Monday 22 July 2019
[Sir Roger Gale in the Chair]
NHS and Future Trade Deals
I beg to move,
That this House has considered e-petition 242300 relating to future trade deals and the National Health Service.
It is a pleasure to speak under your chairmanship, Sir Roger. I thank Mr Byron Davis for starting the petition, which to date has attracted 166,998 signatures, including more than 200 from my constituency. The petition is entitled, “Don’t put our NHS up for negotiation”, and it asks the Government to,
“Please introduce concrete safeguards that will make sure our NHS is kept out of any future trade deals after Brexit.”
It goes on to say:
“Words aren’t enough—we want watertight protections that will keep our NHS off the negotiating table. Why is this important? When done well, trade deals can be good for the UK. They can help create jobs and build opportunities… But this plan would put our health service at risk.”
The Government responded on 17 June 2019:
“The Government has been clear: the NHS is not, and never will be, for sale to the private sector. The Government will ensure no trade agreements will ever be able to alter this fundamental fact.”
The Department for International Trade went on to provide a detailed 491-word response to the petition, which can be found on the Petitions Committee website. It includes commitments such as:
“the NHS is not, and never will be, for sale to the private sector, whether overseas or domestic.”
This is a crucial debate. The Government have already awarded £9 billion-worth of contracts. Section 75 of the Health and Social Care Act 2012 is the biggest threat to the NHS, as it opens up the whole NHS to the market. Does my hon. Friend agree that the Government must urgently repeal section 75 to safeguard our NHS?
My hon. Friend makes a powerful point, and I completely agree that the Government need to pay urgent to attention to that.
The Government’s response continued:
“the Government will continue to ensure that decisions on how to run public services are made by UK Governments, including the Devolved Administrations, and not our trade partners.”
It also said:
“Trade agreements do not prevent governments from regulating as they see fit, and they also do not require governments to privatise any services… The Government will ensure that nothing in our future trade agreements dilutes the powers of UK regulators to maintain the NHS’s position as the best health service in the world.”
However, as the petitioner says, words are not enough. By tomorrow, we will have a new Prime Minister; by the end of the week, we will probably have a new Cabinet, a new Secretary of State for Health and Social Care and possibly a new Government position on these matters. Although we hear time and again, from across the Benches, support for the great institution that is the national health service and for its abiding principle of being free at the point of need, those are only words without deeds.
I congratulate my hon. Friend on opening this debate. I agree with my hon. Friend the Member for York Central (Rachael Maskell) that the Government should repeal section 75 as a matter of urgency, because it if they do not, they will throw the national health service to the dogs. Nobody wants that to happen, particularly with predators such as Donald Trump’s Administration. Does my hon. Friend agree?
I agree that it is truly a case of words, not deeds.
Although people may find it reassuring to hear the current Secretary of State for Health and Social Care say that the NHS is not for sale and will not be on the table in any future trade talks, we cannot take his word for granted. Equally, we cannot ignore the remarks to which he was responding. They were made by the US ambassador to Britain, Woody Johnson, in an interview with the BBC’s Andrew Marr. In that interview, he confirmed that in a trade deal with the United States, the whole economy—including the NHS—would be on the table. The shadow Health Secretary described those comments as “terrifying.” He went on to say:
“The ambassador’s comments…show that a real consequence of a no-deal Brexit, followed by a trade deal with Trump, will be our NHS up for sale.”
Others such as Nigel Farage, the leader of the Brexit party, have advocated a move away from state-funded healthcare to a more Americanised model. In 2014, he told UK Independence party supporters:
“I think we are going to have to think about healthcare very, very differently. I think we are going to have to move to an insurance-based system of healthcare.”
Whatever opinions, promises or pledges are out there, it is clear that if the NHS is not for sale, it must be protected and future-proofed against the outcomes of any trade agreements with the USA and any other nation state. That, simply, is what the petition asks for.
I support my hon. Friend’s comments about the petition. I am pleased that my constituency was in the top 10 for the highest number for signatures.
My hon. Friend is right to highlight the Government’s commitments. Indeed, the October 2017 White Paper on future trade arrangements said that the protections of EU free trade agreements would continue to apply in future trade agreements. Does he agree that we need to give some strength to those commitments and some assurance to the petitioners, along the lines of what the British Medical Association has requested, and that the Government and the Minister should thereby respond to the debate by committing to put into primary legislation a commitment that economic benefits cannot take precedence over public health policy in future trade agreements?
My hon. Friend makes a powerful point with which I agree. The voice of the BMA and other professional bodies is most important and must be heard.
The petition asks for the provision of “concrete safeguards” to keep NHS services out of any future trade deals. That is nothing new; that fight has been ongoing for years, even within the EU. To this very day, those British Members of the European Parliament who care about our NHS are battling to keep NHS services out of the developing Transatlantic Trade and Investment Partnership between the EU and the USA.
The Government said in response to the petition,
“The UK’s public services are protected by specific exceptions and reservations in EU Free Trade Agreements. As we leave the EU, the UK will continue to ensure that rigorous protections are included in all trade agreements it is party to”,
but that can be only an aspiration. It is not a cast-iron guarantee that the transfer of any EU regulations into UK law will specifically protect the NHS from future trade agreements. Just as the EU found with TTIP, we will need to further regulate for the exclusion of NHS services from trade agreements. Action, not words, needs to be the order of the day. Given that the Government refused in 2016 to exclude the NHS from the TTIP negotiations, that may well turn out to be a tall order.
American healthcare providers can already compete to deliver services in the UK. However, the threat to the NHS of a US trade deal would be through clauses that lock in existing levels of privatisation and prevent future Governments from rolling them back.
