would weaken by 15 billion pounds per year after Brexit, and paying Britain’s EU divorce bill would eat up any savings initially.

In media interviews, May said her finance minister would set out plans before a government spending review expected next year. She said the increased contribution from taxpayers would be done in a “fair and balanced” way. She did not answer directly when asked whether borrowing might increase.

The announcement is timed to mark the 70th anniversary of the NHS, which delivers free access to care for everyone living in Britain. It aims to foster unity in the government and the country after two years of bitter divisions over Brexit.

But it is also seen as a political risk. During eight years in power, May’s Conservative Party has made fiscal discipline its core message. Any departure that involves tax increases could upset core voters and open it up to criticism from the opposition Labour Party.

“I’d certainly welcome it, if I could believe it,” Labour’s foreign affairs spokeswoman Emily Thornberry told the BBC. “Let’s see what they deliver. How are they going to pay for it?”

TAILORED MESSAGE

Sunday’s announcement was also tailored to send a positive message to the 48 percent of Britons who voted in 2016 to remain in the EU - many of whom are still unconvinced about Brexit as the March 29, 2019 exit date approaches.

During the 2016 referendum campaign on EU membership, the pro-Brexit camp claimed that Britain was sending 350 million pounds a week to the EU and should spend that money on the NHS instead.

The claim was controversial because the figure did not take into account Britain’s sizeable rebate or the payments that were flowing back from the EU to Britain, so it was widely seen as overstating Britain’s contribution to the bloc.

Slideshow (2 Images)

Despite leaving, Britain will continue to make payments to the EU over several decades to settle an exit bill of around 39 billion pounds.

In interviews, May - who campaigned against Brexit in 2016 and has been under pressure from hardline Brexiteers ever since to prove her conversion to the cause - drew attention to the fact that her funding announcement exceeded that 350 million pound-per-week figure.

Twenty billion pounds annually is approximately 384 million pounds per week.

Reporting by William James and Estelle Shirbon, editing by Marguerita Choy, Larry King

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