Geraint Davies (Swansea West) (Lab/Co-op)
I beg to move,
That this House believes that the Transatlantic Trade and Investment Partnership, the Comprehensive European Trade Agreement, the Trade in Services Agreement and any associated investor-state dispute settlement provisions should be subject to full parliamentary scrutiny in the UK and European parliaments.
I am amazed that the Leader of the House, who is just leaving the Chamber, has described opposition to the Transatlantic Trade and Investment Partnership—TTIP—as a political campaign by left-wing pressure groups. I do not think that the Chair of the European Scrutiny Committee, the hon. Member for Stone (Sir William Cash), or the Chair of the Environmental Audit Committee, my hon. Friend the Member for Ogmore (Huw Irranca-Davies), fall into that category. They, along with members of the Business, Innovation and Skills Committee and many other Committees, are interested in this matter for a variety of reasons. I am pleased that Members from all parties across the House have taken an active interest in this vital issue. I note that the Leader of the House has now left in ignorance, but that is as we would expect.
When I spoke on this subject a year ago, I talked about arbitration problems and big companies focusing on suing democratically elected Governments over laws that might undermine their future profits. Today, in the context of the COP 21 talks in Paris, I want to make the key point to the Minister for Small Business, Industry and Enterprise that unless the environmental imperatives coming out of Paris are integrated, in a binding and legally enforceable way, into the EU free trade agreements with Canada and the United States, we will be in danger of sleepwalking into environmental oblivion, irrespective of what comes out of the talks.
Mr Jim Cunningham (Coventry South) (Lab)
It is right that this motion should come before the House today. Going back to my hon. Friend’s comment about the Leader of the House, how can we trust the Government with industrial relations when we have their anti-trade union Bill going through the House? This should be scrutinised on the Floor of the House, as should the effects on public services, given the presence of American predators who could take advantage of the new arrangements.
Geraint Davies
Yes, that is a key point. I have here a copy of the draft trade and sustainable development chapter of TTIP, and I hope that the Minister has read it. I know that a number of her fellow Ministers have not. It contains references to rights under labour laws, but they would not be legally enforceable. I would like them to be enforceable, because workers’ rights are at risk of erosion as a result of these deals.
I want to make it clear that I am in favour of trade, of growing trade and of the European Union. I do not want any confusion about that. The trade between the EU and the United States is already worth in excess of $700 billion, as the Minister will know. The forecasts of the amount by which the economies will grow vary from nothing to about 4%. Let us remember that the forecast for the expansion of economic activity as a result of the single market varied between 4% and 6.5%, but it ended up being 2%. Companies such as Moody’s are saying that it will amount to the equivalent of a cup of coffee per person per day. If you like coffee, perhaps that is worth having, but we need to think about the benefits of trade versus the costs and risks involved.
Christina Rees (Neath) (Lab)
Does my hon. Friend agree that Labour MEPs have sought a common position in the EU Parliament on TTIP, and are calling for a full carve-out of all public services, the inclusion of all binding and enforceable workers’ rights, and strong safeguards on food, health and safety measures? That specifically excludes the investor-state dispute settlement mechanism, which is not democratic, not open to scrutiny, and not independent or fair to states that are being sued by corporations whose members sit on the board.
Geraint Davies
My hon. Friend makes her point well, and I will come on to some of those issues, especially the ISDS.
Geraint Davies
I do not want to give way too many times, but I will do so briefly and then make progress.
Guto Bebb
I am grateful to the hon. Gentleman for giving way, and I apologise if my voice is not very strong today. On employee rights, I met representatives of the American trade union movement, which sees TTIP as a great opportunity to ensure that the rights we have in Europe are replicated in the US. As an internationalist, I would expect the hon. Gentleman to support such a change.
Geraint Davies
I share that aspiration, but the issue is whether those rights are legally bound and enforceable within TTIP, and they are not. My point is not that we should burn, shoot and get rid of TTIP; we should pull the ISDS teeth out of the wolf, and genetically edit TTIP so that it includes environmental imperatives, enforceable rights at work, and human rights. It should be a blueprint for future global trade, rather than a blueprint for the destruction of environmental and human rights.
Geraint Davies
I will give way first to my hon. Friend the Member for Wirral West (Margaret Greenwood), and then to my right hon. Friend the Member for Warley (Mr Spellar), who I know is pro-TTIP, so I will be glad to hear from him.
Margaret Greenwood
I congratulate my hon. Friend on securing this important debate. Does he agree that the Government and European Commission should heed the call from the British Medical Association to exclude the NHS from TTIP, just as the audio-visual sector and healthcare services are excluded from the EU services directive?
Geraint Davies
At a minimum, we should have a copper-bottomed arrangement such as Finland’s, which protects all health—public and private—as well as social care, from any intervention. At the moment those guarantees are not provided, and things are done on a case law basis. If there is private provision somewhere, that would allow an avenue for American contractors to move in.
Mr Spellar
My hon. Friend lays great weight on the ISDS. Can he say how many agreements Britain currently has that have ISDS provisions, how many cases have been brought against the UK, and how many have been successful?
Geraint Davies
My right hon. Friend knows that a large number of ISDS bilaterals are in play, and that no cases have been taken against us. He also knows that exposure to ISDS will increase by about 300%. If his pet dog goes around biting the neighbours, that does not guarantee that it will not bite him. Just because other people die from cigarettes and he has not, that does not mean he will not. We should protect ourselves against the provisions in ISDS, rather than hear those spurious arguments that are normally regurgitated by Government Members.
Helen Goodman (Bishop Auckland) (Lab)
On the specific point raised by our hon. Friend the Member for Warley (Mr Spellar)—
Helen Goodman
By our right honourable Friend, this is not about the number of court cases taken; it is about ministerial action being inhibited for fear of those court cases. I had that experience as a Minister, and our right hon. Friend is barking up the wrong tree.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We need short interventions because there is a lot of interest in this debate. The hon. Member for Swansea West (Geraint Davies) is 10 to 15 minutes into his opening speech, and I would not like him to give it all away through interventions.
Geraint Davies
I will resist responding to the comment about barking.
On the ISDS, we know that big companies use the powers available to them to sue democratically elected Governments. For example, the Lone Pine fracking company is suing the Canadian Government for hundreds of millions of dollars because Quebec brought out a moratorium on fracking. In a well-known case, Philip Morris is suing Uruguay and Australia over tobacco packaging. The Dutch insurance company, Achmea, is suing the Slovakians for trying to reverse health privatisation. If those powers are available, corporations will use them to maximise profit. Why should they not? That is what they are there to do. I am not saying that they are immoral, because that is what they do and that is what we expect. Our job is to regulate to ensure that the public interest is put first.
There is also an issue of sovereignty. The comprehensive economic and trade agreement will last for 20 years; some people are worried about the EU, but future Governments would be bound by these rules for 20 years. I think that is wrong, and a lot of Conservative Members have raised that point with me.
Albert Owen
I am grateful to my hon. Friend. I realise that he is getting a little frustrated with the amount of interventions, but mine is brief and specific to the motion. He talks about the scrutiny of this House. Will he explain what method of scrutiny would be used? Would scrutiny be done by a Committee, or would a Minister come to the Dispatch Box, so that the whole House could provide scrutiny?
Geraint Davies
The issue is already being scrutinised by the European Scrutiny Committee, and the Environmental Audit Committee, on which I sit. The Business, Innovation and Skills Committee is also interested in it, and the provision will clearly have a widespread impact, so it should be brought before the House. I would like recommendations to be made by this House in an advisory way to the European Parliament, so that it can table amendments. At the moment, everything is being decided by negotiators behind closed doors. That is completely unacceptable, and it will just be a yes/no decision with ratification. CETA was agreed in September 2014, and it sounds as if it is having some sort of legal washing. It will be brought before Members of the European Parliament next spring.
I want to mention regulatory chill because of the pressure and threat of that sort of action. Already, the EU has withdrawn its demands for transparency and clinical data in trials. That means that if a big drugs company does 10 trials and three go wrong—thalidomide, for example—and seven go right, it only has to publish details of the seven that go right. That is worrying, as are the bits and pieces about trade secrets, which clearly undermine and inhibit democracy. There are issues of rights at work, and the problem of CETA being agreed, because that is a Trojan horse that allows all the powers created in the investor-state dispute settlement to come in through the back door and bite our democracy, public services and public finances.
Geraint Davies
No, I will not. I want to dwell on the fact that as we sit here, 20 million people in Beijing are crying because of the environmental damage of trade and the unregulated economic activity that supports it. Meanwhile, in Cumbria, people are flooded because of the impact of climate change, and no one seems to be asking why. We should ensure that future trade agreements for the EU, Canada and the US have enforceable environmental imperatives that constrain corporations from making the situation worse, and that that spreads to China and elsewhere. However, nobody seems to be speaking about elsewhere.
We need trade laws to be trumped by what comes out of Paris in a legally binding and enforceable way, but that is not happening at the moment. I spoke with the Secretary General of the OECD, who was making a speech in Paris when I was there at the conference. He said that a £200 billion subsidy is currently given to fossil fuels and that he was not happy about that. I said, “What about getting the environmental imperatives from Paris as minimum standards into TTIP?” He scratched his head and said, “We haven’t thought about that, but it might be a good idea.” That is where we are, but the EU is asking for an oil and gas pipeline from the US to get shale gas and all sorts of oil over here. What will that do for our carbon footprint?
This is a case of trade on the one hand and the environment on the other, and we need an integrated approach to global sustainable development. I think that the ISDS should be stripped out of TTIP. People say, “What about the investors? They should be protected,” but investors have judicial review and breach of contract, and they already use those rights in public courts. The only difference is that in public courts the public interest is weighed against the commercial interest; on an arbitration panel, it is all about private interest, and public interest and public health issues are not really weighted.
Let me give an example. Tecmed is a waste disposal plant in Mexico that breached new regulations. The Mexican Government decided not to renew the contract because of that breach. Tecmed went to an arbitration panel and Mexico lost the case and had to pay £5 million, plus £8 million court costs. My point is that if the UK requires stronger emissions standards to live up to our promises regarding a 1.5° or 2° increase in temperature, the ISDS could come along and sue us for obliging companies to move forward with those requirements from Paris. Tribunals, as opposed to public law, are more heavily in favour of investor protection than public protection. That is the wrong way around.
Lord Maude said to me, in response to questioning by the European Scrutiny Committee, that companies deserve a bit of compensation if Governments intervene, and that there was nothing wrong with that. The point I am trying to make, however, is not that there should not be compensation. The Minister will be aware of the case in which the Costa Rican Government took back land with natural value—endangered species and habitats—and provided compensation of $1.9 million. The owners of the land took them to an arbitration tribunal, which did not factor in public interest or public value—that had nothing to do with it. It was all about commercial issues and it was decided to fine the Government $16 million. The ISDS favours the private sector, not public interest or natural habitat, so we need to strip it out of TTIP.
Another issue with ISDS is that it can trump national law and previous national law. In the case of Deutsche Bank v. Sri Lanka, the Supreme Court in Sri Lanka brought forward existing laws to stop payment to Deutsche Bank. Deutsche Bank went off to an arbitration panel, an international court, and, even though its arrangements had been made after the national law had been passed, it won the case. This implies for Britain that, if TTIP goes through in its current state, the Climate Change Act 2008 will be trumped by ISDS. That is unbelievable in terms of sovereignty and democracy.
A lot of Conservative Back Benchers are up to speed, but there are a lot of turkeys voting for Christmas on the Government Front Bench. We will not have protection for our famous products, such as pasties, Welsh lamb, Cumbrian sausages and so on. The headline in The Sun was lyrical: “Pasties get a pasting.” We could have Welsh lamb produced in Nebraska.
The TTIP environmental chapter makes reference to Rio and Copenhagen, but it contains nothing that would not allow investors to trump enforcement. There is no binding enforceability. None of the pledges in the environment chapter are carved in stone, and they could be overturned by arbitration panels. Those pledges need to be legally binding, with an enforcement mechanism that goes through national courts.