It is clear that the NHS is already for sale. Only recently, the urgent care centre in my constituency was put out to tender. It was recommended that a private, for-profit company should run that facility, which was previously an NHS service. As has been stated, a record £9 billion of contracts have been awarded to the private sector. Does my hon. Friend agree that the form of trade deal we are talking about would lead to privatisation with bells on?
As always, my hon. Friend makes a powerful point. Let us not forget the millions spent compensating private companies that lose contracts and take the Government to court.
Trade deals are not only dangerous for the future of the NHS, as they would entrench privatisation, but undermine our democracy, as future Governments would be shackled by their binding provisions. That is why some say the only way to fully protect our NHS from trade deals is to fully exclude it from them.
Does my hon. Friend agree that the riskiest point of entry for privatisation in our NHS is big pharma? Clearly, big pharma will seek to run other services in our NHS. It is essential that any trade deal takes seriously the threat big pharma poses to our NHS, given the service’s extensive drugs bill.
Again, I agree with my hon. Friend and bow to her knowledge. We all know that pharmaceuticals is one of the major gateways to the potential privatisation of NHS services. I say again that the only way to fully protect our NHS from trade deals is to fully exclude it from them. As far as I and, I am sure, the petitioners are concerned, that is precisely what we should do.
Alex Azar, the US Health and Human Services Secretary, has said that Washington will use its muscle to push up drug prices abroad in order to lower the costs paid by patients in the United States. He said on CNBC:
“On the foreign side, we need to, through our trade negotiations and agreements, pressure them.”
Does my hon. Friend agree that we would see prices rise in our NHS?
It seems to me that we are debating that old chestnut, “public good, private bad.” We must take into consideration the fact that 7.6% of all NHS spending goes on what we might call private-type enterprises. They are not all for-profit enterprises; many are in the not-for-profit sector, such as community interest companies and charities. This issue is often portrayed as uniquely Conservative, with the suggestion that we want somehow to privatise the NHS, but all the facts, including the additional expenditure on the NHS in the past few years, demonstrate completely the opposite. In 2010, when the Labour Government left office, 4.4% of NHS spending went on the alternative, non-public sector. That figure is now 7.6%. The rate of growth has been exactly the same since 2010 as it was under the Labour Government.
I am sure that what underlies the petition is the petitioners’ fear of what might happen in future trade deals. One deal did not come to pass—the old TTIP, which the rest of Europe has decided not to pursue. I for one would very much welcome a future US trade deal, and I am sure we will be in a better place to negotiate one, given the rather sluggish way the EU seems to approach international trade deals. I pay tribute to the hon. Member for Hartlepool (Mike Hill) for acknowledging that international trade deals generally are for the good; they expand investment and much more besides in terms of international relations. At the time of TTIP, the same fears emerged, with people asking, “Will our NHS be up for sale?” Love her or loathe her, Cecilia Malmström, the EU’s then Trade Commissioner, made it very clear that national health services were not on the agenda in the UK or anywhere else in the EU.
We saw something similar with the comprehensive economic and trade agreement with Canada, which is deemed to be what we might call best in class. It is seen as a good free trade arrangement, which, obviously, I would like the UK to have with the EU in the future. CETA is an advanced trade deal that allows for the sort of good things that happy, friendly trading nations can achieve, such as reciprocation on many qualifications, but that deal has always contained a specific exemption for Government-procured public services
“supplied in the exercise of governmental authority.”
I can only envisage that we would do the same in any trade deals the UK might make as an independent country. That is in our hands. That is for this place to decide.
This country has always been open for business. I do not know the figures, but we have very few restrictions on foreign ownership of our companies. I do not know whether I use them myself, but frankly, I do not much care if an outsourced Indonesian company provides blood testing. I want the service to be provided at the best possible price and the best quality to the taxpayer. I am sure there are many services paid for by the NHS that are owned by foreign companies—American, French, German, Swiss, Swedish and so on. I really do not care too much, because what is important about the NHS is that it is free at the point of delivery. I am sure that in very many hospitals we enjoy equipment that is made overseas. We have the World Trade Organisation pharmaceutical tariff elimination agreement, so there are very few tariffs between any of the major countries on pharmaceutical products. We should take a wider view in these discussions than just, “public good, private bad”. We need some common sense.
Remarkably—this needs to be put on the table—many Opposition Members seem to want a customs union that goes on forever, and perhaps single market rules that go on forever. However, we would not have a seat at the table as the EU negotiated future trade deals around the world. We would be caught on the coat-tails of a customs union, just as Turkey has to suffer. We could find our NHS on the table in trade negotiations between the EU and the rest of the world on deals that, as customs union members, we would just have to follow. We would be completely powerless. To me, that would be the worst of all worlds. At the moment, our Parliament—Opposition Members and Government Members—will be in control of what is on offer.
To date, obviously none, because we are not able to, but many roll-over agreements are coming to fruition. The biggest, which the Department for International Trade concluded just a few weeks ago, is with Switzerland, which is a major provider of both pharmaceuticals and high-level industrial equipment, which is often used in manufacturing and in our hospitals.
Agreements are rolling over gradually, but I want us to be more ambitious. I want us to have international trade deals that open up greater transparency and friendship and boost trade. If that means we start having zero tariffs on fantastic products from Japan or elsewhere, what is the problem with that? I want the health service in this country to be the best in class and free at the point of delivery. If UK companies are able to provide services internationally, that has to be a good thing too. But the decision on procurement and whether to open up the NHS to competition from America, Australia or anywhere else should be taken in this place. We should not be caught on the coat-tails of perpetual customs union membership, which would give us no decision-making power whatsoever. In the future, this should be a decision for us—for this Parliament, in consultation with the public and indeed the very good people who put their name to the petition.
