A post-Brexit windfall predicted by pro-Leave economists should be used to boost the NHS by an extra £350 million a week, prominent Tory MP Jacob Rees-Mogg has said.
Launching a report by the Economists for Free Trade (EFT) group, Mr Rees-Mogg said he had not previously supported the health service pledge made by Leave campaigners during the referendum, but thought it was now essential to honour it.
With the EFT study predicting a £135 billion boost for the UK after withdrawal, the Tory MP called for a radical reduction in import tariffs to make basic items cheaper.
He said: “What I’m suggesting is that we have more money for the NHS, and that we have cheaper prices for food, clothing and footwear for the poorest in society.
“Although I did not want the £350 million figure used, it was used and the electors believe a promise was made.”
The EFT report predicted Brexit would be “overwhelmingly positive” for the British economy provided the Government adopts the right policies.
The findings are sharply at odds with most mainstream economists who have warned the UK faces lower growth and more pressure on the public finances as a result of the vote to leave.
Mr Rees-Mogg said official forecasts were based on “false assumptions” of the Treasury and that the outlook for the public finances is “much better” than the Office for Budget Responsibility (OBR) is predicting.
“It (the OBR) does its work worthily and reputably, but on the basis of false assumptions given to it by the Treasury.”
Mr Rees-Mogg defended the Department for International Trade (DIT) for tweeting a link to a news report about the EFT study, which contained his comments on “false assumptions”, after Labour MP Chuka Umunna criticised the move.
The Tory MP said the EFT was helping the Treasury as Chancellor Philip Hammond had asked for ideas before next week’s Budget.
He told the Press Association: “It’s a suggestion being made and the Chancellor asked for suggestions. I think it’s a really bizarre complaint to make.”
(PA Graphics)
The tweet has been deleted from the DIT account.
Mr Rees-Mogg said Britain should refuse to make any payments to the EU after Brexit if it does not secure a trade deal.
The EFT – headed by Professor Patrick Minford – said the priority for the Government should be to bring down trade barriers with the rest of the world once Britain has left the EU, while reducing the burden of regulation and taxation on firms and individuals.
It argues a “dynamic stimulus from classic free trade” combined with continued restraint in public spending could provide “post-Brexit fiscal freedom” worth £135 billion between 2020 and 2025, with a further £40 billion a year from 2025 – including £10 billion a year saved by no longer having to pay into EU budgets.
Prof Minford dismissed forecasts of economic decline after Brexit as a “conspiracy of doom”.