In a nutshell, I am suggesting that ISDS be removed from TTIP. Article 1 of CETA should say that the provisions in TTIP will be, without reservation, subject to the 2015 Paris conference and subsequent treaty agreements, that TTIP should be consistent and contribute to the targets agreed in Paris and subsequent COP meetings, and that we do not go down the route of harmonising by means of the proposed regulatory co-operative body. Harmonisation of standards is a good thing in principle, but it would all be decided behind closed doors by civil servants subject to lobbying from industry. That is not something we want.
Finally, there are a lot of things wrong with TTIP that we need to change, but the motion relates simply to scrutiny. I am not for abandoning TTIP. We need a blueprint for future global trade. We need to integrate environmental imperatives. We need to make sure legal rights and human rights are enforceable, and show leadership on global trade that provides a sustainable, fair and equitable world.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. There will be an eight-minute limit on speeches.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
I congratulate the hon. Member for Swansea West (Geraint Davies) on securing the debate and on raising some very important points that this House should consider seriously.
As the last Member in this House, I think, who was involved in negotiating a successful international trade round—the Uruguay round, when I was Secretary of State for Trade and Industry—I am extremely in favour of free trade. I believe there is a strong case for unilateral free trade, although that is not easy to sell to the electorate. A priori, therefore, I approach the TTIP agreement from a position of strong support. I am very suspicious of critics of TTIP who are often simply against trade, simply against markets, simply against choice, simply against business and simply against America.
Mr Lilley
I will not, because the hon. Gentleman may find in a minute that I have answered his question.
I am especially hostile to all those people who press the button on 38 Degrees campaigns that relate to anything against trade and business. I was rather surprised, therefore, to find myself sympathising with four people who appeared in my surgery and announced, to a groan from me, that they were members of 38 Degrees and had concerns about TTIP. They actually raised some very important points that resonated with me from my experience of past negotiations.
I am, of course, totally in favour of removing tariffs, but that is a relatively minor aspect of what TTIP is about. Over the years, we have been hugely successful in removing tariffs and straightforward barriers to trade. They averaged 40% back when the general agreement on tariffs and trade was set up. They were still around 15% when I was negotiating. The tariffs now between the United States and Europe average less than 2%. Half of all goods traded between the two continents are entirely tariff-free. That means, of course, that those that are subject to tariffs can be higher. On clothing, the tariffs are up to 30% and on cars the US levies a tariff of 2.5%. The EU, under the influence no doubt of German car manufacturers, levies a tariff of 10% on imports of cars from America.
Abolition of the remaining tariffs is worth having and would be the final success of GATT. TTIP goes far beyond that, however, and into harmonisation of regulation, rules on investment and rules on procurement. It is true that those sorts of rules can, either by intent or by accident, be used to inhibit trade. We should avoid using them in that way and we should seek, if we can, agreements to anti-discrimination rules so that neither in the business of investment nor procurement would either the United States or the EU be allowed to discriminate against firms from the other side.
My concern, and the concern of my constituents who declare themselves to be members of 38 Degrees, is that we may be creating a bureaucratic and legal process that may escape proper democratic control and may be subject to improper corporate influence. It is also symptomatic, although this is the least important point, of bureaucracies that perpetuate their existence even when the task they were established to do is largely complete. Literate Members of this House—we are all literate—will remember Dickens describing the circumlocution office, whose chief, Lord Tite Barnacle
“had died at his post with his drawn salary in his hand”
defending the existence of an organisation that no longer had any need to exist. Actually, because we have succeeded on tariff negotiations, we should be scaling down, not up, the international bureaucracy and not giving it far more undemocratic powers.
Even during the Uruguay round, I had my concerns. First, I was concerned about accountability to this House. The negotiations were so complex that it was difficult for the House to hold Ministers to account, and it was easy for Ministers to present a fait accompli to this House and say they had achieved the best compromise.
Jeremy Lefroy (Stafford) (Con)
Does my right hon. Friend agree that one of the bodies scrutinising TTIP very assiduously will be the US Congress? It would not let things go that it felt put their own people at a disadvantage.
Mr Lilley
I would like to hear my hon. Friend say that this House is going to exercise democratic control rather than relying on the American Congress.
Partly because Ministers were so little accountable to this House on this issue—I cannot remember having to respond to any debates on it—officials were very reluctant to be accountable to Ministers. In almost every other area where I was in Government, I thought that British officials were wonderful and that the caricature of them in “Yes Minister” was false, but where an international bureaucracy was involved and there was limited democratic control, they were extremely reluctant to respond to Ministers’ requests about what they were up to or to explain the compromises they were making. I had to argue very hard and strongly to reassert my control over officials. Ultimately, of course, it is up to Ministers to do that.
Bob Stewart (Beckenham) (Con)
Does my right hon. Friend think that TTIP will be in any way accountable to this House? It does not look as though it will be.
Mr Lilley
There are aspects where I think we are in danger of unnecessarily handing over unaccountable powers, and we should be very careful about doing so.
Negotiations, then and now, are aggravated by the fact that we are negotiating at second hand through the EU and at arm’s length. I campaigned for continued membership of the EU in 1975, and I have accepted that we have to make some sacrifices to have a common market, but we should be aware that we have only second-hand control. My hon. Friend the Member for Stafford (Jeremy Lefroy) thinks that we should probably rely more on the American Congress.
Mr Lilley
No, I am sorry. I know that I am sadly misrepresenting my hon. Friend.
All these problems are comparatively easy when we are just dealing with the abolition of tariffs. When we are handing to international bureaucracies and legal tribunals wide areas of regulation, investment rules and procurement, the problems may be greater.
My other concern about bureaucracies is that they may be unduly influenced by corporate lobbying. The less responsive they are to elected Members of this House, the more likely they are to be responsive to corporate lobbying. I am not one of those who believes in the dogmatic Marxist view that the world is run by a conspiracy of corporations and big business, nor that big business always wants to deregulate. In truth, the people in bureaucracies and big business have a common world view and believe that they should run things collectively with as little interference from democratically elected politicians as possible.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
Will the right hon. Gentleman take an intervention?
Mr Lilley
I will not, I am afraid.
Moreover, big business has a natural interest in regulation being used as a barrier against small businesses trying to enter the market or new businesses trying to innovate.
We should be very careful about creating international bureaucracies outside the control of democrats that may prove less responsive to elected Governments but more vulnerable to corporate regulation. The hon. Member for Swansea West raised the specific issues of fracking and genetically modified foods. I am very strongly in favour of fracking, and very strongly in favour of allowing GM to be used; I happen to have the main research institute on that front in my constituency. Ultimately, these decisions should be made democratically. To me, it is far more important that democracy should prevail than that some international bureaucracy should support my prejudices on fracking and GM, as it probably would. It is up me and people like me in this House to persuade the majority of Members and the majority of the public that something is right, and not to say, “Let’s support an international bureaucracy because it is going to take the decision out of our hands and reach what we think is the right view.”
I am unequivocally in favour of removing tariffs. I would welcome agreement under TTIP to anti-discrimination rules whereby Europe and America agree that they will not discriminate against foreign companies in procurement and investment. However, I would be very careful about creating a self-perpetuating international bureaucracy and handing to it powers that are largely out of the control of elected representatives and too much under the influence of corporate lobbying. At the end of the day, democracy is more important even than free trade.
Mr John Spellar (Warley) (Lab)
I declare an interest as the chairman of the all-party European Union-United States trade and investment group and as an unashamed supporter of trade. Over the centuries, trade has been of huge benefit to this country, particularly to the west midlands, which grew on the back of trade. Indeed, the west midlands is the only region of the UK that has a positive trade balance with China. Equally significantly, trade has been the engine by which hundreds of millions of people around the world have been lifted out of poverty. We need only look at the growth of China. I will come back to some aspects of that, as they were mentioned by my hon. Friend the Member for Swansea West (Geraint Davies). Hundreds of millions of people in China have seen their lives changed dramatically as a result of trade.
In debating these trade deals, there have historically been those in this House and in British politics who are opposed to trade. This is not a recent argument.
Kelvin Hopkins
My right hon. Friend will know that all the nations that have achieved dramatic improvements in their economies have done so with a degree of protection. The Chinese have used a massive devaluation of their currency against the western currencies behind which they have seen their economy develop rapidly. Protectionism works.
Mr Spellar
I am pleased that my hon. Friend wants us to move towards a more rules-based system that will enable us to develop more effectively. Trade has worked in that regard, and I am glad that he concedes that.
A great mythology is being developed around this. When I asked my hon. Friend the Member for Swansea West how many agreements the UK has had that involved ISDS, he was reluctant to reveal that the answer is 94. How many cases have been taken against the UK on that basis? My understanding is two. How many of those cases have been successful? My understanding is none. Mention is made once again of the very long-running Philip Morris so-called case. It is absolutely true that Philip Morris said it was lodging a case. Has it gone anywhere? Has it stopped the Australian Government taking action? Of course it has not. One of the more regularly cited cases is that of Slovakia’s health insurance system. We are often told that a Dutch insurance company managed to secure substantial damages from the Slovakian Government. That is true, because the case was about whether, under the existing contract, it could repatriate its profits to Holland. In a second case, which everybody seems to forget, the Slovakian Government won, and also got costs, because the tribunal held that the company was not empowered to intervene in the democratic processes of a sovereign state.
I particularly take issue with the Government over the fact that while the Leader of the House might talk about left-wing groups campaigning with scare stories, Ministers will not take on the myths so that we can get back to arguing about the issues that my hon. Friend rightly raised. The Government just hide away engaging in the negotiations and will not take these issues on.
Dr Andrew Murrison (South West Wiltshire) (Con)
If ISDS has been used so little, and given the concerns that have been expressed by all sorts of groups, particularly in relation to the NHS, why does the right hon. Gentleman think it is so important to have it as part of TTIP, which is an arrangement that, like my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), I would in general strongly support? ISDS appears to be the sticking point for a very large number of people.
Mr Spellar
I would strongly hold to that. I am just saying that ISDS is not the great problem that people are claiming. The hon. Gentleman mentions the NHS. The European Commissioner wrote to the former Trade and Investment Minister about the impact of TTIP on the NHS, saying:
“Member States do not have to open public services to competition from private providers, nor do they have to outsource to private providers.”
It is a decision for this Government, and nothing to do with any trade deal. She continued:
“Member States are free to change their policies and bring back outsourced services back into the public sector whenever they choose to do so, in a manner respecting property rights (which in any event are protected under UK law)”.
Geraint Davies
Does my right hon. Friend agree, though, that the essential difference is that ISDS tribunals are held in private, the primary focus being the investor and commercial and trading law, whereas a public court involves the public interest and transparency, which is intrinsically better? There are lots of cases where these big companies have claimed enormous damages, but I will not go into that. This is about the intrinsic shape of the system.
Mr Spellar
My hon. Friend and I will have to discuss this matter later. The problem is that such a process would require the creation of a supranational court, unless there was an agreement on reciprocity between the Supreme Court and the European Court, which might cause problems with Conservative colleagues.
There was very little controversy over CETA and the discussions with the Canadians, or those with the Koreans and all the other countries with which the EU has conducted trade talks, until we began discussions with the United States, which touched many people’s nerve endings and neurons.
Andrew Percy
The right hon. Gentleman is absolutely right that if we scratch beneath much of the opposition, we find blatant anti-Americanism. Does he agree that it is deeply offensive to the Canadian Government to describe CETA as a Trojan horse for TTIP, as if “little Canada” were doing America’s dirty work? That is the implication, and it is deeply offensive to Canada, a country with standards of protection that go beyond our own in many areas.
Mr Spellar
I thank the hon. Gentleman for a point well made.
My hon. Friend the Member for Swansea West then talked about China and, interestingly, about the environmental situation there. If the EU and the US do not do a trade deal to enshrine the current free trade and democratic liberal order, the Chinese will be the ones setting the parameters of world trade, and he has rightly identified that they might be much less concerned about issues such as workers’ rights and the environment.
With regard to the Canadian deal, my hon. Friend raised concerns about food and the implications for geographic indicators—Welsh lamb and so on. In fact, one of the great attractions not only for farmers in the UK but for framers across Europe, particularly southern Europe, is the provision for geographic indicators; and, to be frank, one of the attractions for Canada and the United States is the ability to sell GM, so a trade of GM for GI might well come out of these talks and be of advantage.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Will my right hon. Friend give way?
Mr Spellar
Unfortunately, the clock is running.
