The path to Brexit

With the formal triggering of Article 50, the UK has chosen to set off on a never before trodden path out of the EU. Exactly where we end up is now a subject for negotiation between the European Commission, the EU member states, the British Government and factions within Parliament and Whitehall. But we can already make out six turning points which will determine what Brexit means for health and social care.

April 2017: The EU sets out its stall

Exactly one month after the triggering of Article 50, on April 29, the European Council – comprising EU heads of state – will meet to set out guidelines for negotiations. In parallel, the European Parliament will pass a resolution giving their views. These will inform an official mandate given to head negotiator Michel Barnier.

The EU wants the exit costs for Brexit and the rights of European nationals in the UK to be secured first: as one official told Politico, “to get to the terms of a new relationship you have to go through an orderly divorce”. The UK, on the other hand, wants everything to be considered at once, hoping to use our contribution to the EU as leverage in getting a good deal. For the NHS and social care, the EU’s planned agenda has its advantages – potentially enabling early clarity that vital EU workers will be allowed to stay.

May 2017: The Great Repeal Bill

The Queen’s Speech in May will set out the Great Repeal Bill. This will bring existing EU law onto the British statute books, and set out the means by which it can be changed. Reports suggest the Government intends to put in a provision for changes to be fast-tracked through Parliament through statutory orders, known as “Henry VIII” powers for the sweeping authority they give ministers. This could open the way for quick changes to contentious NHS regulations like the Working Time Directive and procurement law after Brexit, but at the cost of limited scrutiny. Some MPs and peers are preparing to resist a provision they see as diminishing the powers of Parliament.

Summer 2017: settling the accounts

Whether or not the EU succeeds in separating the issues, the first phase of negotiations is expected to look at the bill Britain owes the EU for outstanding liabilities; the status of existing migrants on either side; and the issue of the border in Northern Ireland.

The health service has become dependent on importing nursing staff trained in Europe in recent years, and social care too has been pulling in around 10,000 new workers from the EU each year. The sector needs an early deal making it clear existing staff can stay – and might welcome the possibility that freedom of movement with permanent rights will continue during negotiations. Meanwhile, given their reliance on squeezed public funding, health and social care stand to benefit from a relatively low exit bill – as long as it is not at the cost of an overall deal which harms the economy.

Autumn 2017: getting down to business

Full negotiations will begin by the autumn of 2017. The Institute for Government expects them to proceed topic by topic, getting easier issues out of the way first.

The issue of Britain’s ongoing contributions to the European budget will be crucial. Given the rhetoric of the Leave campaign, the NHS might quite reasonably hope for a slice of any money that can be redirected – and might need it to help handle the impact on staffing and medicine supplies. But Chatham House believes a good deal might include the UK continuing to make sizeable payments in order to stay in scientific and educational programmes, something that might be necessary to maintain a healthy medical science sector. It may also keep paying into funds for poorer states as part of the price of getting a good deal.

Assuming that negotiations move on to consider at least a temporary trade deal, they may also determine which regulations are stuck in place after Brexit. Retaining relatively frictionless trade with the EU is likely to require keeping regulations in many areas aligned. That might box Britain in when it comes to changing rules on working hours, clinical trials, procurement and many other areas. There is likely to be an ongoing element of negotiation about how different UK rules can be, and whether the UK can exert any influence on shared rules having left the club.

Winter of 2018 to 2019: yay or nay?

Around the beginning of 2019 we come to the crunch: will the EU and the House of Commons be willing to approve what comes out of negotiations?

Ratification by the EU will be no easy feat. It requires at least the approval of a double supermajority of countries by number and by population – if not unanimous support. But before we even get there, the deal will have to clear the British Parliament.

Labour will apply six tests to any Brexit deal. These set the high standard that all the benefits of the single market will be kept. Some commentators believe this will be difficult to meet: the rest of the EU will not want to give Britain a pick-your-own deal where we keep all the elements of membership we like and abandon those we don’t.

Two blocks of Conservative MPs may hold the Government’s majority in their hands. Staunch Brexit backers like Steve Baker and Michael Gove are linked to the European Research Group and the pressure organisation “Change Britain”. Mindful of the rewards they reaped campaigning on NHS funding during the referendum, they continue to emphasise freeing up money for the health service during Britain’s exit: perhaps a sizeable £100 million a week, as the small print said, if not quite the fabled £350 million. The risk may be that they will prefer Britain to crash out with no deal rather than take the deal on the table. This could lead to the scenario laid out by the Chancellor of Britain having to compete on low taxes and lax regulation – difficult to reconcile with a publicly-funded health care system.

Another more pro-EU group wants access to the single market put first – at the cost of less immigration restriction and a bigger contribution to the EU budget. This would secure stable regulation, access to vital workers and the supply of medicines, but might also mean less scope for a Brexit dividend to the NHS, and less room to tweak regulations.

After 2019: what comes after freedom of movement?

Assuming the Government keeps their pledge to “ensure we can control immigration to Britain from Europe”, after Brexit a new system will have to be ready to kick in. Significantly, Labour too now seem to accept the end of freedom of movement as a general principle.

Options might include a diluted version of free movement of labour, perhaps only for migrants with secure jobs; a work permit system; or a complex points-based system with overall caps, as we currently have for non-EU migrants. For the NHS, it will be crucial to make the case for the shortage of nurses to be recognised. Social care faces an even more difficult task. With turnover high, providers in difficult financial straits and the National Living Wage potentially eroding the small premium now paid over other sectors, it needs migrant labour. Like the NHS, it has become increasingly dependent on staff from the EU. Yet given the lack of training and qualifications for many staff, they may struggle to clear the hurdles of a tighter system.

A long road ahead

The voice of the health and social care system and the people who need it must be heard at each of these key decision points. We need to support the Government and the European Commission to find a way through very complicated and pressurised negotiations to a deal that works. The Nuffield Trust plans to play an ongoing role in bringing people together and informing the debate – and if you would like to help us, please get in touch.

Want to learn more? Please see our full collection of resources on Brexit and the NHS - which will be updated over the coming months.