It is a pleasure to serve under your chairmanship, Sir Roger. I thank my hon. Friend the Member for Hartlepool (Mike Hill) for introducing the debate and setting out the petitioners’ concerns about this important issue.
I start by picking up the comments made by the hon. Member for South Thanet (Craig Mackinlay) that what we want is a matter for this House to discuss. It seems to me that this House, directed by my constituents and many others, is saying clearly that we do not want our NHS opened up to trade agreements and we do not want it exposed to international competition. That comes across very clearly to me as I speak to my constituents, whatever their views on Brexit. Everyone cares passionately about the NHS, and in the north-east we care about it especially. We have good services that we treasure, so my constituents are saying, “This is not for sale. It is not negotiable.” That is the setting.
As my hon. Friend said, words here are not enough. Earlier this year I took part in a debate on the Trade Bill during which we heard frequently that constituents were telling their Members of Parliament that they did not want the NHS to be opened up to competition or part of a negotiation. That message came through loud and clear. I am glad that people have been making that statement and making that argument time and again. We need to keep reinforcing the fact that when we are talking about trade deals, that is something “up with which we shall not put”. As I said, people feel strongly about it. The Trade Bill debate went into a great deal of detail, with the NHS being one of the recurring issues. The Secretary of State and the Trade Ministers who presented and wound up the debate were keen to say that the NHS was to be protected. It is excluded from EU agreements on services, and we would want to replicate that. However, whatever happens after Brexit, we will have to negotiate new trade agreements, with all the clauses and requirements involved, which requires a hell of a lot of detail. In any negotiation, there are at least two parties—often more—with their red lines. We have ours—the NHS must be one of them—and other parties have theirs. We have differing views and different agendas, but I think the petitioners are telling us that we really must stick to those red lines. On President Trump’s visit, he made a statement about the NHS being on the table. Did he take it off the table again? We are clear that it is not on the table. It must not be on the table.
As my hon. Friend and the petitioners have said, just stating “the NHS is not for sale” is not the answer; fine words butter no parsnips. In all agreements, we need lots of detail clearly setting out how we will protect our NHS in many different circumstances. For example, there are currently charges in dentistry. How will we ensure that NHS dentistry is protected if there is already external private sector charging? Is it for profit or not for profit? We must also ensure that we can protect the existing overseas involvement in our NHS. There is a huge amount of detail. I have no doubt that a team of negotiators is looking at that, but that is the kind of fine detail that we cannot always get into when we discuss these matters in the House. It is crucial that we do get into that detail.
As we have heard, 7.3% of NHS expenditure is already spent on contracting. Many of us think that is far too much and that we should review it to ensure that we retain NHS services in-house, not because of the simplistic argument of “public good, private bad” but because we have seen too many failures of services. Yes, there are examples of good services, but plenty are not great. People will want to look at that angle. We need much more detail, and we need a strong debate and measures to protect our NHS. We need the headline commitments, which must be not just about having an NHS free at the point of delivery but about looking after the public and preserving our services in-house in the UK. In the Trade Bill debates there was lots of talk about scrutiny of trade deals. It is imperative that we have an open and transparent way of scrutinising any proposals.
My hon. Friend the Member for York Central (Rachael Maskell) talked about concerns about the impact on drug budgets and big pharma, as well as the fear that this may be seen as a ripe opportunity for prices to increase. I have just come from the main Chamber, where we were talking about access to medicine and treatments for Batten disease. Cost is one pressure that, sadly, can result in many people with rarer diseases being unable to get access to medicines and treatments that would improve their lives and, in some cases, extend or save them. There is a real concern that we may see drug prices increase in the future.
The petitioners have a quite simple message, but it is one that people are hearing loud and clear and want us to reiterate. We must protect our NHS in the context of any trade agreements. We do not want our NHS to be privatised or outsourced—even by accident. We care about our NHS and we must preserve it. It is one of our great features. I thank the petitioners for drawing our attention to this issue.
It is great to serve under your chairmanship, Sir Roger. I thank my hon. Friend the Member for Hartlepool (Mike Hill) for securing this important debate. For people in my constituency, this issue is particularly timely. Last month, reports emerged that the Warrington and Halton Hospitals NHS Foundation Trust had begun to advertise a price list for operations that were previously free on the NHS. It offered 71 costly private operations, including vital procedures such as hip and knee replacements at over £18,000, cataracts at £2,368 and hernias at just under £8,000.
The fees were introduced as a result of Tory cuts, which are forcing the NHS to ration services that were once free at the point of use. The Opposition have consistently warned that such measures are leading to the gradual privatisation of NHS services, with vulnerable patients potentially forced to pay extortionate fees to cover medical costs. The pricing list was the first example of an NHS trust openly advertising private medical services in such a way. I was shocked to see the privatisation of our NHS advertised brazenly to my constituents, with the sick and vulnerable exploited for profit. It is an affront to the founding principles of our national health service.
I am pleased that, as a result of pressure from me, my colleagues and local campaign groups, the trust decided to pause and review the scheme. However, this is just a temporary victory, and there is no time for complacency. As we consider the bigger picture of our future trading relationships, there are great battles to be fought to defend our NHS from private interests.
In the same month that the price list was published, Donald Trump was invited to the UK at the behest of the Tory Government. Speaking at a joint press conference with the Prime Minister, he said the national health service would form part of negotiations over a possible future trade deal between the UK and the United States. To use his exact words:
“When you’re dealing in trade, everything is on the table.”