As I indicated earlier, the Leader of the House talked about scaremongering by the far left, and we have received emails again from 38 Degrees, which will no doubt be castigating me again on Facebook. Interestingly, its standard email this time had a link to a pamphlet by John Hilary of War on Want published by the Rosa Luxemburg Foundation. I excuse the ignorance of Conservative Members, but a number of Opposition colleagues might be aware of the dissident communist Rosa Luxemburg, if not necessarily of the Rosa Luxemburg Foundation and its deep links with Die Linke in Germany, the far left party that grew out of the old East German Communist party. There is a lot to be said against the old East German Communist party, but it was pretty good at propaganda and agitation. There are valid arguments to be made, but hon. Members must be clear about the driving force behind the campaign.
Unfortunately, the right hon. Member for Hitchin and Harpenden (Mr Lilley) touched on an area alluded to by my hon. Friend the Member for Swansea West: the European Scrutiny Committee. It was the neuralgic reaction of some Conservatives to anything involving the EU. Let us be frank: one of the key enablers of our conducting trade negotiations around the world is our membership of the EU. It enables us to negotiate through the combined strength of the EU, contrary to the views of Mr Farage, who believes we could somehow negotiate trade deals on our own. When we campaign next year to remain members of the EU, we will find that many of the arguments being made against TTIP reflect the arguments against the EU. In the modern world, there will be some trade of sovereignty for effectiveness and relevance, and that is why we should support the agreement.
Guto Bebb (Aberconwy) (Con)
It is a pleasure to follow the passionate speech of the right hon. Member for Warley (Mr Spellar). I apologise to the House for my voice; I hope it lasts for eight minutes, but if not I might sit down early.
I declare an interest: I am the secretary of the all-party parliamentary group on European Union-United States Trade and Investment. I am proud to stand here in support of TTIP. This is another example of how elements in British society are trying to close down debate. In August, my daughter, who is 14, left our house to do her paper round. She came back in and said there were 20 people picketing outside my house because I was the secretary of the all-party group. They were basically accusing me of wanting to kill people by selling off the NHS. If we are to have a debate about this, we should at least make it an honest debate and avoid intimidation. We have a duty to debate it openly and transparently, and intimidation has no part in that.
This is the fourth time we have debated TTIP in the Chamber. The hon. Member for Swansea West (Geraint Davies) has secured two debates, and the all-party group has secured another two.
Alex Chalk (Cheltenham) (Con)
Is not a danger that this debate is premature? The proposed agreement has not been reached, and before it could be ratified its text would have to be distributed to the 28 member states and this House, where proper scrutiny could be applied?
Guto Bebb
My hon. Friend makes an important point, but I do not think the content of the agreement is the issue; the issue is an anti-free trade agenda hiding behind TTIP. It is not a protest against a proposed trade deal; it is an attack on free trade.
We have heard about the so-called secrecy of the negotiations. It is true that the final text has not been released, but all the proposals are available online. If any Member or their researcher were to google “TTIP”, they would find the text of the negotiations. This is probably the most open trade negotiation we have ever entered into as part of the EU. When I hear these accusations of secrecy, therefore, I wonder whether people know they can google the issues being debated. The all-party group has held open meetings in the House, attended by 100 to 150 people, on the effect of the proposed treaty on the automotive sector, public services, textiles, and food and drink producers. To claim there has been a lack of discussion in the House is to make a false argument and to play into the hands of protesters who are against not the treaty per se but the concept of free trade.
Jonathan Reynolds
I am finding this debate quite interesting. I agree with the pro-trade sentiments of the all-party group on TTIP, but, to echo the comments of the right hon. Member for Hitchin and Harpenden (Mr Lilley), should not a decision about whether we accept hormone-treated beef in the UK lie outside the remit of a trade organisation and be a decision for the House?
Guto Bebb
As somebody who represents a Welsh constituency with a significant number of lamb producers, I want to see Welsh lamb offered for sale in north America, which is not currently the case. If the way to get that product into the north American market is through a European trade agreement with north America, I am willing to look at the detail of that agreement. I stress again that the remit for the negotiations was agreed by 28 member states of the EU. There have been two motions in the European Parliament. The EU trade negotiator has been to the House twice to explain the EU’s remit and how it is developing the agreement. So there has been an opportunity to engage, and the final agreement will be scrutinised as well. If there is concern about some of the concessions made, perhaps on a quid pro quo basis, those issues could be identified at a later stage.
It is important to address head on the so-called threat to the national health service—and I have to say that it is a so-called threat. I hope that every Member who speaks in this debate has read the detailed, three-page letter from the European trade negotiator to the Health Committee on 11 December 2014, which makes it very clear that there is no possibility of an impact on our health service, or on public services more widely for that matter, as a result of the TTIP agreement. It categorically states that
“all publicly funded public health services are protected in the EU trade agreements, and this approach will not change for TTIP.”
That brings us back to the crux of the issue and the point raised by the chairman of the all-party group—that the debate seems to be about the fact that we will be making an agreement with the United States of America. Let me state clearly as the secretary of the all-party group that I have had literally thousands of emails from all parts of the United Kingdom accusing me of all sorts of skulduggery in relation to this proposed trade deal. I was quite impressed by the fact that the people emailing me believed that I had far more power than I have ever had as a Back-Bench MP.
Guto Bebb
No, I will not take an intervention on that issue. The point needs to be made and it has been made.
We are clearly having a dishonest debate on this issue. Claims have been made that have not been substantiated and we have had accusations of secrecy that do not stand up to scrutiny. It is clear, too, that issues are being raised about ISDS, but I argue that that case was demolished by the right hon. Member for Warley. The hon. Member for Swansea West has offered no explanation of why not one of the 94 agreements has been the subject of any complaint to my inbox; we seem to have these concerns only because TTIP is a deal with the US.
I have now dealt with some of the concerns expressed by the hon. Member for Swansea West, but I think we should also look at some of the opportunities that will come from TTIP. My right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) was right that tariff barriers are comparatively low. It is clear from talking to regulators on both sides of the Atlantic—the European Union and the US—that the regulations are often not specifically there for the safety of the public in the US or the EU; they are there as a means to offer a protectionist stance for some industries.
It makes very little sense, for example, for our booming and hugely successful exporting car industry to undertake a crash test that is completely different in the US from that in the EU. The crash test is different because the regulations are different, and the effect is to add over £600 to the cost of Mini Cooper. The dashboard has to be changed to accommodate the mechanism for the airbags necessary to comply with US test regulations. Nobody believes that a crash in the US is any different from one in the EU, but the test is different—at huge cost to the car industry. If the TTIP agreement were to be secured and some of the regulatory burdens removed, there would be potential for a 7% growth in exports.
Similarly, when we talk about the need for a manufacturing-led recovery, it is difficult to believe the concerns of Labour Members when the opportunity arises to get rid of some of the counterproductive and anti-competitive regulatory burdens but they are not willing to work with manufacturing sectors to reduce them.
More importantly, the regulatory burdens are extremely unfair on small and medium-sized enterprises. Larger companies have the capacity to deal with the regulatory burdens in the US and subsequently to deal with the regulatory burdens in the European Union. The small businesses in my constituency have world-class products to offer, but are not in a position to sell them to the US because the regulatory burdens provide a barrier to their potential to trade. Small businesses that send packages online through the internet often find themselves in difficulty when dealing with the US because they do not know whether the rules and regulations applying to imports through the postal system into the US would be the same as they are in Europe. Again, larger businesses—the Amazons of this world—can cope quite easily with those challenges, but smaller businesses operating in my constituency cannot.
To talk about this agreement being one for large multinationals is to miss the point. The point of the agreement is to reduce the regulatory burden, which large companies are quite happy to impose because it closes the opportunity for small businesses to compete against them.
Rachael Maskell (York Central) (Lab/Co-op)
Will the hon. Gentleman give way?
Guto Bebb
No. I have only a minute left.
The fact that I have a drinks producer in my constituency who is unable to put in a second production line in order to get the correct bottle size is a classic example of the way in which regulations work against small businesses and to the advantage of larger businesses.
Finally, when it comes to being an MP from Wales, let me say categorically that the denial of Welsh lamb from my constituency to the US consumer is utterly disgraceful. The agricultural sector is broadly clearly supportive of this treaty. Yes, we need to scrutinise it; yes, we need to ensure that the House has a say in the agreement; but we should try to grab the opportunity for growth in all parts of the United Kingdom, and not least in Wales.
Christian Matheson (City of Chester) (Lab)
Let me say to the hon. Member for Aberconwy (Guto Bebb) that, irrespective of his views on TTIP, hon. Members and their families should have the right to security in their own homes. If he has been lobbied in his own home by protesters, I entirely deplore it.
I am in favour of free trade, which should be a good thing. It should create wealth and provide innovation in relation to jobs and markets, and it should promote existing services and products in new markets. I do not believe, however, that the proposed TTIP deal is about free trade; it is about increasing the dominance of several large globalised corporations that have no loyalty to any one particular country. Their loyalty is only to the next quarterly figures on Wall Street or the City of London.
We have talked about public services, and I believe that they will continue to be under threat unless we get a categoric response that they have been taken out. It is all being dealt with in secret, of course, so we cannot secure such a categoric response.
Let me deal with the investor-state dispute settlement, about which my right hon. Friend the Member for Warley (Mr Spellar) provided some interesting figures. There is a fundamental principle about ISDS that undermines its entire existence. We rightly preach the rule of law and democracy to the developing countries, but it would seem that it does not apply to large globalised corporations. However much I disagree with Conservative Members and however much I deplore some of their policies, the bottom line is that their party won the general election and I respect their democratic right to take its programme through Parliament. As I say, however, that democratic right does not apply to large globalised corporations.
If by some fluke on Friday night I win the Euro Lottery and buy myself a Ferrari or a Lamborghini—
Christian Matheson
Indeed, I shall buy myself a nice, top-of-the-range Range Rover. If the Government reduce the speed limit on the motorways to 50 mph, am I allowed to sue them because they have taken away my enjoyment in driving that car? It is exactly the same with TTIP. If the Government choose to change the law, it is their right to do so, and there should be no caveats for large corporations.
Andy Slaughter (Hammersmith) (Lab)
I am glad that my hon. Friend is addressing the issue of ISDS, which is of great concern. It was introduced, we were told, to give security to investors against weak legal systems in developing countries. Whether or not that is true—my hon. Friend has just made a good point—I do not believe that we have a weak legal system in this country, despite what the Government have done. The idea that the private law rights of multinationals should be put above the system that applies here is disgraceful.
Christian Matheson
My hon. Friend makes a good point, but I now wish to give an example of the perils that ISDS may bring. It involves another regime, but it could easily be transcribed into TTIP. Veolia has sued the Egyptian Government for alleged breach of a contract for waste disposal in the city of Alexandria on the basis of a bilateral agreement between France and Egypt.
At a time when Egypt is in a vulnerable and uncertain position politically, we should be helping it to develop democratic structures. When the Egyptian Government introduce a minimum wage that will probably benefit most ordinary Egyptians, we should support their action, but apparently Veolia has sued the Egyptian Government for taking that action. How stupid and short-sighted is it to sue the Egyptian Government and lower the standards of living of ordinary Egyptian workers at a time when we are trying to persuade Egypt that Islamism and the Muslim Brotherhood are not the way forward? This is an example of a western corporation undermining the wellbeing of ordinary people. That is what ISDS does: it enshrines the rights and priorities of globalised corporations over and above those of ordinary people, and the results could be catastrophic.
Mr Spellar
As I made clear earlier when I mentioned the Philip Morris case, lodging a case and winning a case are not one and the same thing, but my hon. Friend may be right. Has anything happened to the Veolia case?
Christian Matheson
I believe that it is still going through the process, but it is the principle on which the case is based that concerns me: the principle that corporations should have their own private mechanism for resolving disputes, rather than adopting the accepted legal procedures of the country in question.
Jo Stevens (Cardiff Central) (Lab)
Does not the ISDS system effectively constitute a private court staffed by private judges with private lawyers, based on private law for private profits?
Christian Matheson
What a shame that I am not as articulate as my hon. Friend. She has hit the nail on the head. ISDS is a mechanism that undermines the rule of law by giving a separate system to large globalised corporations and taking away from them any sense of responsibility to elected Parliaments such as ours, or to countries like Egypt where we may be hoping to foster and develop democracy.
