British politics this week has once again been dominated by Brexit. Away from the headline news we’ve seen the debate permeating both domestic policy announcements and the largest NHS conference of the year. Four Health has pulled together four key takeaways from both inside and outside the Westminster bubble this week:
1. This year’s spending review was the first since 2002 not to cut the day-to-day budget of any department.
Chancellor Sajid Javid presented Wednesday’s one-year spending round as one which reflected the ‘end of austerity’. After nine years of shrinking the state and cutting services, the government has decided the time has now come to begin an age of renewal, with associated increases in spending.
Health (through previously committed funds), education and justice were the departments to see the biggest boosts, with multi-billion pound commitments to schools, social care, prisons and the NHS.
However, it’s worth noting that spending in most departments – while receiving a boost – still remains well below that of the 2010 budgets in real terms. The Institute for Fiscal Studies noted that once health was excluded from the equation, the additional spending will only be enough to reverse around a quarter of the cuts since 2010. While many will welcome the announcement that austerity is over – especially those likely to be campaigning for the Tories – departments and public services are still attempting to cope with the cuts imposed on them over the previous decade. It’s clear the Conservatives are attempting to get on the front foot for an upcoming election but it’s unlikely the impact of austerity will be forgotten so easily.
Furthermore, there’s considerable doubt as to whether the numbers announced by Javid are consistent with the party’s own fiscal rules as set out in its manifesto (which state that annual borrowing must remain below 2% of GDP in 2020-21 and that public debt must continue to fall as a percentage of GDP). Any economic downturn as a result of a disorderly – or even orderly Brexit – will impact the GDP forecast and mean the government will be hard pushed to deliver on a number of the pledges made this week. But as Javid himself said he’ll be reassessing the entire fiscal framework come Autumn, it looks like the Conservatives’ long-held concern for the budget deficit is over.
2. Five of the sacked Tory rebels have less rebellious voting records than the prime minister
Despite last-minute efforts of diplomacy by Number 10, 21 rebel Tory MPs lost the whip on Tuesday night. (It’s unclear whether Dominic Cummings’ berating of would-be rebel MPs as they waited to meet the PM was part of the strategy.) Further resignations from Jo Johnson and defections to the Lib Dems brings the number of MPs sitting on the Tory benches to 288.
This is the smallest number a government has had since Ramsay McDonald in the 1920s, and despite many warnings from Number 10, the move still shocked both members of the house and political commentators. The rebels themselves seem content with their decision. Nick Soames eloquently thanked “my right hon friend the PM, the leader of the house and other members of the cabinet whose serial disloyalty has been an inspiration to so many of us.”
Parliament is due to prorogue next week (date TBC) but in the meantime, Johnson will head to Balmoral today to visit the Queen and speak to farmers while opposition party leaders will be finalising their strategy ahead of Monday’s Fixed Term Parliament Act motion. Earlier this morning, opposition parties (excluding the DUP) confirmed they have all agreed to whip their parties to either abstain or vote against the motion for an early general election when it comes to the House on Monday, meaning it will not get the numbers to pass.
It’s difficult to see what Johnson will do next – given his ‘die in a ditch’ comments an extension would be politically damaging; but refusing to do so without a new Withdrawal Agreement on the table would leave him open to legal challenges and an immediate vote of no confidence. Could it be the end of the road for Boris already?
3. There are more EU nationals working in the NHS now than when the 2016 EU referendum was held
In a speech at NHS Expo, the NHS’s EU exit strategic commander Keith Willett said that his greatest fear was the knock-on effect of social care staff leaving the sector. The workforce, of which 7.5% are EU nationals (compared to 6.5% in the NHS), will be vulnerable due to the rise in zero-hour contracts and a further decline in the pound. He encouraged the NHS and social care sector to consider sharing staff, potentially sending nurses to care homes to keep them open.
Willett also added that the number of EU nationals leaving the NHS in the last two years has been ‘more than compensated by applicants from the rest of the world’.
His speech referenced the news from last week that a no-deal Brexit would ‘likely’ interrupt flu vaccine supplies at a time that the UK is facing a ‘particularly virulent’ strain of the illness. Willett countered the fears alleged by Sanofi, the Royal College of Physicians and NHS providers that there may be issues importing flu vaccines into the country after 31 October. He said that Public Health England is ‘comfortable’ with the amount of vaccines available and didn’t see any ‘significant problem[s]’ with importing vaccines after the current leave date.
For those present, the remarks seemed to slightly allay fears that the Department of Health is not ready for a no-deal. However, Willett also acknowledged that the unknown unknowns cannot be predicted, and however much preparation is done, there will undoubtedly be something that doesn’t work out. With the recent argument between Jacob Rees Mogg and NHS consultant David Nicholl fresh in everyone’s minds, the question remains what the impact of that may be.
While most agree there is a more comprehensive plan in place than before the March deadline, combining the usual winter pressures with a no-deal Brexit will compound the issues for a service that has been severely hampered by cuts over the last few years.
4. Sterling posted its biggest increase in six months on Wednesday morning…
…as parliament voted to block Johnson taking the UK out of the EU without a deal. The rise and fall of the sterling over the last few years has been intimately tied to the goings-on in parliament, with markets unsurprisingly strongly favouring avoiding a no-deal Brexit. This has been especially evident this week, with sterling reaching a five-week high by close of play on Thursday – as the PM looks increasingly boxed in to a scenario where he must avoid no-deal. The surge in strength of the pound has hit the value of multinational companies with large earnings in foreign currencies, pulling down the FTSE 100 by 50 points by mid-Thursday.
Both the domestic and foreign exchange markets are waiting on further indications from Johnson as to his next move – but analysts are warning that more Brexit delays will undoubtedly have a significant impact on the UK economy, which is already showing strain from the global slowdown.
In encouraging news for the markets, Michael Gove confirmed in the Exiting the European Union select committee on Thursday that the government would abide by any no-deal legislation passed in the Lords, allaying fears that Johnson would defy the new law. In light of this, some investors have predicted that delaying Brexit could lead to the pound reaching $1.30 or even higher, positive news for those of us planning a holiday later this year!