What an appalling thought—that our NHS is reduced to a mere bargaining chip in negotiations.
The Tory leadership candidates are too cowardly to stand up to Donald Trump. Last week, they refused to call his vile, bigoted attack on Ilhan Omar what it was: racism. That is not good enough. If the Tories will not stand up to Trump’s racism, how can they be expected to stand up to him in trade negotiations? How can they be expected to stand up for the NHS? They cannot.
After he founded the NHS, Nye Bevan said of Great Britain:
“We now have the moral leadership of the world”.
Today it does not feel like this country has any moral leadership at all. As always, we cannot trust the Tories with our NHS.
It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for Hartlepool (Mike Hill) for introducing the debate and speaking so well on behalf of the petitioners.
Let me start with a reference to Brexit, because I suspect that many of the concerns about trade deals, which may bring the NHS into play, will be driven by the loss of trade associated with Brexit. Let us remind ourselves of what the UK Government’s long-term economic analysis said. Under all the versions of Brexit that they analysed—the White Paper, the European economic area-type agreement, an average free trade agreement, and no deal—trade and GDP would be lower at the end of the forecast period than they otherwise would have been. The analysis went on to say that, under all those options—with the exception of the EEA, which does not apply—the situation would be worse if we had net zero migration from EEA workers. So before I come on to talk about trade, it is worth pointing out that we face a challenge relating to the retention and recruitment of staff if whatever Brexit we end up with drives a hideous and illogical end to the free movement of people.
The National Institute of Economic and Social Research’s analysis suggests that, depending on the type of Brexit, we could see a 22% to 30% fall in total trade. It went on to suggest that a free trade agreement with Brazil, Russia, India, China and all the major English-speaking economies, including the USA, would result in an approximately 6% uplift. I suspect that, if Brexit happens, Government thinking will end up being that, in order to make up some of the losses, we will have to have a quick win—a quick gain—probably with the USA. It is hard to see, for a variety of reasons, why the NHS would not be included in that.
Does the hon. Gentleman agree that it is very concerning that, when the President was here on his state visit, he seemed to say that that was the No. 1 priority, despite the fact that our Prime Minister tried to deny that on the day?
It was concerning that his initial response was, “Yeah, sure, the NHS—everything is on the table.” It was clawed back slightly the next day, but one wonders whether he understood what he said on the first day, or even what he said on the second day. The concerns out there among the public are very real, for the reasons I have set out. If we need to make up trade gains from the losses that almost every single forecast suggests we will have, it is hard to see how the NHS, or broader aspects of health, might not be included in some kind of trade deal.
The starting point for me is that we should not be contemplating exposing the NHS through trade deals, not least because the EU has made more trade deals with third countries than any other bloc, which we benefit from, and it has done so while protecting public services. It makes little or no sense to throw that away. The EU has protected public services such as the NHS in all trade negotiations. It has shown itself to be principled in its approach. Not only would we potentially lose access to those markets, but we do not have the means to replicate the agreements we already benefit from. The hon. Member for South Thanet (Craig Mackinlay) mentioned the Swiss deal, but it was of course not rolled over in its entirety. Indeed, a number of the reports that came out at the time said:
“The deal risks new limits on the export of agricultural products from the UK to Switzerland—for example, a possible ban on organic products…Switzerland may no longer recognise UK businesses as ‘authorised economic operators’, eligible for lighter controls at the Swiss border.”
At the same time, a second roll-over deal was announced—the Norwegian one—but while it included zero duty for industrial goods, it did not include services. It was described in the Norwegian press as a “crisis agreement”, and it did not cover technical regulations and rules for trade in food, animals or plants.
I mention those two because they highlight the UK’s weakness in the Brexit process. If we are not able to roll over in full with friendly countries with which we have long trading relationships, how on earth are the public expected to believe that we will be able to cut a deal with the USA to make up some of the losses from Brexit without having to sacrifice the NHS? On my last visit to the United States, I was told time after time that the UK will be required to put everything on the table, and the US will be required to put nothing on the table.
The hon. Gentleman is being very generous in giving way. Does he agree that one sector for which there will be implications is research and innovation? Is he as concerned as me about the prospect that a lot of our universities and the collaborations they do, which are in effect services, will be at risk? It will take an awful long time and an awful lot of effort to replicate them in a US trade deal.
I am concerned about that. I am concerned that, even now, we are seeing relationships, partnerships and academic work being restricted, and doubt being cast on their continuation, for those very reasons. It would be tragic if health improvement work was not done or was lost from the excellent universities that undertake those studies.
The weaknesses that I speak about are where many of the concerns about the NHS lie, particularly in relation to a US-UK deal. They drive the impression, rightly or wrongly, that the UK will be involved in some kind of investor-state dispute settlement mechanism, and that Governments or other public bodies could be sued simply for protecting our health service.
I will give three examples to demonstrate why there are real concerns and why the public are extremely anxious. The first took place between 1995 and 1997. The Canadian Government banned the export of polychlorinated biphenyl waste to comply with obligations under the Basel convention, to which the US was not a party. The waste treatment company SD Myers then sued the Canadian Government for £20 million in net damages under chapter 11 of the North American free trade agreement—an ISDS-type arbitration scheme. That claim was upheld under NAFTA, even though Canada had taken action to remain in compliance with an international treaty.
In the second case, in 1997, the Canadian Parliament again banned the import and transport of the petrol additive methylcyclopentadienyl manganese tricarbonyl over concerns that it caused a significant public health risk. Ethyl Corporation, the manufacturer of the additive, sued the Canadian Government, again under NAFTA chapter 11, for $251 million to cover losses resulting from what it called the “expropriation” of its plant and to its “good reputation”. That action was upheld by the Canadian dispute settlement panel. The Canadian Government repealed the ban and paid Ethyl Corporation $50 million in compensation.