Andrew Percy
May I just even things up? We are, I am sure, in the business of facts here. Far from ISDS being for the benefit of private corporations, it is a Government mechanism, agreed by Governments largely for the benefit of Governments.
Christian Matheson
I do not agree. I think that it is largely for the benefit of private corporations. The hon. Gentleman and I will have to differ.
I want an economic system that works for the people, not one in which the people work for the system. TTIP will enshrine the dominance of global corporations, which have driven down wages, moved jobs into areas where they think they can pay people less, increased personal and family insecurity, and—let us be clear about this—made tax-dodging into an art form.
Christian Matheson
I am about to end my speech, but I will always give way to my good friend the Member for York Central.
Rachael Maskell
I am grateful to my hon. Friend. Does he share the concern that the American Federation of Labour and Congress of Industrial Organisations has expressed about the North American Free Trade Agreement, which has brought about the loss of so many jobs and has had such a negative impact on the American economy?
Christian Matheson
My hon. Friend and I have known each other for a good few years, and we were both involved in the creation of one of the first global trade unions, along with American unions. The United States was mentioned earlier, and I am certainly not anti-United States, but my contacts in the American trade union movement are absolutely opposed to TTIP because they believe that their jobs and their terms and conditions—[Interruption.] The Minister says, from a sedentary position, that that is not true. I should like to know when she last spoke to any American trade unions, because I speak to them quite regularly.
I believe that the interests of the Conservative party are now enshrined in the large global corporations and the City of London. I believe that we could and should design a trade deal along the lines of TTIP that could benefit ordinary people, but TTIP is not that trade deal.
My right hon. Friend the Member for Warley (Mr Spellar) talked about the European Union. One thought has occurred to me, although perhaps I am wrong; no, surely not. TTIP could well be a Trojan horse for those who would have us leave the European Union. The EU, for all its faults, imposes social, economic and environmental constraints on corporations. TTIP would provide the free trade deal that is sought by so many of those who want us to leave the EU, without any of the social and environmental benefits.
Christian Matheson
I am about to sit down.
I worry about the possibility of a ready-made deal that would enable us simply to leave the European Union, withdraw from the requirement for social, environmental and employment protections, and then sign up to something that would involve no such protections. That is my fear, and I shall be watching the debate on the European Union carefully and with not a little suspicion.
Robert Jenrick (Newark) (Con)
I thank the hon. Member for Swansea West (Geraint Davies) for enabling us to debate this issue. I am very glad that we are having the debate, and that my right hon. Friend the Minister for Small Business, Industry and Enterprise will be responding to it.
I have a great deal of sympathy with the motion. While I think that we need accountability when it comes to one of the biggest trade deals in history—if not the biggest—and that the House should provide that accountability, I also think that few significant issues in politics today have been so poorly considered in the public realm. That may be due to a lack of knowledge for which, perhaps, we are all responsible. We, as parliamentarians, should play our part in trying to inform and educate the public as well as listening to them, so that everyone in the country understands the true nature of this deal. However, there has also been a huge amount of misinformation and distortion on the part of certain groups, and that has led to a general sense of concern. Like other Members, I have received hundreds of emails and letters about this issue over the last year or so. I believe that the concern is unnecessary, because there is far less to fear than those groups suggest, but a more important consideration is that it obscures, purposefully, the huge opportunity that this deal presents to all of us.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I think that the hon. Gentleman put his finger on it when he used the phrase “far less to fear”. He said that people did not understand the deal, but that is because it has not been properly explained to them. Some of them fear that there is a Trojan horse, but whether there is or not, we cannot move forward without consensus among the public, whether they are worried about jobs, about the environment, or about the precise contents of TTIP. If people do not understand something like this in a representative democracy such as ours, what can we do?
Robert Jenrick
The hon. Gentleman has made a good point. That is why I am pleased to see that the Minister is present, and why I was pleased when, on the occasion of our last debate on this subject—in 2014, I believe—my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) responded on behalf of the Government. I want more Ministers to convey the case for TTIP to the public, engaging in a genuine, informed debate, and trying to sell the deal in a rational way. At present, it is being led by groups who have come out with some pretty poor-quality public discourse.
Some of the emails that I received this week were fairly ill informed, to say the least. I suspect that they were generated by 38 Degrees. They were all the same, apart from the fact that the adjectives varied: the deal was variously described as dodgy, dangerous, evil and sinister. There could not be a more pathetic quality of debate. Let me say to those behind the emails, “For goodness sake, have the strength of your convictions: raise the quality of debate and argue rationally, rather being so immature.”
The Government must lead the debate. They must support a project which I believe has huge potential to build transatlantic links to bring Britain and Europe closer to America, and to create a huge and important new free trade area and myriad opportunities for jobs and growth. We are not necessarily talking about large corporations; as was rightly pointed out by my hon. Friend the Member for Aberconwy (Guto Bebb), this is about businesses both large and small. Only last week, I met representatives of some businesses that will benefit from this kind of deal. They were not large corporations, but small and medium-sized businesses that were trying to make a living and create jobs.
Mr Andrew Smith
What is the hon. Gentleman’s answer, however, to the concerns raised by his right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) about the real dangers TTIP presents of disproportionate corporate power being used to manipulate a bureaucracy which is not democratically accountable?
Robert Jenrick
I will come on to that now, because there are a few specific points I want to make, some of which have already been raised by other Members. One is about healthcare. This has been a political football on both sides of the House for far too long. As my hon. Friend the Member for Aberconwy said, the Health Committee wrote to the negotiators and received an incredibly comprehensive reply, which I would recommend to any Member. I have sent it to every constituent who has written to me about TTIP. I am not a friend of the EU—I am a Eurosceptic—so it is unusual for me to say that this is one of the most straightforward, comprehensive, honest answers I have ever seen from a European bureaucrat. I say this to other Members: “Please, if you haven’t read this, read it and send it to your constituents, because it does more to debunk the myths than anything else I have seen on this debate.” I will not rehash it, but I think it is incumbent on every Member of this House to read it and to appreciate how comprehensive it is and that it demolishes all those myths and scaremongering.
Overall, suppliers are already able to offer hospital services and health-related professional services through a commercial presence in the United Kingdom. The important thing for everyone who engages in the provision of health services and healthcare through companies in this country is that they have to comply with UK standards and regulations in the same way as British healthcare providers do. Those standards will remain under the sovereignty of this country and this Parliament, regardless of TTIP.
I appreciate that there is genuine concern about ISDS, but again I think it is fairly ill informed. I was a lawyer and the first case I worked on as a trainee solicitor many years ago was for a small British investor that had used a bilateral investment treaty very similar to this one to invest in eastern Europe. This perfectly legitimate UK company had seen its licence revoked illegitimately by that Government, and this small investor was able to use that treaty to get its money back and win justice. This is not about large corporations exploiting the system; it is about all investors around the world, including our own businesses being able to hold other Governments to account and ensure that they do not make arbitrary and poor decisions that negatively affect British companies.
As we have heard, ISDS is not a novelty. This is not some new threat that has recently emerged. These clauses have been put into most trade deals for years and years. I have heard the familiar examples of odd cases and inactions around the world, but these clauses have not had the effect that has been described in the media. As we have heard, 3,400 of these clauses have been inserted into trade deals globally. The EU and its members have 1,400 such clauses in various trade deals, and the UK has 94 in our existing bilateral treaties. We have twice been challenged and we have never lost a case under an ISDS.
What we have done, however—this is an important point that has not been made—is successfully bring claims against other countries. We have had slightly more success in that regard because the point of an ISDS is to underline the value of the total agreement and make sure no individual investor or business can be disadvantaged by another Government or union of Governments breaking the obligations they have entered into and negatively affecting our own businesses and investors, large and small.
It has been said that these treaties have primarily been used in developing countries, such as in the case I just mentioned, where potentially the legal system was not as good as ours or that of the United States, but of course although the US does have a very good legal system, it is a very expensive legal system where cases can take a long time. I actually think that this would be a very useful device for our small and medium-sized companies.
Similarly, there are states in the EU—some southern European countries, for instance—where American investors I have met and spoken to over the years would be very reluctant to sail into if they had to rely entirely on taking matters to the legal processes of those states to challenge the bona fide of local officials in respect of whether they were complying with the agreement. On both sides of the Atlantic, although there would be very few cases, I think they would generally be beneficial.
I was going to talk about transparency, but nobody could have put that point better than my hon. Friend the Member for Aberconwy, and of course a degree of secrecy and confidentiality is important, because the US has very good negotiators in trade talks, and we want our negotiators in the EU, which is in a difficult position being a union of 28 nation states and Governments, to be in the best possible position in these talks, and not simply give everything away. This is one of the more transparent trade deals we have seen, and certainly one of the most transparent the EU has done, and the commissioners are trying to be as forthcoming as possible.
This free trade deal is, as we have heard from at least some Members, a huge opportunity. The United States is not a threat to us; it is the UK’s single biggest export destination. Some 17% of our exports go there, and it is important for a whole range of our sectors, such as aerospace, as we have heard about, the creative industries, and the luxury goods industry. The UK is a world leader in that, and America is home to more affluent households with disposable incomes of more than $300,000 than any other country. It is a huge market, therefore.
Only last Friday I visited a business in my constituency that is trying to put hearing loops into the New York metro, but is having to spend thousands of pounds to meet the various and complex regulatory burdens involved.
Richard Arkless (Dumfries and Galloway) (SNP)
On that point, would the hon. Gentleman try to persuade his Government colleagues that the US should lift the ban on haggis, and would he welcome that?
Robert Jenrick
That is a very good point and I certainly would welcome that. I want to see British businesses from all parts of the United Kingdom getting into those markets and creating jobs.
We have heard that tariff barriers are now quite low—down to around 3%—but it is the non-tariff barriers that need to be pushed aside for the benefit of businesses like those in my constituency, and TTIP offers a huge opportunity to create the jobs and growth of the future. It is a massive potential win not just for our constituents and businesses, but for humanity as it offers an opportunity to bring the west together to protect our economic and national security.
Peter Grant (Glenrothes) (SNP)
Like most of the other speakers in this debate, I am instinctively in favour of trade. Scotland has got a fantastic story to tell given the world-class quality of so many of our goods and services. We want to be able to sell them around the world, and I think that those around the world want to be able to buy them without restrictions. We should instinctively support the principle of free trade, but completely unregulated free trade is not an unmixed blessing.
We have to ask ourselves who ultimately free trade is there to benefit. Is it there to benefit a handful of major corporations, is it there to benefit a handful of well-placed people with the ear of particular Governments, or is it there to benefit the citizens who produce the wealth for all those businesses? I know where my loyalties would lie, and at the moment I am not at all convinced that free trade as envisaged in TTIP is going to give the benefits to the correct place.
We should remember that what we are being asked to agree today is not that TTIP is a good idea or a bad idea, but that TTIP should, before being set in law, be brought back and properly scrutinised and debated in this Parliament, and I would argue in the Parliaments of other EU member states as well. I find it ironic that the party whose leader is going around Europe right now arguing for better protection for the alleged sovereignty of this place in dealings with the EU also seems to be saying to us that we can trust EU officials to sign us up to trade deals and we do not need to bring the deal back to this Chamber or anywhere else in this place for it to be considered and scrutinised. Yes, there will eventually be a binding vote in the European Parliament, but there should be a proper, well-informed debate and a vote in this Parliament at the very least to give a clear indication to UK MEPs as to how we would like them exercise their vote.
Owen Thompson (Midlothian) (SNP)
Does my hon. Friend agree that one of the biggest concerns about the whole process is the lack of transparency? Nobody knows exactly what is happening.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
It is on the internet!
Peter Grant
My hon. Friend makes a good point. I hear the comment that it is all on the internet, but I hope that when the Government respond, or when someone responds on their behalf, they will be able to explain the following to us: if it has been on the internet and has been so widely available for so long, why is it that MEPs have been given the opportunity to scrutinise it for only the past week? That is being done not in an open debate, but in a closed room where they are allowed to take handwritten notes but are not allowed to take photocopies of that document out of that room to show to their constituents or to anybody else. Why is the EU insisting on that degree of secrecy if the whole thing is already widely available on the internet?
