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Mythbust

Quitting EU wouldn’t save NHS

by Michael Emerson | 04.05.2016

Myth: Quitting EU would allow UK to inject billions into NHS

InFact: The economic damage caused by Brexit would hit tax revenue, dwarfing any EU budget saving. There would be less money for the NHS, not more.

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Our net EU budget contribution of £6.3 billion a year amounts to 0.3% of GDP.

Leaving the EU would have a depressing impact on the UK economy, at the very least for a period of years during which the uncertainty over terms of leaving would discourage investment and consumer confidence. The OECD has estimated that there could be a 3% hit by 2020.

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The corresponding reduction in tax revenues due to just the cyclical dip would be around one-third of the GDP reduction, thus around 1% of GDP, on the OECD estimates. That would be roughly three times what we’d save on our budget contribution. In other words, the government would have less money to spend on the NHS and other public services, not more.

This article is an adaptation of a piece that previously appeared on InFacts.

Edited by Hugo Dixon

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