Cases that involve toxic polychlorinated biphenyl waste and a petrol additive that was deemed to have a public health impact were overturned. It is quite wrong for any corporation to be able to sue a Government simply for taking steps to protect the wellbeing of their citizens. I use those two examples on purpose; they may not have a direct clinical NHS procurement characteristic, but no one could doubt they were public health measures that were overturned as a result of a trade deal that allowed private investors to do certain things.
My final example is more local. Some time ago in Scotland, we had an increase in the prevalence of hospital-acquired infection. One of the actions the Scottish Government took was to remove private cleaners and return cleaning to NHS staff. Lo and behold, the incidence of hospital-acquired infection reduced dramatically. It does not take an enormous leap of the imagination for non-core work, such as cleaning, to be put out for competition. Had that been an international company, utilising an ISDS-type arbitration scheme, one can easily see how it may have sued the Scottish Government to win back that work and continue to make profit, irrespective of the health consequences.
I have heard what the petitioners have said, and I welcome the commitments made so far that the NHS will not be included in any future trade deal. However, it would be foolish not to recognise the concerns the public have or that fraying around the edges, when it comes to what appears to be non-core, non-clinical work, can still lead to the kind of problems the petitioners are concerned about. I await with interest what the Minister says. I congratulate those who signed the petition and brought this important matter before us today.
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Hartlepool (Mike Hill) on opening this important debate and speaking so eloquently on behalf of the Petitions Committee. I thank hon. Members who contributed to the debate, including my hon. Friends the Members for York Central (Rachael Maskell), for Coventry South (Mr Cunningham), for Hornsey and Wood Green (Catherine West), for Sheffield Central (Paul Blomfield), for Weaver Vale (Mike Amesbury), for Warwick and Leamington (Matt Western), for Blaydon (Liz Twist) and for Warrington South (Faisal Rashid), as well as the hon. Member for South Thanet (Craig Mackinlay).
The petition calls on the Government to categorically rule out including the NHS in future trade deals. It has been signed by more than 166,000 people, while another petition organised by Keep Our NHS Public has been signed by more than half a million people. Last week the Government published a summary of responses to their consultation on trade negotiations with the US, Australia and New Zealand, as well as potential accession to the comprehensive and progressive agreement for trans-Pacific partnership. Over 600,000 people responded, with an overwhelming number of those responses calling explicitly for protections for the NHS in trade deals.
The British public are absolutely clear: they do not want the NHS to be bargained away as part of a trade deal, they do not want companies to have the right to sue our Government for decisions taken in the interests of public health, and they do not want drug prices to be pushed up by American pharmaceutical giants. We on the Labour Benches firmly agree with that. We are extremely proud of the Labour-created NHS and we know how important it is to the people of the United Kingdom. We will always defend the principles of universality and the NHS being free at the point of use.
A number of hon. Members, including my hon. Friends the Members for Hartlepool, for Coventry South, for Blaydon, for Warrington South and for Hornsey and Wood Green, mentioned the comment made by the President of the United States when he said the NHS would be “on the table” in any US-UK trade deal. A few hours later, perhaps after some encouragement from the current Prime Minister, he appeared to row back somewhat. On Wednesday we are entering a brave new world, with a new Prime Minister. The person almost certain to be that new Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), has repeatedly stated that he regards concluding a quick trade deal with the US as an absolute priority. So this is a timely debate and one that will no doubt continue in the coming months and years.
My hon. Friend the Member for Blaydon made the point that the NHS cannot be part of trade deal; that is her red line. My hon. Friend the Member for Warrington South spoke about our moral duty. In my remaining time, I want to mention a number of areas where aspects of trade deals could threaten the NHS if proper safeguards and guarantees are not put in place. I will then turn to the importance of the proper scrutiny of trade deals, both in Parliament and more generally, to ensure that no Government can put our NHS in danger.
First is the risk that trade deals could increase and consolidate privatisation of the NHS. Services chapters in free trade agreements typically include provisions that lock in liberalisation measures, such as privatisation. There is genuine concern that trade agreements could force us to lock in market liberalisation of the NHS, so that future Governments are unable to bring these services back in house. The move from positive lists, where only listed services are subject to liberalisation, to negative lists, where all services are deemed open to liberalisation, unless explicitly excluded, makes that significantly more likely.
Under the negative list system, the UK would have to explicitly opt out all healthcare and related services. If we did not, it could be difficult to ever bring privatised services back in house. In my area of Bradford, I am fighting alongside Unison to stop the creation of a wholly owned company for NHS staff such as cleaners and porters. If this goes ahead, and we agree a trade deal without the correct exceptions, bringing those services back into the NHS will be even more difficult and complex.
There are similar concerns about the inclusion of ISDS procedures in trade agreements. The threat of Government or NHS bodies being sued under ISDS, for example for bringing a service back in house, can have a major chilling effect on public policy decisions. There are numerous examples of this around the world. The Labour party has taken a clear position on ISDS. We do not think it is necessary and we do not think it is right. We believe there are many alternatives that balance the need for investor protection with proper guarantees, so that Governments can make public policy decisions without fear of corporate legal action.
A potential deal with the US is of major concern in respect of drug pricing. Last year, President Trump accused the rest of the world of freeloading on the US, resulting in high drug prices in the US. He claimed that:
“When foreign governments extort unreasonably low prices from U.S. drug makers, Americans have to pay more to subsidize the enormous cost of research and development”.