Peter Grant
I am sorry, but I would like to make a bit of progress.
I entirely agree with the calls from across the House asking for an open and honest debate. I agree that it is deprecable if any politician or their family is subjected to intimidation because people disagree with their point of view, no matter how sincerely or passionately that disagreement might be held. However, the same people who are calling for an open and honest debate have also dismissed everybody who has concerns about TTIP, including the hon. Members for Stone (Sir William Cash) and for Clacton (Mr Carswell), as being part of some left-wing campaign. These people seem to think it is a bad thing that an organisation has made it as easy for ordinary citizens to lobby their MP as it has always been for multinationals, which get managing consultants and lobby consultants to do it for them. It seems that we have gone from being a “left-wing campaign” a few minutes ago—I have been a part of pretty few left-wing campaigns and I sometimes think we could do with some more of them—to being completely “anti-American” and then completely “anti-western”. The last time I checked I was a westerner. The only anti-western person in my household is my wife, and she is anti-western only to the extent that I am not allowed to watch cowboy and Indian films.
George Kerevan (East Lothian) (SNP)
On this anti-western argument, does my hon. Friend agree that the American trade unions are just as vociferous in demanding safeguards, in particular the removal of the investor clauses?
Peter Grant
My hon. Friend is absolutely right; this is not a case of America wanting to push everything through and Europe wanting to stand in the way. There are vociferous supporters of TTIP on both sides of the Atlantic, but there are also those who have genuinely held concerns, not only in left-wing organisations, but in some business organisations, among some people, such as those I mentioned, who are certainly not left-wing politicians in this place, among trade unions, and in that well-known bastion of left-wing activism the British Medical Association, although the Government have dismissed it in those terms previously.
We are talking today not specifically about the merits or demerits of TTIP and its associated potential agreements, but about where decisions should be taken on whether TTIP goes ahead. It would be a bit ironic if Members who have taken the time to come here to take part in the debate on whether we should have a debate on TTIP voted at the end of the afternoon not to have a debate about it. I am therefore assuming that there will be no need for a Division.
Concern has been raised about the ISDS, which we are told has now been completely replaced by the international court of something or other. We do not know exactly how that is going to operate as yet. My question is: why is it needed? Ordinary citizens who are aggrieved about the actions of the Government in their own country can try to rectify that through the democratic process, and I commend 38 Degrees for making that a bit easier for those who cannot afford their own lobby consultants. If they feel aggrieved that the Government have acted in a way that is against the law, ordinary citizens have recourse to the legal system within their own country or within the country of the Government whom they think has acted against them. The legal system is imperfect and so is the parliamentary democracy system, but they are available to ordinary citizens. Why does a big multinational company need a further line of recourse which is not available to ordinary citizens? Why does a citizen whose family were hounded out of Zimbabwe in fear of their lives not have recourse to compensation through the international courts, yet a multinational company that is unhappy that its profits from selling tobacco in some countries may be reduced has access through an international tribunal? Why do ordinary citizens not have that? Why is that tribunal needed in the type of country that we claim to be, where there is a mature legal system, and the courts system is designed to be impartial and to give everybody a fair hearing? If the concern is about southern Europe, I point out that the nations of southern Europe are part of the European Union.
Guto Bebb
I find the hon. Gentleman’s comments fairly imperialistic, because the implication would be that we do not need this sort of mechanism in a deal with the United States, because we have mature legal systems, but if we are having these deals with a third world country, we may need it. I find the comment odd.
Peter Grant
The point I am making is that there could be concerns about the maturity of the legal system of some countries with which we might want to enter into international agreements. The example given earlier was countries in southern Europe, but the last time I checked they were part of the European Union. If they are acting in breach of a treaty that has been signed up to by the EU, I would have thought that there would be recourse through the European courts. If there is not, perhaps that needs to be looked at. I fail to see why it is necessary to have a separate form of recourse for companies that want to sue sovereign democratic Parliaments and Governments, one that is not made available to citizens of the countries who have elected those Parliaments in the first place.
Robert Jenrick
The hon. Gentleman is making a decent point, but the UK is already in bilateral investment treaties with a range of other countries around the world that have mature democracies, and some of these treaties have ISDS arrangements. The EU, including the UK, has just signed up to one such treaty with South Korea. Is he suggesting that we withdraw from all those bilateral investment treaties around the world, including important ones such as the recent one with South Korea?
Peter Grant
I am not suggesting that at all. I suppose the question might be: if the ISDS has been so successful, why is it being scrapped and replaced by something else?
One final observation that I want to make is that although the Government clearly regard completion and ratification of TTIP as being a major selling point for staying within the EU—I believe the Foreign Secretary said as much before the European Scrutiny Committee—a sizeable body of public opinion in the UK takes the opposite view. I do not know how sizeable it is, but it is there. There are parts of the UK, including a lot of areas in Scotland, where people want to be part of the EU but will change that allegiance if TTIP goes ahead. That might be music to the ears of some Members, but the Government may be making a massive tactical mistake if they believe that support for TTIP will persuade more citizens to vote to remain in the EU. There is a serious danger that it will actually have the opposite impact. The tragic irony of it is that if TTIP is already done and dusted before the EU referendum, people will vote to leave the EU and then discover that they are still lumbered with TTIP for 20 years, because once we have signed up to it even our leaving the EU does not allow us to get out of it.
I make an appeal to Members, and this applies regardless of whether they have already decided in their own minds about the merits or otherwise of TTIP and whether they think it is a good or bad idea. Once we know the full details of what TTIP and its associated agreements are going to mean, surely we must have a proper and full debate in this place, and in the Parliaments of the rest of the EU, at least in order to give MEPs a clear steer as to how they should be exercising their vote in the binding decision that they will take at some point in the future.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. He will have to stand up, but I call Andrew Percy.
Andrew Percy (Brigg and Goole) (Con)
I had forgotten how to do it, Mr Deputy Speaker. When I turned up for this debate, I was not intending to speak, but I have been drawn into doing so, having listened to some of the arguments made by Opposition Members. [Hon. Members: “There were not enough speakers!”] That may be a factor as well. Let us start by talking about the things we agree on. It was reassuring to hear Opposition Members talk in favour of free trade and in support of trade. I want to see Welsh lamb sold in the United States, although it is not as good as lamb from Yorkshire and Lincolnshire. I even want us to export haggis, that great north of England foodstuff that we exported to Scotland in about the 15th century. I want to see that sold in the US in the right form—not with the bits missing that must be missing for it to be sold there at the moment. We can all agree on those things.
Drew Hendry
On that point about Scottish and other produce being taken forward, does the hon. Gentleman agree that the Scottish Government should be involved in the ratification of any detail of TTIP before it is implemented ?
Andrew Percy
I was questioning the Scottishness of haggis. Of course, the mechanism for determining this treaty is well set out. It will be determined in the national Parliament of the United Kingdom, as it should be, just as it will be determined in the national Parliaments of the 27 other member states. The turnout of Scottish National party Members today is impressive, as it is in a lot of debates. It certainly could not be said that the voice of Scotland on this will not—
Steve McCabe (Birmingham, Selly Oak) (Lab)
Will the hon. Gentleman give way?
Andrew Percy
No, I am still responding to this point. The voice of Scotland is going to be heard strongly and loudly on this issue, as it is on so many others.
I just want to talk about—
Andrew Percy
No, I will not give way. I have changed my mind.
I just want to talk about CETA for a moment. What the hon. Member for Swansea West (Geraint Davies) said about it being a Trojan horse is slightly offensive to the Canadian Government.
Andrew Percy
The hon. Gentleman did not give way to me, so I will not give way to him.
Andrew Percy
Perhaps the hon. Gentleman wants to say that it was not an insult. To use the term “Trojan horse” suggests that the Canadians are in some way being used as a battering ram for the Americans, which is quite offensive. CETA in Canada has the support of the new Government, just as it did of the previous Government.
Much has been said about transparency. The theories on that have been well and truly demolished by my hon. Friend the Member for Aberconwy (Guto Bebb) who quite rightly pointed out that the text of what is being debated is available, and that, at the end of this process, there will be a mechanism for approval in all 28 national Parliaments. One could argue that few things that affect us are subjected to quite so much scrutiny. I am not sure that I can subscribe to the argument of the hon. Member for City of Chester (Christian Matheson), which seems to be that the process of agreeing TTIP could be some sort of conspiracy with regard to leaving the European Union. I did not follow that argument, as it made little sense to me.
John Redwood (Wokingham) (Con)
Does my hon. Friend agree that, given the big interest of many of our constituents in what could go wrong with TTIP, it is vital that the UK has both a strong influence and the right to say yes or no, as these are very important matters for our goods and services?
Andrew Percy
I could not agree more with my right hon. Friend. Indeed, I agree with him on so many matters. The issue will come before this House. As I said in an intervention, there is an element of anti-Americanism in this. I am not saying that that is being expressed by those in the Chamber today, but it did come across in an email to me. I do not hear much from 38 Degrees. The people of Brigg and Goole are too busy just getting on with their lives to waste their time forwarding me emails that are written by somebody else, telling me what their view is. I did have an interaction with someone in which I pointed out this view about anti-Americanism. There was then a trail of emails, in which I pointed out that we had all these ISDS agreements with 94 other countries, and that had only been used against us on two occasions, and never successfully. The trail ended with my constituent, who had assured me in his first email that he was not anti-American, saying, “Ah yes, but the other agreements have not had American lawyers involved.” Clearly, there is an element of anti-Americanism involved, and we should not pretend otherwise.
Andrew Percy
No, I will not give way, because I will not get any extra time. [Interruption.] I have a lot to say.
I could not disagree with anything my hon. Friend the Member for Aberconwy said. He made a fine speech, despite his hoarse voice, on the impact on small businesses. I represent an area that is a mix of big industry and small and medium-sized enterprises. Again, a constituent contacted me with something from 38 Degrees. I was robust with him on this position on TTIP, as I have been since I came to this House in 2010. I explained that it is of benefit to small businesses. His response was, “Well, I run a small business, and I have tried to do trade in America, and it is really very, very hard.” That is exactly my point. Those are the people who will benefit most from this agreement.
I represent an exporting centre in this country. A lot of small and medium-sized enterprises have great products to offer, but only a big corporation can afford all the skills and people necessary to navigate the regulatory difficulties; others can struggle, so this agreement will be of benefit to them.
I wish to say something about the impact on the NHS. Some of the scaremongering has been really scandalous. We looked at this matter in the Health Committee, as my hon. Friend the Member for Newark (Robert Jenrick), who is on the Committee, mentioned. We put a series of specific questions to Jean-Luc Demarty, who is the director-general for trade in the European Commission, and his responses could not have been blunter. It is worth while me reading them out for the record. We asked:
“Is it the EU’s negotiating position that publicly funded health services should be excluded from TTIP”?
The answer was very clear. He said:
“This is the effect of the EU's approach to public services in all trade negotiations since the General Agreement on Trade in Services (GATS) in 1995.”
He went on to say:
“It is also worth explaining that even without the above reservations and exceptions, the EU trade agreements leave EU governments at all levels free to regulate all services sectors in a non-discriminatory manner...Therefore, in effect all publicly funded public health services are protected in EU trade / agreements, and this approach will not change for TTIP.”
We were not satisfied with that answer, so we asked another question:
“What would be the consequences for the provision of NHS services, including hospital, primary care and community services, if they were not specifically excluded from TTIP?”
Again, the response was clear:
“in effect all publicly funded public health services, including NHS services, will be protected in TTIP.”
We asked again:
“Does the definition of public-funded Health Services include private companies who run such services paid for from public funds? Does it include third sector organisations?”
The answer was:
“Yes, as long as the services are publicly funded, it does not matter how they are delivered.”
They will enjoy the same protections.
We get a lot of nonsense from the EU, but the answer to this next question could not have been simpler. We asked:
“Is there any opportunity after the exclusion of any public services from TTIP for other countries to challenge that exclusion and, if so, what is the process?”
In other words, can they challenge the exclusion of the NHS? The answer was, “No”—with a big fat full stop after it. It could nothave been clearer. Another question was:
“Is there any action that a Member State can take outside the negotiation process to ensure that health or any other public services are exempted from the provisions of TTIP or any other trade agreement?”
