16 June 2016

In an attempt to make the EU referendum campaign more relevant to swing voters, both sides have dragged the NHS into the debate. However, by most metrics, it will make little difference to the NHS whether the UK is inside or outside the EU. There are a huge number of crucial issues to be discussed in this debate – economics, trade, immigration and sovereignty to name but a few – but the NHS is not really among them. At best, it is tangentially related to other issues and should be discussed in that light, and not as a central issue in voters’ decision making. Open Europe assesses the key NHS-related arguments on both sides and explains why they are either greatly exaggerated or lack credibility to begin with.

Remain

 

NHS dependence on migrant workers

  • Background: The claim is that the NHS is dependent on EU workers, as they comprised 4.3% of all those working in the Health and Social Care sector in 2014. Therefore, leaving the EU and ending free movement of labour would leave the NHS unable to meet its staffing needs.
  • Open Europe’s verdict: This claim seems exaggerated.  We see no practical reason why existing EU migrants in the UK should see any change to their legal status as a result of the referendum. More importantly, Australia and Canada both show it is perfectly possible to use migrant labour in your healthcare system without needing free movement. So long as the UK adopted a sensible immigration system, along the lines we advocated in our Brexit report, we see no reason why the NHS would fail to meet its staffing requirements in the event of a Leave vote. This system could even be designed to give preference to healthcare workers if necessary. Of course, such a system is not guaranteed, but it will be the decision of the UK government.

Fiscal impact of Brexit

  • Background: Both the Treasury and Remain campaigners argue that Brexit would have a permanent negative impact on the UK economy. Consequently, this would impact the UK’s public finances to the tune of £36bn in lost revenue by 2030 (according to Treasury analysis), resulting in less money being available for public services like the NHS.
  • Open Europe’s verdict: There is a growing consensus that Brexit would have a short term negative impact on the economy and the NHS already faces a funding shortfall of £30bn up to 2020/21 – £22bn of which it has committed to making up via efficiency savings.  However, this does not necessarily mean that spending on the NHS would fall – since the Government could take steps to make up any shortfall in the NHS budget, for example by redirecting spending from other departments, increased taxation or additional borrowing. However, none of these options would be politically popular or easy. We have estimated that the long-run effect of Brexit is much less certain and could be either positive or negative depending on the policies Britain pursued. Therefore, it is difficult to say with certainty what the long-run impact on the public finances or the spending priorities would be.

EU funding and collaboration for medical research

  • Background: According to the ‘Healthier in the EU’ campaign group, the UK has received around £530m in health research funding via the EU budget. In addition to providing this funding, Remain also argues that the EU enables greater cross-border collaboration, for instance through the European Research Council (ERC), which benefits medical research.
  • Open Europe’s verdict: The funding issue seems like another red herring. We see no reason why the UK Government couldn’t simply replace that funding in the event of Brexit, given that the UK is a large net contributor to the EU budget. While it is no doubt true that international collaboration is important to science, many non-EU countries such as Norway, Switzerland and Israel, also collaborate with the ERC. It seems unlikely that EU member states would refuse to continue collaborating with the UK in the event of a vote to leave – particularly on an issue of such importance as healthcare.

Leave

 

Budget saving

  • Background: Leave campaigners claim that post Brexit an extra £350m per week could be spent on the NHS thanks to savings in the UK’s EU budget contribution.
  • Open Europe’s verdict: It has been well established that the £350m figure is incorrect. Looking at the UK’s contribution to the EU budget in 2015, the maximum amount that could be saved upon leaving the EU is £12.9bn (the gross contribution after the rebate). After factoring in all the public sector and private sector recipients, as well as the money the UK spends on meeting its 0.7% foreign aid target via the EU, the net contribution stands at £6.6bn. Therefore, it is possible the NHS could benefit from a maximum £6.6bn in additional funding (4.9% of its current budget). The NHS is already facing a significant funding shortfall (see below), so realistically any savings would go towards plugging this gap rather than on providing new services. Of course, some of this funding has also been promised to other areas. It’s worth noting that in their recent list of post-Brexit plans, Vote Leave allocated £100m in extra NHS funding, which fits more with our figures.

