Nobody knows if there will be a Brexit dividend and it could be WIPED OUT by economic losses, top official at the Treasury warns despite promises to spend it on the NHS
- Sir Tom Scholar said ‘nobody knows’ what if any Brexit dividend will be available
- Treasury permanent secretary said it hinges on economic impact of final deal
- Vote Leave promised £350mn a week and No 10 said there would be a dividend
The top official at the Treasury warned there could be no Brexit dividend to spend tonight despite promises to plough it into the NHS.
Sir Tom Scholar, the permanent secretary at the Treasury, said all of the gains from not sending subscriptions to the EU could be wiped out by a slower economy.
He told MPs on the Treasury committee ‘nobody knows’ what the dividend will be until the terms of the final deal and its impact on the economy are clear.
Downing Street insisted there ‘will be a Brexit dividend when we stop sending huge sums of money to the EU’.
The top official at the Treasury Sir Tom Scholar warned there could be no Brexit dividend to spend tonight despite promises to plough it into the NHS
Sir Tom was answering questions from Labour MP Catherine McKinnell about whether there would be a ‘Brexit dividend’ to boost the public finances after the UK left the EU.
Sir Tom told the committee: ‘It is certainly the case as a matter of arithmetic that once the UK is no longer making net contributions to the EU, that is a call on the public purse that will be available for other purposes.
‘It is also true that depending on what the future relationship is and how different that is from the current relationship and what the economic impact is, there will be an impact on the economy and fiscal receipts that is potentially greater than that.’
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He added: ‘The answer is nobody knows and nobody can know until we know what future relationship is.’
The senior civil servant continued: ‘The overwhelmingly important thing here is the nature of the UK’s economic relationship with the EU.
‘If it’s a close one that supports continued economic growth then we can certainly afford to establish a few new agencies and that is why it is absolutely essential that is what is agreed.’
Vote Leave plastered a Brexit divided of £350million a week on the side of a red campaign bus and suggested the money be pumped into the NHS
In the referendum, Brexiteers including Boris Johnson said the windfall would equate to £350million a week.
Vote Leave plastered the number on the side of a red campaign bus and suggested the money be pumped into the NHS. The PM is saying she is making good on that pledge.
But the whole notion of a Brexit dividend is controversial and has been rubbished as ‘tosh’ by its critics – including Mrs May’s own MPs.
Economist Paul Johnson, of the Institute for Fiscal Studies, said any dividend will be wiped out by slower growth and lower tax revenues.
And he also pointed out that when Britain leaves the EU the country will go on paying vast amounts of money to Brussels as part of the Brexit divorce bill.
So while the UK will stop paying the annual £9billion, the country will still have a £39billion to pay over the coming years.
Downing Street insisted there ‘will be a Brexit dividend when we stop sending huge sums of money to the EU’
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