The director-general said:
“As above, in the Commission’s view there is no need to take any further action to ensure this result, as public services are always protected in EU trade agreements.”
We received similar answers on charitable providers and when a national Government take back in a service. So, this nonsense being perpetuated about the risk of TTIP to the NHS is shameful. It is about trying to present an image to people in this country that big, bad, nasty American healthcare providers, which are only about profit, will come in and sweep up the NHS for private profit. Nothing could be further from the truth, as has been made clear by US negotiators. One US negotiator was really clear about this. He specifically mentioned the UK and said that TTIP is not a way of the US trying to get access to the publicly funded health system in the United Kingdom. The EU trade negotiator was very clear. He said that the service was wholly excluded already. It does not matter whether the service is privately provided, charitable-sector provided or publicly provided—it is all protected.
When people run around campaigning against TTIP and raising legitimate concerns—and there have been some legitimate concerns—about the process and ISDS, the one thing they must not do is frighten people and say that this is about American businesses coming in and destroying the NHS. The response from the EU—I never quote the EU because I do not like the EU, and I am campaigning for us to leave it—has been absolutely clear on this: the NHS is safe, whether or not there is TTIP. The only bodies that can cause any damage to our NHS, and challenge this in the way that those who oppose TTIP say, are national Governments. Governments are in a position to do the damage to the NHS, but in England, that is not happening because we have an excellent Government doing good things for the NHS. In other parts of the UK, that might be up for debate.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. Before I bring in the next speaker, I will have to reduce the limit to seven minutes. I call Helen Goodman.
Helen Goodman (Bishop Auckland) (Lab)
I wish to begin by congratulating my hon. Friend the Member for Swansea West (Geraint Davies) on securing this debate. I am very grateful to him for asking me to support his application to the Backbench Business Committee for this very important debate, and I agreed with everything that he said about the risks of TTIP and about the need for us to think more deeply about the institutional architecture as we move forward, so that trade, environment and labour standards are all put on an equal footing.
I also want to say what an excellent speech my hon. Friend the Member for City of Chester (Christian Matheson) made. He drew out the problems that similar arrangements have caused in developing countries. The point that he made demonstrated that those of us who are raising questions are fully in the tradition of all those who back the human rights and democratic values of Europe and America.
The Department for Business, Innovation and Skills has analysed the benefits of TTIP. Its estimate is that the gain in this country by 2027 in terms of higher GDP would be £7 billion. When one hears the figure of £7 billion a year, that sounds like quite a lot, but let me put it in the context of the amount of trade we have in this country and the huge uncertainties about the forecasts as we go forward.
Kelvin Hopkins
I just want to make the point that statistics are bandied about for political advantage. My hon. Friend is quite right about the £7 billion, but how would it compare with the £62 billion of trade deficit with the European Union? Those are the kind of figures that make £7 billion very small indeed.
Helen Goodman
The point that I was going to make was that the Office for Budget Responsibility, in its forecast of GDP out to 2020, has an uncertainty of 6% in GDP. That is £160 billion, so we lose the £7 billion of economic benefits in the rounding. I am not saying that there will not be some economic benefits, but we should consider how significant they are and weigh them against the disadvantages that other hon. Members have mentioned. Will this have a significant benefit for our level of exports? By way of comparison, the impact on the level of growth in the markets to which we export is expected to be £338 billion over the next five years. If we have variations in the exchange rate, that will be far greater than the possible benefits we can get from this trade deal.
I am resting my case on the analysis from the Minister’s Department. On the assumption that the Department has got this right, each person in this country would benefit to the tune of £110 a year, or about £2 a week. It is very nice to have £2 a week and I am sure that we would all rather have it than not, but if the price that has to be paid is a loss of working conditions, labour standards and potential improvements in the national minimum wage or national living wage, the benefits will not in practice accrue to ordinary people in this country. That is why people have doubts about this.
Colleagues have raised the concerns about the national health service, the environment and food standards. I think that the carve-out in the European Commission’s negotiating mandate secured by the French on audio-visual services is extremely important; it is also important that we maintain our cultural resources.
Let me come to the big downside of TTIP, which is the loss of sovereignty inherent in the investor-state dispute settlement. The intellectual integrity and honesty displayed in the speech of the right hon. Member for Hitchin and Harpenden (Mr Lilley), a former Secretary of State for Trade and Industry, made it a very important contribution to the debate.
Mr Spellar
Is not the logic of the right hon. Member for Hitchin and Harpenden (Mr Lilley) just as much that he would rather we were not involved with the EU either, as another supranational body? Is there not a danger in this line of argument?
Helen Goodman
There is nothing in our arrangements with the EU that is similar in any way to the private court system under the ISDS. That was the point that the former Secretary of State was making.
My right hon. Friend the Member for Warley (Mr Spellar) said earlier that not many cases have been taken under ISDS or won under ISDS, but it inhibits ministerial action because Ministers are worried about court cases. My hon. Friend the Member for City of Chester made the point that in developing countries the costs of running these court cases are a further inhibition on ministerial and democratic action.
Geraint Davies
Does my hon. Friend not agree that in most ISDS cases, we are the investor in developing countries, and we would be the ones to take action? In the American cases, they would be taking action against us. We have all the fire to come.
Helen Goodman
My hon. Friend makes a fair point, but I just want to say that I think that Ministers are inhibited from taking policy action by fear of court and legal proceedings. When I was a Minister at the Department for Work and Pensions, albeit a very junior one, I was interested in considering the entitlements to benefits of migrants from eastern Europe. My officials not only would not make the changes I was asking them to make, but would not even give me advice on the matter. They said, “Minister, to advise you on that would be to advise you on an illegal action.” That is exactly the kind of conversation Ministers will get into with the ISDS.
Helen Goodman
I am pleased to see the right hon. Gentleman nodding in agreement.
Robert Jenrick
The UK has 110 bilateral investment treaties, almost all of which have ISDS, including with some very sophisticated countries such as Singapore and Hong Kong, where the legal system, certainly for commercial cases, is acknowledged to be excellent and akin to ours. Is the hon. Lady saying that the UK should withdraw from all or some of those bilateral investment treaties, on the basis of her previous experience as a Minister?
Helen Goodman
I am not saying we should withdraw. Perhaps we should have more parliamentary scrutiny of what is going on under the arrangements we have; perhaps we are shedding a light on them; and perhaps we should be grateful for those constituents who have alerted us to the issue. I am grateful not because we have to accept every single message in its last detail, but because they have triggered my looking into this more deeply.
Lack of transparency in the negotiations, weak parliamentary scrutiny and the risks mean that it is very important that we do not agree to this measure unless we strip out the ISDS. I am extremely pleased to support the motion this afternoon.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I last spoke on this issue in February 2014, and I started out, as I will now, by noting that Wales is a proud exporting nation, despite recent setbacks. Wales outperforms the other component parts of the UK, and according to HMRC statistics we have a trade balance of £5.86 billion based on 2014 figures. By contrast, England has a deficit of £125.6 billion.
Despite recent setbacks in Welsh exporting figures, the potential of a trade deal for Wales is hugely significant, but it should not come at any price. The cost should certainly not be the destruction of public services or environmental and safety standards, or the subversion of public justice to one law for corporations and one law for everybody else. I should state from the outset that I am in favour of further developing trade links between the EU, which is already the world’s largest trading bloc, and the United States. However, I still have many reservations about the proposed TTIP, despite the recent attempts by the European Commission to allay those concerns by proposing alternatives.
It is a great irony that the UK Government are dead set on ploughing ahead with TTIP while at the same time jeopardising the future of Wales and the UK within the EU with a referendum conceded in panic by the Prime Minister when UKIP were hot on the Tories’ tails. I see that the renegotiation is not going as well as he planned and I suspect that the charade of Tory unity on this issue will disappear very rapidly as the referendum approaches.
Guto Bebb
Is the hon. Gentleman not concerned that the attacks on TTIP, which is being negotiated by the European Union, are in effect undermining our relationship with the European Union? Is it not the case, therefore, that some of these outspoken attacks are more damaging to the position that he supports, which is continued Welsh membership of the European Union?
Jonathan Edwards
I am grateful for that half-clever intervention. The biggest danger to our relationship with the EU is Tory policy on the needless referendum that we will be having in the next year.
When I spoke on TTIP 22 months ago, I set out many of the concerns that I and my party, Plaid Cymru, had regarding the proposal as it stood then. I set out our concerns about the highly controversial ISDS as well as the potential for the agreement to allow for the privatisation of public services despite the public’s desire to keep those services in public hands, not to mention the concerns over lowering environmental and safety standards through so-called harmonisation.
The economic benefits of TTIP are contested. A study for the Department for Business, Innovation and Skills estimates that the gains for the UK would be £4 billion to £10 billion annually by 2027. However, the average tariffs on trade between the EU and the US are already relatively low. Therefore, many of the proposals within TTIP and much of the negotiation are centred on non-tariff barriers to trade, such as product regulation and standards, which would need to be harmonised, and measures to protect the rights of investors.
Rachael Maskell
Does the hon. Gentleman agree with the Tufts University analysis of TTIP, which concludes that we would suffer a net loss as a result of the proposals for the future of our economy?
Jonathan Edwards
I have not read that report, but I take the hon. Lady’s word for it.
The estimates overstate the gains, and alignment of regulatory standards in areas such as consumer safety, environmental protection, procurement and public health could have substantial social costs. Wales’s existing trade with north America has grown rapidly over the past decade and a half as a share of our overall exports, without TTIP in place. Of course, a trade deal could help to grow that even further, but that should not happen at any social cost, and certainly not at the risk of further hollowing out Wales’s industrial base. Any trade deal that does go ahead should definitely not be a large corporation closed shop in relation to trading across the Atlantic, as TTIP most definitely appears to be at present. Some 99% of Welsh companies are SMEs, making up the backbone of the Welsh economy. In any trade deal they deserve as much of a look-in as the big companies.
Alongside the potential for the default privatisation of public services such as health, the most controversial element of TTIP so far has been the ISDS provisions, which would allow investors to bring proceedings against Governments who are party to the treaty. The proceedings would be heard in tribunals outside the domestic legal system, meaning that Governments might determine policy with an overriding fear of being sued by corporations—a point made earlier. I said the last time I spoke on TTIP, and I will say again, that the US and the EU already have advanced legal systems. Neither is a banana republic, and corporations should abide by the same well-functioning legal system as the rest of society.
Throughout Europe, including here in Wales and the UK, Governments have been listening, and the UK Government and the European Commission have sought to allay concerns via a new proposal for an investment court system, published only last month. It appears, though, that they are only changing the name. My original point is relevant and remains valid. We already have a highly advanced court system in existence in all the places within the reach of the proposed trade agreement. The proposals for any alternative shadow legal system should be dropped immediately. Not to do so is an affront to democracy.
Given that public services are devolved, the devolved legislatures and Governments of the UK should have a veto over TTIP.
Jim Shannon (Strangford) (DUP)
I want to put on record how TTIP could affect NHS contracts. We in the Democratic Unionist party are totally opposed to it for that reason. We also oppose ISDS. As health is a devolved matter, we want to put it on record that it should be the regional Assemblies and Parliaments that make the decisions, and the Government should liaise closely with them. Does the hon. Gentleman agree?
Jonathan Edwards
I entirely agree with the hon. Gentleman. I am sure there will be some collaboration on the issue between Northern Ireland, Scotland and Wales in the near future. Those areas of public service delivery are the competencies of those Administrations. They might have a different agenda from the UK Government, and devolved Administrations should be fully consulted on and fully involved in any ratification of TTIP by the UK Government.
I am grateful to groups such as Global Justice Now and the Council of Canadians as well as Unison for bringing to my attention CETA, the comprehensive economic and trade agreement between the EU and Canada, often referred to as TTIP’s little brother. Although there is much public awareness of the TTIP negotiations, CETA is on the verge of being ratified but is not receiving the scrutiny or attention it deserves. CETA includes the most controversial part of TTIP, investor -state dispute settlement. Many US firms have Canadian subsidiaries, thereby allowing US firms to operate in the EU market. Public services are vulnerable because CETA locks in current levels of liberalisation, meaning that future Governments will find it extremely difficult to stop Canadian companies delivering public services in the EU. CETA is due to be fully ratified in mid-2016, and I urge the UK Government, the Welsh Government and the public to reject this deal unless the safeguards that I have outlined in relation to TTIP are put in place.