In particular, he blamed countries that
“use socialized healthcare to command unfairly low prices from U.S. drug makers”.
The NHS purchases drugs in significant volumes and therefore uses its bargaining power to set the price at the lowest possible levels. When the Office of the US Trade Representative published an outline of negotiating priorities for a US-UK trade deal in February, it included in a section entitled “Procedural Fairness for Pharmaceuticals and Medical Devices” a statement that the US would
“seek standards to ensure that government regulatory reimbursement regimes are transparent, provide procedural fairness, are non-discriminatory, and provide full market access for U.S. products”.
The threat here should be evident. The US Secretary of Health and Human Services put it even more starkly when he said that the US would “pressure” other countries through trade negotiations,
“so we pay less, they pay more.”
The Government may say that that is not what they intend, but we must recognise the very real risk that, in the rush to complete a trade deal with the US, it will happen—a case of marrying in haste and repenting at leisure. In negotiations with Australia and New Zealand, the US has already tried to force changes to their medicines pricing policies. In those cases, the US backed down to achieve other trade objectives, but that is highly unlikely to be the case with the UK, given the size and scope of the NHS’s purchasing power. That could lead to higher prices and less choice for the drugs the NHS needs. The effect on the NHS would be significant and potentially devastating for patients.
As many hon. Members have made clear, there are numerous and credible threats to our NHS in potential future trade agreements. That is why parliamentary scrutiny of trade agreements is critical. We in the Labour party have repeatedly pushed for the Government to bring forward an inclusive, transparent and meaningful system of scrutiny and accountability. We tabled amendments to the Trade Bill and the Lords passed amendment 12 to the Bill, which secured Parliament’s right to vote on the mandate and to have a meaningful debate on any signed deal before ratification. Alas, it seems that the Trade Bill has disappeared. Can the Minister confirm today whether it will ever see the light of day again? It must be this Parliament’s right to scrutinise and approve trade deals and it is our duty to protect the NHS in trade agreements.
To finish, I thank all my hon. Friends who have made it clear that we in the Labour party will not allow our NHS to be sold off as the price of a quick trade deal. The NHS is more than a service; it is one of our proudest national institutions, and we must defend it with all we have.
It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for Hartlepool (Mike Hill) for opening the debate and representing the more than 160,000 petitioners who put their signatures to the document.
It is clear that the NHS is something that all of us here and the public as a whole care deeply about. There can be no doubt about that. We have heard and seen it in many forums before and we know it is true. However, I want to set this out right at the start, because I do not want there to be any room at all for ambiguity: I guarantee the House that the Government will protect the NHS in trade negotiations. That means no requirement to increase private provision, no allowing American companies to ramp up drug prices, and no undermining the safeguards on healthcare data. That is a guarantee that I, the Secretary of State and many others have repeated on many different occasions—most recently, when I appeared before the International Trade Committee last week and said the self-same thing there.
The NHS is an excellent healthcare system. It tops the Commonwealth Fund’s rankings of the best healthcare systems in the world. More than that, it is there for all of us when we need it the most. Those are not just words. Many of us—probably all of us—have an “NHS story” to tell of a time when the NHS helped us or those we love. I am afraid that mine is a story of when the NHS could not be there for someone.
I am married to an American. My brother-in-law could not afford proper healthcare for his illness because his insurance broker made the mistake of not renewing his health insurance for one week. There was one week’s gap, and in that one week he was diagnosed with a brain tumour and was thus both uninsured and uninsurable. I do not particularly want to elaborate on all that the family went through and faced over the next three years of his life, but it was pretty miserable. I was convinced before that it was only civilised to have the sort of system that we have here in the UK, and that experience did nothing but reinforce that view. It is simply not civilised not to provide healthcare for our citizens when we can afford to do so. The US health system is one where even those with insurance can never be sure whether their insurance will pay out; where insurance policies can often be limited in extent, condemning families to penury even when they started with quite a lot; where people with insurance routinely do not seek help at all because of the excess policies and where those who cannot afford to cover themselves are left to depend entirely on charity at best, or at worst are wholly abandoned.
As hon. Members might imagine, I want to protect the NHS and so do this Government. I cannot imagine a Government who would not want to do so. I have also called both campaigns today to make absolutely certain that the candidates whose names are on the ballot paper for leadership of the Conservative party also agree with that position—just to be 100% sure. Of course, they do both take that position.
Even if there ever were a proposal to pursue such a course, I think we in this room all know that, quite rightly, the British people simply would not have it. More than 160,000 people signed the petition that we are discussing today, and only last year a YouGov poll found that more than two thirds of people thought the NHS was Britain’s greatest achievement. Given that strength of feeling, why would this or any future Government who purported to represent the people use trade deals as some kind of back door to privatise the NHS? It just does not make any sense in anybody’s language. Even if a Government tried to do so, how would a trade deal get through Parliament? Not only could it not be ratified without scrutiny by Parliament, but there is separation between international and domestic law in our constitution, so any changes made to the NHS through a trade deal would need domestic implementing legislation, not just in England, but in Scotland, Northern Ireland and Wales. There is no back door here to sidestep Parliament. So much would have to change in our domestic legislation, and I cannot see any way—even if a Government were to decide they wanted to do things that way—that it could actually happen. The good news is that nobody has any intention to use free trade deals in that way anyway.
I simply ask that we agree that there is no prospect whatever of any British Government of any colour or flavour seeking to privatise the NHS by the back door. Can we please put that one to bed? There are perfectly legitimate reasons to discuss issues around the NHS, which I will come to in a moment, but let us please stop scaremongering and pretending that the Government are about to try to privatise the NHS. It is not going to happen.
