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So, there's been some disagreement recently on a proposed increase in funding for the British National Health Service. The government has declared that this money would come from a "Brexit dividend" before later admitting that most of it would come from an increase in taxes.

This is similar in content, but not in scale, to the infamous bus which declared that:

"We send the EU £350 million a week, let's fund our NHS instead."

There seems to be a lot of mixed information around this issue lately so needless to say I'm confused and uncertain.

  • What, exactly, is a "Brexit dividend"?
  • What is likely to define the size of it?
  • Isn't there a so-called "divorce bill" which will mean Brexit is a net loss to the country?
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    It’s the same as the bus thing. – chirlu Jun 21 '18 at 9:25
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    @chirlu or "we (the government) don't think we can win elections again if we don't follow through on the implied promise on that bus" – Caleth Jun 21 '18 at 11:21
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    The 350 million Pounds figure was a (blatant) lie. Sorry for the source in German. In fact, as it is the case with all propaganda, there is a grain of truth hidden. In order to reach the 350 m figure, you need to ignore all the money the UK receives from the EU. – Dohn Joe Jun 21 '18 at 12:01
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    @Dohn Joe, it's not even that, it's simply that £350m is not sent: the so-called rebate is applied before any money is 'sent'. The higher figure was deliberately chosen to cause controversy to keep the idea that we send the EU a lot of money in people's minds. – Lag Jun 22 '18 at 8:29
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The "Brexit Dividend" is the money the UK will save from not being part of the EU. As per the question, it is exactly the same as the £350m a week claim, in that it represents money the UK used to pass to the EU and will no longer have to. £350m * 52 = £18.2bn so the numbers are pretty similar.

The problem, as pointed out about the red bus, is that it doesn't exist. The numbers are wrong to start with, not taking into account rebates or a host of "shared services" such as Euratom, European arrest warrant, lower customs requirements or an endless list of other things.

The Fact Check here hedges a little. In that if it does exist, no one can say how big it is. It would all depend on post-brexit agreements around liabilities payments and market access etc.

Some sources go a bit further, The Financial Times for example calling it a myth. The BBC, much like Fact Check says from a pure accounting point of view there may be a Brexit Dividend, but that it won't be enough to cover the £20bn pledged and that accounting benefit ignores any economic impact (i.e. lower tax returns if exporters lose access to EU markets) of Brexit. It's also not clear if the beneficial figure in the BBC article include the cost of replicating any European Agencies that the UK leaves (like Euratom).

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    While the case can be made that the Brexit Dividend is small, I think it is a massive stretch to say that it doesn't actually exist. It seems nigh on impossible that all 28 countries that pay into the pot all receive the exact same amount back. In fact, a large principle of the EU is to redistribute money from the richer countries to the poorer ones. If nothing else, the money that was previously spent paying for MEP salaries is the Brexit Dividend. – Matt Jun 21 '18 at 16:52
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    @Matt The UK is or was a net contributor to the EU. Which is where what the BBC article calls the Accounting Dividend comes from. Unfortunately given the other associated costs of leaving from the liabilities payment to agency costs and so on nil is much more likely to be accurate than £20bn. It is certainly a more honest estimate. But you can certainly add the £8m per annum UK MEP salary bill to the dividend if you wish. I make that around 0.04% of the promised sum. I will leave you to find the rest. – Jontia Jun 21 '18 at 17:31
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    @Matt If you save 100 units of money while having to spend 150 units of money to replicate all the services you lost access to are those 100 still a dividend? – Voo Jun 22 '18 at 8:32
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    @Matt and others: a simple analogy for the “net contributor” argument. At work, there’s a coffee club; we each pay in £10 per week, and that buys enough coffee+milk for us each to have 2 coffees a day. In fact I only have one coffee a day, so I’m subsidising the cost of other members. But if I leave the club and buy my coffee from the café next door at £3 per coffee, I’d end up spending £15 a week! So within the club, I’m a net contributor; but if I leave the club, I don’t get any “dividend” — I lose money instead. – Peter LeFanu Lumsdaine Jun 22 '18 at 9:54
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    @Matt: Sure! I’m not saying there may not be other advantages, like choosing a different drink. I just meant to show how one can be a net contributor to a club, and yet still leaving the club can cost rather than gain you money, once you allow for replacing the benefits you were getting from it (whether with the same services or an alternative). – Peter LeFanu Lumsdaine Jun 22 '18 at 10:15

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