The public and politicians should also be aware of the Trans-Pacific Partnership, which is little known over here. Again, the criticisms of this proposed deal bear the hallmarks of TTIP and CETA—secrecy, and the fact that large corporations will exert undue influence over public policy through shadow legal systems.
In conclusion, I am still optimistic that a trade deal aimed at further reducing tariffs in order to secure a level playing field can be achieved, and I believe it would benefit Welsh exporters and our economy as a whole. Many of the environmental standards that the EU requires from its producers and manufacturers should not be compromised. They are already above and beyond those required in the US, placing us at an advantage without the potential social costs that would result from the proposals that are the areas of major concern. In order for any trade deal to have my support and that of Plaid Cymru and the wider public, it must unquestionably drop any proposals for a shadow corporate legal system and ensure that the EU’s existing environmental and social safeguards are maintained.
Kelvin Hopkins (Luton North) (Lab)
I congratulate my hon. Friend the Member for Swansea West (Geraint Davies) and other colleagues on securing this important debate. I also congratulate my hon. Friend the Member for Bishop Auckland (Helen Goodman) on her speech. Like her, I agree with much of what the right hon. Member for Hitchin and Harpenden (Mr Lilley) said in a very honest speech.
I am of the left. The Conservatives accuse some of those who oppose TTIP of being on the left. Well, I am of the left. I call myself a democratic socialist, but as our party defines itself in its constitution as a democratic socialist party, I think I am in the right party and I am happy and proud to be so.
Those who support TTIP should read “Fighting TTIP, CETA and ISDS: Lessons from Canada” by Maude Barlow on behalf of the Council of Canadians. Everything they say will be shown to be wrong when they read that.
TTIP must be opposed with all possible force as a dangerous attempt to negate meaningful democracy. It is designed simply to hand economic power to global corporations and to prevent democratically elected Governments from acting in the interests of their peoples. It has been negotiated largely in secret between private corporate representatives and bureaucrats, with no real democratic political involvement and certainly no representation from workers and their trade unions. On the continent of Europe millions of workers are aware of the dangers, and it is vital that the people of Britain, especially the working people of our country, also become properly aware of the dangers before it is too late.
I mentioned Europe and have seen evidence of the growing resistance to TTIP there. I was recently in Brussels, on the day of the European Council, when the Prime Minister announced his intention to write his famous letter to Donald Tusk. What was also significant on that day was the complete lock-down of the political centre of Brussels to protect politicians from a massive anti-TTIP demonstration. There were police road blocks at every turn, with water cannon at the ready and public transport services in the area closed down. I could not persuade a taxi driver to take me anywhere near my destination, and the metro was not stopping at the station serving the political district. Most significantly, there seemed to be an effective news blackout of the demonstration, so the political and bureaucratic establishment was doing its bit to protect the interests of the corporate capitalist world.
There will, of course, be all sorts of public reassurances from that same political establishment that TTIP will be benign and beneficial. That is a lie. If TTIP eventually becomes established, there may be some superficial qualifications, which will simply be pushed aside when the private corporations get their way. There is a parallel in the European Union’s hypocritical and empty commitment to workers’ rights and trade union rights—the sham of so-called social Europe. The Viking and Laval cases show that when push comes to shove, employers’ rights override any supposed worker rights. The Greek bail-out required the Greek Government to restrict trade union and worker rights as a condition of the bail-out, and there is more of that to come.
Now we see the nomenklatura of the European Union seeking to sell out workers’ rights, trade union rights and citizens’ rights to control their own lives and their societies through their elected democratic Governments. We are moving towards the referendum on Britain’s EU membership, and millions of trade union votes will be a significant factor in that referendum. The TUC is strongly opposed to TTIP and my own union, the GMB, is likely to recommend a vote to leave the EU if TTIP goes ahead. If 6 million public sector trade unionists fear that TTIP is going to happen, with the likely threat of privatisation of our public services without redress, and the threat to the services they provide and their livelihoods, they will vote to leave the EU.
I have argued that the EU is fundamentally anti-democratic, although some of my colleagues may disagree. If the Commission does a deal with the US and the corporations, that will confirm what many of us believe—that the EU is an agent of the global private corporate world.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The hon. Gentleman talks about the threat to public services. Given that the people of Scotland were told by the Better Together campaign that the best way to protect Scotland’s NHS was to vote no in the independence referendum—the People’s NHS is organising a very effective campaign in Scotland—does he agree with the position of the First Minister, who has asked the Prime Minister specifically to exempt the NHS from TTIP?
Kelvin Hopkins
I would certainly support that.
Over 10 years ago Tony Blair wined and dined American health corporations in Downing Street as a prelude to what has been happening. Private companies, with the connivance of the current Government, are even now buying into bits of the national health service to make a profit, cherry-picking the most profitable bits and leaving the difficult bits for the public sector. I believe that it is time for us all, especially in the Labour party, to wake up to the dangers and reject TTIP before it is too late.
Ronnie Cowan (Inverclyde) (SNP)
I commend Conservative Members for sitting through this entire debate; if I had gold, silver and bronze medals to hand out, I would have one medal too many.
I agree with the general principles of the motion. It is entirely appropriate for an all-encompassing agreement such as TTIP to be scrutinised by elected representatives in this House and in the European Parliament. As Members are aware, negotiations on the agreement began in July 2013. During the subsequent two and a half years it has been extremely difficult for elected representatives at any tier of government to acquire clear information about it. Holding negotiations behind closed doors rarely instils public confidence, particularly when the results of any agreement will have wide-ranging political and economic ramifications. Unsurprisingly, this lack of transparency has generated widespread public scepticism about the proposed agreement.
Drew Hendry
On that point, if the TTIP agreement is as benign as we have been told, particularly for the NHS, does my hon. Friend agree that we should get the details out into the open so that they can be debated properly in this Chamber?
Ronnie Cowan
I agree with my hon. Friend.
My Scottish National party colleagues, whether MSPs, MPs or MEPs, have held a consistent position on TTIP: although Scotland might benefit from a free trade agreement with the United States, we require a number of assurances before we can give the proposals our full support. First, under no circumstances can TTIP threaten NHS Scotland with privatisation. I previously wrote to the Prime Minister regarding that specific issue, as did the Scottish Government, who urged the UK Government
“to ensure that the NHS is fully and explicitly exempt from TTIP and, if that is not the case, to use its veto at the European Council to prevent TTIP progressing”.
The UK Government’s response expressed the opinion that TTIP poses no threat to the NHS. I know that my constituents will not find the assurances of a Tory Government sufficient evidence that the NHS is safe from privatisation.
Unionist Members will no doubt say that health is devolved to the Scottish Parliament, but I remind them that any privatisation of health services in England will have associated funding implications for Scotland. It is unfortunate that no clear evidence has been provided regarding the protection of NHS Scotland and that we are instead reliant on an assurance from the EU and the UK Government that we should not be concerned. Legal advice sought by Unite the union was quite clear in concluding that the NHS is:
“Included in the material scope of the TTIP”.
The concerns of many people in Scotland about TTIP and NHS privatisation could easily be alleviated by an explicit opt-out for the NHS in the text of the agreement. As yet that has not been forthcoming. The SNP will continue to engage and advocate for NHS Scotland to receive adequate protection.
Rachael Maskell
Would it not be better to have a positive list of what is included in TTIP, rather than a negative list of what is excluded?
Ronnie Cowan
I could not argue with that. Either way, we need to have the assurances in writing.
Worryingly, there are already examples of Government policy changes resulting in legal action from foreign investors, including in the health sector. We must do everything possible to oppose such a situation in the UK’s nations. I would add that the European Commission’s proposal to replace the investor-state dispute settlement mechanism with the investment court system is little more than a rebranding exercise that will not alleviate the concerns that have been raised. It is unclear to me why an entirely separate legal mechanism is required to “protect” investors from national Governments. Foreign investors should not have the privilege of a special court, and multinational corporations, like individuals, should continue to operate entirely within the existing legal framework.
For those reasons, the text of any TTIP agreement must be subject to parliamentary scrutiny before the UK votes on it at European level. The Scottish Parliament must be part of that process, as Holyrood is best placed to determine the effects of any agreement on Scotland.
I have no objection in principle to free trade agreements, but it must not be free trade at any cost. The potential threat to NHS services, the transfer of powers to the private sector and the lack of transparency in the negotiation process are all areas of serious concern. It may yet be possible to reform TTIP in a positive way, but that can be done only when elected representatives have a more active role in drafting the agreement. Until the European Commission recognises these concerns, I am unable to see how any elected representative can give unqualified support to TTIP.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
I marvel at the utter certainty of the many hon. Members who are not here. Before negotiations are even completed, they seem to know what is in the final settlement. I marvel, in particular, at the hon. Member for Brigg and Goole (Andrew Percy), as we can see him fading away into the mists of the past—
Roger Mullin
Yes, like Brigadoon. I marvelled at his utter certainty and faith in the European Union as he read a letter to us for two and a half minutes. We can be comforted by the fact that we received assurances from the UK Government, and from Government Members, on a negotiation that is not complete, and unlikely to be completed for a considerable time.
I am in favour of international trade—it would be surprising if I were not, as the Member who represents the constituency that was home of Adam Smith. It would be wise of Government Members, had there been any here, to read some of his writings and see what leads to free trade and effective markets. My concern is that much of what is being proposed takes inadequate account of small and medium-sized enterprises, for example. We will be faced with a costly, bureaucratic and legalistic international court system.
Drew Hendry
Given the historically important factors for Scotland, such as shellfish and wild salmon, does my hon. Friend agree that it is vital that the Scottish Government understand the implications of the details of any TTIP agreement before it is implemented?
Roger Mullin
Absolutely. That is a particularly important reason why it is not only this House that needs fully and properly to debate any final settlement; it also needs to come to the devolved authorities, and not only in Scotland, but in Northern Ireland and Wales—I assume that Members from Northern Ireland and Wales would welcome that opportunity. If there is anything that new Members, who have been here for a mere six months, have come to understand, it is that this Government have no interest whatsoever in the concerns of the Scottish economy, and it is matched only by their complete ignorance of it.
Roger Mullin
Well, the lady on the Government Front Bench can do her snide little waving, but it does not hide the truth of my statement. [Interruption.] Yes, does she wish to intervene? [Interruption.] Silence is golden in some cases.
I commend the hon. Member for Swansea West (Geraint Davies) for securing this fine opportunity to debate this important issue, but I am sure that he, like me, is very disappointed at the lack of interest shown by Government Members in international trade. I have particular interests that have not been mentioned so far, so I am going to take a little time to delve into one or two other areas.
I became aware some time ago that the Department for International Development had commissioned a study by the University of Sussex on the impact of TTIP on developing countries, or what it called “low income countries.” I would like to read into the record one of the paragraphs produced by the University of Sussex for the Government:
“A transatlantic agreement carries potential threats…in some sectors. The reciprocal removal of”
most favoured nation
“tariffs in transatlantic trade could entail LIC”—
low income countries—
“lose market share to the TTIP partners as a result of the fall in tariffs and other barriers.”
In other words, and to put it simply, the removal of barriers to partners within the deal while maintaining barriers elsewhere will make it more difficult for international trade to be accessed by some of the world’s poorest countries, which we should be encouraging to engage in trade. I am concerned about that and hope that when the Minister responds, she will address the effect that the proposal will have on some of the poorest countries in the world.
Like many Members who have already spoken, I am also concerned about the great democratic deficit in the proposed investor-state dispute settlement or, as it is becoming known, the international court system. I was particularly intrigued by the comments of the former Secretary of State for Trade and Industry, the right hon. Member for Hitchin and Harpenden (Mr Lilley), that he was greatly concerned about the issue. ISDS will put in place a system that could usurp the legitimate democratic processes of those countries involved. On this point, as on so many others, those of us who are concerned have been reassured and told that we are foolish because there have been 94 ISDS agreements and nobody ever uses them. If that is the case, allow me to save millions of pounds in negotiating them by suggesting that they be immediately dropped. Then everybody will be happy and content, will we not? Some of the arguments strike me as completely and utterly fallacious, if enjoyable near Christmas time.