So what about the particulars? How we protect our public services in trade deals is well known. We already have multiple layers of protection around the NHS and all our public services. The WTO’s general agreement on trade in services explicitly exempts services that are
“supplied in the exercise of governmental authority”.
The trade in services aspects of all agreements to which the UK is currently a party explicitly set out exceptions and reservations for public services. Indeed, my hon. Friend the Member for South Thanet (Craig Mackinlay) pointed out that Cecilia Malmström, the Trade Commissioner for the European Union, issued a letter at the time of TTIP making that absolutely crystal clear to anybody who wished to read it. She said that people could object to any number of things about TTIP in all sorts of ways, but the one thing they could not do was pretend that this was a way for US health interests to take over publicly provided health services in the European Union. It plainly was not.
No trade agreement has ever affected our ability to keep our public services public, and no one has ever forced us to change the way we run them. The Nuffield Trust, which is one of the most respected commentators on healthcare in the UK, has pointed out that:
“A trade deal would not have the power to stop the NHS being a free, universal service.”
I think it was the hon. Member for York Central (Rachael Maskell), who is no longer in her place, who made a point on section 75 of the Health and Social Care Act 2012. The Act was not about privatisation, but about placing the financial power to change health services in the hands of the NHS professionals whom the public trust most, and putting clinicians, rather than politicians, in control of healthcare. The 2012 Act did not introduce competition into the NHS; previous Governments introduced competition as a core part of their earlier reforms. The Act established a level playing field in which any qualified provider can provide NHS-funded services, to encourage greater diversity in supply and improve patient choice.
I ask Members to consider for a moment where they think NHS procurement and provision finishes and starts. I cannot imagine a world where we would not buy our pharmaceuticals from the private sector. There is no Government in the world—other than perhaps the Cuban Government—who design pharmaceuticals. Is it suggested that outsourcing accounting is somehow a bad idea? How different can accounting for the NHS be, honestly? What about building hospitals? Does that have to be done by the NHS? What about the equipment used in operating theatres? Does it have to be provided by the NHS? I think we all know that there are areas where it makes sense for the private sector to be involved.
Like the hon. Members who have spoken in the debate, I have no particular interest in the private sector providing actual straightforward healthcare. There are some cases where even that seems sensible. Perhaps if there is not capacity in a certain area of expertise and the capacity exits outside, it might be right to commission it. I think we can all agree that there are some areas around the national health service where there will always be provision by the private sector, because that simply makes more sense.
It is said that investor-state dispute settlement mechanisms would allow foreign firms to take the UK to court for not opening the NHS up to further competition. That, of course, is a concern, but it is not the truth. Let us be clear: ISDS does not and cannot force the privatisation of public services. The mechanisms only provide protection for established investments that companies have made in a partner’s market. At the end of 2017, UK businesses and investors of all sorts had around £1.3 trillion invested around the world, so those protections can be crucial, particularly where legal jurisdictions are perhaps a little less rigorous than they are here.
The Minister is being generous in giving way. Does he agree that there are precedents where companies, such as tobacco companies, have taken elected Governments to court and wasted, in private courts, a lot of money that could have been spent on public services, and that that is a serious dent in democracy as we know it?
The hon. Lady anticipates exactly the section of my speech that I am about to come on to.
I was talking about the £1.3 trillion invested overseas and the fact that ISDS arrangements are incredibly useful in guaranteeing the delivery of justice of some sort for those who have invested under certain terms in less certain legal markets. However, they cannot force the UK to change the way we run our public services. The proof of that—I hope that this will answer the hon. Lady’s question—is in the results. The UK has more than 90 bilateral investment treaties in place, yet there has never been a single successful ISDS claim against the UK Government on any issue. Nor has the threat of potential claims affected the Government’s legislative programme. I therefore do not believe that there is a chilling effect. The UK Government have legislated exactly as they wished on every issue, despite those 90 bilateral investment treaties.
That is not to say that bringing services that have already been opened up to private providers back into public ownership might not lead to challenges. That is true, and we should not sit in the Chamber today and not admit it. Of course, that does not necessarily rely on ISDS agreements. In the UK we have perfectly competent courts, and I suspect that many people might pursue those issues through the regular courts under contract law. However, ISDS indeed provides another avenue. Even the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), recognises that compensation would have to be offered if any fairly let contracts were not honoured because of a change in policy. That much is clear, and we have heard him say so directly. However, that is wholly different from being able to force the private letting of contracts that a state wants to remain public. That cannot happen under any ISDS arrangement.
Another concern that has raised its head today is medicine costs, and the idea that a trade deal with the United States would raise the cost of medicines the NHS needs. Across all nations of the UK, we have an excellent set of systems that generate great outcomes for patients at an affordable price. We are proud of the way we assess the value of and agree commercial deals for medicines here in the UK, which is good for the NHS, for patients, and for companies that want to do business with us. We are absolutely clear that in any future negotiations we could not agree to any proposals on medicines pricing or access that would put NHS finances at risk or reduce clinician and patient choice—and what on earth would the incentive be? We have a system in place that works, ensuring that patients have access to medicines they need at prices that are affordable to the NHS. That is in the best interests of patients in the UK.
It is simply not a matter for the UK that the US is a highly fragmented market for pharmaceuticals and medical equipment, and so has reduced buying power. Neither is that issue a matter to be contemplated in any potential trade deal. There is no protectionism here; it is simply a matter of market power. Ultimately, it is a matter for US domestic politics. If the US takes a different route, it will have more buying power. We have taken a different route, and we have much more buying power. I can think of a thousand different markets where the US has much larger buying power than us. Are we supposed to petition it suddenly in a US trade agreement to bargain away its buying power? I do not think so, and I do not see why it should be any different in this case.