EU migration putting pressure on the NHS

  • Background: Leave campaigners have long argued that migration from the EU puts pressure on public services such as the NHS and that this will only increase once countries such as Turkey (with a population of 76 million) will join the EU.
  • Open Europe’s verdict: Since EU migrants tend to be younger than UK natives, their overall demand for healthcare is lower than that of the general population. Studies have found that when age is controlled for, there is no difference between migrants and UK natives. On average, EU migrants tend to pay more into the system than they take out. A 2014 study found that between 2000 and 2012, migrants from the EEA made a £20bn net contribution to the public finances. In contrast, UK natives were a £617bn net fiscal loss. There is, however, some evidence for pressure in specific health care sectors. For example, in 2014, 9.2% of all live births were to mothers from EU member states – even though EU migrants only make up around 5% of the UK population. There has also been a failure to invest the money migrants contribute proportionately into the services they demand in some areas. Overall, the claim that migrants are putting unsustainable pressure on the NHS at the moment is hard to stack up – although there are challenges in certain areas and it is fair to also consider the long-term impact if many of the current stock of young EU migrants settle in the UK permanently. The point about EU enlargement is, however, clear. Turkey is, at best, decades off joining the EU.

Working Time Directive

  • Background: The EU’s Working Time Directive (WTD) caps the working week at 48 hours (averaged over a ‘reference period’ of six months for junior doctors). This means less training time for junior doctors and more handovers of patients between doctors, impacting negatively on the continuity of care. The European Court of Justice (ECJ) has further complicated the situation due to its strict interpretation of the Directive – for example when it ruled that time spent on call at the hospital counts as working time for doctors, even if they are asleep.
  • Open Europe’s verdict: The WTD has undoubtedly caused problems for the NHS. Professor Norman Williams, President of the Royal College of Surgeons, has argued that the “straitjacket of the Directive and the impact that inflexibility has within healthcare have ushered in negative effects.” Although the UK would most likely maintain some restrictions on working hours after Brexit, it should be possible to better tailor such legislation to the needs of the NHS – although the British Medical Association would have to be persuaded that this would not leave doctors worse off.

Clinical Trials Directive

  • Background: The EU’s Clinical Trials Directive (CTD), which entered into force in the UK in 2004, aimed to standardise the regulations around clinical trials for all EU countries. However, the bar for conducting a trial was set far too high, massively distorting the industry. According to the European Commission, between 2007 and 2011, the number of new trials undertaken within the EU fell by 25% – while costs increased and delays for launching a clinical trial rose by 90%.
  • Open Europe’s verdict: In recognition of the manifest flaws of the CTD, the EU adopted a substantially revised Clinical Trials Regulation in 2014, which is due to enter into force soon. It is therefore too early to say whether the new rules will successfully resolve all the problems.

‘Health tourism’

  • Background: Visitors, including tourists, and short-term residents from EEA countries are entitled to free healthcare in all member states, though this cost can be reclaimed from the government of their home state. Permanent residents are obliged have purchased health insurance, or in the case of the UK, they have access to the NHS by virtue of paying tax. According to figures from the Department of Health, disclosed following a Freedom of Information (FOI) request by Vote Leave, in the financial year 2014/15, the UK spent £667.4m paying for the cost of treatment received by UK nationals across the EEA but received only £49.3m from other EEA countries for treating their citizens – a deficit of £618m.
  • Open Europe’s verdict: There is a misunderstanding of the NHS deficit – it comes from the UK failing to reclaim what it is entitled to, not from abuse of the system by nationals of other states. This is likely because access to the NHS is universal and keeping track of who uses it, and establishing whether foreign nationals are permanent residents or temporary visitors, is difficult as healthcare professionals are not keen on performing this gate-keeping function. After Brexit, the UK could charge foreign visitors upfront for NHS services, although the fact remains that logistically and culturally this would be a difficult change to implement, and it would likely result in the same applying to UK nationals in Europe.

TTIP

  • Background: It has been a long-standing claim on the far-left that TTIP, the EU-US trade deal under negotiation, will make privatisation of the NHS irreversible – as private US companies running NHS services would be entitled to take the UK Government to court and challenge any attempts at returning those services to the public sector. Another claim is that TTIP would open health services to competition from private companies more broadly. These claims have recently been endorsed by a number of Conservative MPs campaigning for Brexit.
  • Open Europe’s verdict: This is a red herring, which we have addressed in more detail here. If CETA, the recent EU-Canada agreement, is anything to go by, there could well be a specific exemption for healthcare/NHS – something the Government has already suggested it would be happy to support. In any case, EU member states have so far signed up to some 1,400 investment agreements which include ISDS – none of which have led to forced privatisation of public services. In fact, the UK has only ever once been challenged by a foreign investor while UK-based investors have used ISDS 59 times – tiny numbers given the expansive use of the system. There is not a single shred of evidence to suggest the NHS is under threat from TTIP.