Some people—not in this debate, but it is worth dealing with, as there has been so much interest in the debate, in terms of the number of signatories to the petition —have raised the related issues of patent protection, extensions and generics. There is a complex web of interactions around those issues. On the one hand, there is a need to allow innovation in pharmaceutical and medical technology research and, on the other, there is a need to ensure that when patents expire—I nearly said “when patients expire”; forgive me—generic or bio-similar alternatives are quickly brought to market. We will seek to balance those as we always have, in a way that stimulates research and innovation, together with the cost of supplying healthcare free at the point of use in the UK.
Let me turn to concerns about the potential use of NHS data. The Government take seriously the use and sharing of that data. I reiterate what the Secretary of State for Health and Social Care said recently:
“NHS data must always be held securely, with the appropriate and proper strong privacy and cyber-security protections.”—[Official Report, 18 June 2019; Vol. 662, c. 114.]
The Government will ensure that trade negotiations do not undermine the safeguards that we have in place around health and care data. Those safeguards allow the public to have trust in how and why their data is used, and it is incredibly important that we maintain them.
To be clear, free trade agreements of course have a role in data. At the Department for International Trade, we are tasked with ensuring that data flows on a legal, safe and secure basis. We would seek to review any rules in place to safeguard data, such as data localisation requirements, and ensure that they are not overly protectionist. However, that should not be confused with the data that actually flows. We set up the pipework, but whether or not the taps are turned on is a matter for the regulators. In our case, that is the Information Commissioner’s Office, which is entirely clear about the need for privacy and cyber-security.
I will deal with one or two other issues that were raised that do not fit neatly into the categories in my written speech. First, on FTA scrutiny, the hon. Member for Bradford South (Judith Cummins) will know full well that we laid a Command Paper earlier this year that made a full and generous offer on scrutiny. I am well aware of her party’s position on scrutiny, and I absolutely agree with her and her Front-Bench colleagues on the need for real transparency on and scrutiny of free trade deals. I absolutely understand about the incentives to control every part of the passage through Parliament by votes. I would happily sit down with her at some stage and talk through why I think that is perhaps not deliverable, and perhaps not exactly what she wants.
I am clear that we must have responsible scrutiny, and that the Government must be as transparent as they can under the auspices of an FTA. When negotiating an FTA, plainly there are things that we cannot reveal in public; otherwise, we simply give away any negotiating advantage we might have. At the same time, there needs to be accountability to Parliament. I therefore think we are largely of one mind, at least on the principle, if not the actual solution.
The hon. Member for Dundee East (Stewart Hosie) chose very carefully the two examples he gave—Norway and Switzerland. They, of course, are two free trade agreements that the EU has with partners that have very close arrangements with it in any event, in other ways. It is precisely because of the relationships that they have with the European Union that they cannot match in a continuity agreement what they can match in an agreement with the EU. The fact that those agreements are not as comprehensive as they might be is a consequence of our leaving the European Union, not of our inability to negotiate or, somehow, a failure on the part of the Government. I think we have achieved remarkable amounts, given the circumstances that Switzerland and particularly the EEA countries face.
I shall comment briefly on positive and negative lists, ratchets and so forth. In the end, having taken advice and listened to arguments from officials one way and the other, I have to say that, on the whole, it does not matter a great deal whether the list is positive or negative; the only thing that matters is that it is right, so that the outcomes—what the agreements actually achieve—are precisely what the UK wants. We can either include everything on the list and strike bits out, or exclude everything from the list and allow things in, but it seems to me that in the end that is a nice distinction, in the legal sense, and that actually what matters is the effect when we have finished. This is something that people talk about a great deal. In the end, all I want to do is ensure that we actually get the outputs that we need.
I hope we can agree that the picture is at least slightly rosier now than when this debate started. The legal protections are there to provide robust protection for the national health service. The commitment from the Government is there to ensure that that remains the case. The opportunities are there for us to make the most of our world-class experience and expertise in healthcare and the life sciences. As we look back at all the NHS has given us—particularly after its 70th birthday last year—we can be hugely proud of our past, but we can also be extremely optimistic about our future on the global stage.
I shall finish by repeating what I said earlier. This Government, the two candidates for the leadership, the outgoing Prime Minister and, indeed, all of us on the Government Benches are clear that we have no interest in privatising the national health service. We do not want to use free trade deals to do that either. We understand the concerns of the petitioners, and I hope very much that what I have set out today gives some reassurance.
First, I thank the petitioners for raising this petition and the House of Commons Petitions Committee staff, who put so much effort into advertising the petition in advance of today. I also thank hon. Members for their contributions. I particularly thank my hon. Friend the Member for Warrington South (Faisal Rashid), the hon. Member for South Thanet (Craig Mackinlay), my hon. Friend the Member for Blaydon (Liz Twist), the Front Benchers—the hon. Member for Dundee East (Stewart Hosie) and my hon. Friend the Member for Bradford South (Judith Cummins) —and all those who made interventions.
Our NHS trusts are in deficit and creaking at the seams. NHS leaders are already in the USA, including NHS leaders from my local trust, looking at best practice over there. If the Government’s reassurances are right, the NHS will not be for sale, but as the petitioners rightly say, “Words aren’t enough”. We need the right checks and balances to protect us from trade agreements and marketisation. Ultimately, as hon. Members have said, we need to consider revoking the Health and Social Care Act 2012 in order to protect those services that thus far have not been privatised.
Question put and agreed to.
That this House has considered e-petition 242300 relating to future trade deals and the National Health Service.