I wanted to refer to many other issues. I have been encouraged by my fellow SNP MPs to respond to all the detailed contributions made by Government Members, but since they are not here to hear my words of wisdom, I think I will save them for a more convivial time, in order to take them to task.
John Nicolson
For those of us who are having trouble seeing across the aisle, will my hon. Friend, for the record, remind us how many Conservatives are taking part in this debate? Perhaps he could count them for us.
Roger Mullin
My hon. Friend is being very unkind. I believe there is one to come, but I do not see the right hon. and hon. Members I would have expected to be flooding the Government Benches, had they a genuine interest in international trade or in the issues under discussion. They have gone away, like much of this Government’s policy.
If anybody needs to be convinced that we need to be concerned about TTIP, the democratic deficit and the way in which it provides favours, but only for the large corporations, this debate has served its purpose and served it well.
Kate Osamor (Edmonton) (Lab/Co-op)
I congratulate my hon. Friend the Member for Swansea West (Geraint Davies) on securing this debate and the other hon. Members who signed the motion.
I want to focus on the potential impact of the investor-state dispute settlement on our NHS. Before coming to this House, I worked in the NHS for 15 years, so it is personally important to me. Many of my constituents have also sent me emails stating that they are very concerned about the Transatlantic Trade and Investment Partnership and the potentially damaging effects on consumer safety, environmental protection and public health.
The ISDS allows investors to bring proceedings against foreign Governments who are party to the treaty in tribunals outside the domestic legal system. The Government state that the ISDS provisions are still under negotiation and that they must strike the right balance on protecting investors. I believe that that threatens to lead to greater corporate interference in public policy, as Governments may be motivated by fears that they are going to be sued by private companies. Therefore, I was particularly concerned when in February the summary of a legal opinion commissioned by Unite—a left-wing union of which I am a member—suggested that
“there are real risks arising from the TTIP that could impact on the NHS unless a robust carve-out is put in place.”
I am encouraged by the Government’s answer to a parliamentary question on 28 October that they have protected the national health service and public services in these trade agreements and that it would be possible for a future Government to terminate private provision of services, but I am deeply concerned that they will facilitate further privatisation under this Government. Many campaigners, including People’s NHS, who took to the streets in November, also fear for the NHS.
I end my speech by asking the Government, first, to clarify their position on the use of the ISDS element of TTIP and, secondly, to reiterate their guarantee that it will not interfere with our ability to de-privatise our NHS.
Daniel Zeichner (Cambridge) (Lab)
I, too, thank my hon. Friend the Member for Swansea West (Geraint Davies) and the Backbench Business Committee for initiating this important debate.
TTIP may not be on the lips of everyone in every constituency, but there is great interest in it in my constituency, so much so that during the general election campaign, when I was pleased to be joined on the campaign trail by the wife of the then Leader of the Opposition, she was absolutely amazed to find that the inhabitants of the first three houses whose doors we knocked on all wanted to talk to her about TTIP. I think she went away appreciating that Cambridge is a very special city indeed.
Such is the interest in the city that we have had a series of public meetings, one of which I organised. I was very pleased to welcome my colleagues Richard Howitt and Lucy Anderson, who are both Members of the European Parliament, to help throw light on what for many people is still a deeply opaque process.
Of course, I agree with other hon. Members that trade agreements are important, but they are also intricate and complicated, perhaps inevitably so. For many of our citizens they seem very remote, and they are often negotiated under wraps. Even to those of us who are following the detail, TTIP can seem fiendishly complex, but it is so important that it cannot be ignored, which is why we must keep asking questions and make sure that they are answered to our satisfaction.
As other hon. Members have pointed out, of course we are in favour of trade agreements. They bring significant benefits and boost trade and growth, and they should secure and create jobs, bring down costs and extend choice for consumers. The Government tell us that an ambitious agreement could add as much as £10 billion annually to the UK economy in the long term, which would be good for jobs and good for consumers. That would, indeed, be welcome, but those economic benefits are contested, and I suspect that, in truth, the reality is that there is simply no way of knowing for sure at this stage what the potential gains may be. We should beware of hyperbole. We need to be able to weigh the possible benefits against the possible risks, which is why the Government should assess, in a transparent, comprehensive manner, what the real economic impact might be. I understand the Business, Innovation and Skills Committee has recommended that this assessment should set out the potential benefits and risks on a sector-by-sector basis, which would probably provide much sought-after clarity.
There are many concerns about TTIP, and they have been well rehearsed in this debate. I share with many hon. Friends the concerns about the impact on public services, particularly the national health service. The investor-state dispute settlement mechanism might gift transnational corporations the power to sue countries for profits that have been lost as a result of that country’s policy decisions. There is a very real fear that the inclusion of the ISDS mechanism will prevent a future Labour Government from reversing the Health and Social Care Act 2012 in England owing to the fear of the cost of legal challenges they may face.
Mr Spellar
If companies have existing contracts as a result of privatisation, can they not, under contract law, take action in the domestic courts? Is that not the problem, rather than that there will be a new legal procedure?
Daniel Zeichner
I certainly agree with my right hon. Friend that real problems are created by our own Government, and we do not just have to fear TTIP, but TTIP might make the situation worse. As someone who endured the horrors of a tortuous and expensive tendering process for our health services in Cambridgeshire during the past few years and has seen it collapse spectacularly and expensively in recent weeks, my advice to the House is: “Don’t go there.”
We have had reassurances from Ministers. Recently, the Minister for Skills said that
“the Government were entirely satisfied that the position regarding TTIP would not threaten the public status of our NHS or other public services. We were entirely satisfied that there was absolutely no intention on the part of the Commission in negotiating the agreement, or on the part of any other EU member state, to allow the status of either our public services or theirs to be threatened.”—[Official Report, 9 July 2015; Vol. 598, c. 568.]
I must say that I am not so sure, not just because of who told us that, but because, from what I have heard, my constituents are not satisfied and because we will not be satisfied until we have concrete proof that a TTIP deal would not irreversibly expose the NHS to competition and threaten its very basis as a public service.
Finally, TTIP is no ordinary trade agreement. Its prime objective is the removal of regulatory barriers to trade, but there is a significant gap between EU and US regulations in a host of areas—safety at work, food production, the use of pesticides and GM crops are just some of them. The danger is that instead of TTIP harmonising regulations upwards to remove regulatory barriers, it will seek the mutual recognition of regulations between the EU and the US. That will inevitably lead to pressure for deregulation in the EU, as EU businesses find that they can no longer compete against US companies that operate to inferior standards of environmental protection and health and safety legislation.
Jo Stevens
There are significant concerns about the United States not ratifying the International Labour Organisation conventions and about violations of fundamental labour rights in the United States, such as the right to organise and the right to negotiate collectively. Does my hon. Friend support the implementation of those core ILO standards within TTIP?
Daniel Zeichner
It would most certainly be good for our Government to recognise many such obligations, and certainly to do so within TTIP. I wanted to conclude that section of my speech by saying, to put it rather crudely, that the US can keep Donald Trump—we do not want that here.
These issues are not easy to resolve, but we should proceed with caution. A trade agreement that brings economic benefits for our country is undoubtedly welcome, but putting ourselves at a disadvantage, undermining our public services and weakening consumer and workplace safeguards is not. We deserve to know what is going on, and we demand that the Government stop ducking and dodging and ensure that future negotiations with the EU and the US are done in the open so that everyone can make an informed judgment.
Mark Durkan (Foyle) (SDLP)
It is a pleasure to follow the hon. Member for Cambridge (Daniel Zeichner). Like him, I have heard many concerns expressed by many constituents in relation to this issue at a number of levels. They do not come at it with an anti-American point of view. My constituency enjoys significant US corporate investment—would that we had more—and many people are employed by firms that are US-based or were US-based but now have a more global formation. The city of Derry has long been key to the transatlantic partnership. It was a key transatlantic port for many years, and even during the second world war. As Base One Europe, the Americans’ first base in Europe in the second world war was in Derry. In fact, they started building it six months before Pearl harbour.
My constituency gives such transatlantic relationships a very positive embrace. We are not against anything transatlantic, we are not against trade, we are not against investment and we are not against partnership, but people have a right to be concerned about what has been proposed and to make sure that parliamentarians—at Westminster, in the European Parliament and, I hope, in the Parliaments of other member states—will do due diligence and give due scrutiny to what is involved, because the potential is significant.
I do not dispute that some aspects of TTIP are potentially very positive. I have listened to the arguments that some hon. Members have made in offering assurances about what this trade deal actually represents. However, they too must listen to people’s serious and genuine concerns. I congratulate the hon. Member for Swansea West (Geraint Davies) on introducing this debate, but I also congratulate the right hon. Member for Hitchin and Harpenden (Mr Lilley) on helping to delineate carefully some of the different issues involved.
We have to make sure that we are not creating, in the name of all the good we want to happen in relation to trade and investment, any new constructs that are beyond accountability, meaning that we end up with transnational capital having more legal clout than the parliamentary systems of democratic states in determining public policy and national law.
It is also important to recognise that some hon. Members have cited the assurances given either by Ministers in this Parliament or by members of the European Commission. Some people say, “Well, other investor-state dispute settlement systems have not resulted in cases being lost.” We know that past performance is no guarantee in relation to future prospects. We particularly need to recognise that the scale involved in this deal is much greater than that involved in any of the other existing bilateral ISDS set-ups.
We must remember that there is potential not just for cases against the UK to be lost, but for cases against other member states to be lost, which would then create case law that could, in turn, be used against the UK and other member states. That is a key worry for the devolved Administrations: what are the consequences for them of cases brought elsewhere? Indeed, the devolved Administrations may be targeted—for example, a case may be brought against a devolved health service—because they are seen not to have very deep pockets and are seen not to be in a strong position to hold out against such a case. For some corporate interests, that may then be a Trojan horse to get into other UK services.
We have had such an experience in relation to the EU. The fact is that the European Commission has often introduced directives, and given assurances about its intentions and the import of those directives, but has not then been in control of subsequent European Court of Justice decisions. Such ECJ decisions have meant that the European Commission has had to revise its guidance to member states, and member states that previously relied on those assurances have had to bow to different demands.
Christina Rees
Does the hon. Gentleman think that a separate judicial system available only to foreign investors is called for?
Mark Durkan
That could be one answer. There may be something in that. It is interesting that the European Commission seems to have accepted that there are some problems with the proposed ISDS. I note that even the hon. Member for Brigg and Goole (Andrew Percy) said that some legitimate concerns about the ISDS had been made, although he did not tell us what they are. Does the proposed investment court system answer all such questions? I am not sure that it does, and we must look at that. We must come up with a system that actually works in all terms: yes, one that provides free trade, open trade and fair trade, but also one that protects public services in this country.
We must remember that aspects of TTIP have previously been debated in this Chamber and elsewhere. Indeed, the hon. Member for Eltham (Clive Efford) introduced a private Member’s Bill during the last Parliament. I was on the Public Bill Committee on the National Health Service (Amended Duties and Powers) Bill. It was filibustered by Conservative Members who wanted to stop a private Member’s Bill that would have provided belt and braces protection against the implications of TTIP for the health service. If they thought that the protection was already there and the Bill was superfluous, it seems strange that they would go to such lengths to filibuster it. The hon. Member for North East Somerset (Mr Rees-Mogg) treated us to hours of papal encyclicals on social good and health. We were treated to his version of “Top of the Popes”, all in an attempt to stop this House putting in place a bulwark to protect health services. That makes people suspicious of the true import of this agreement.
The hon. Member for City of Chester (Christian Matheson) was right to ask how this issue will play into the EU referendum. He said that the arguments that are being made for TTIP could be used by people who want us to exit the EU to say, “We can have all the benefits of trade outside the EU.” On the other hand, the referendum will probably be highly personalised as the Prime Minister’s referendum and, as he will have little to show from his renegotiation that will persuade the doubters on his Back Benches, he will instead go before the electorate saying, “If you don’t stay in the EU, you won’t have the benefits of TTIP.”
This referendum may well be sold, as was the original referendum, on the basis of market opportunity. If the market opportunity is the TTIP market, this might become a very significant issue during the campaign. The experience in Ireland shows that issues that appear to be esoteric and technocratic can become the running strand in a referendum—one does not know where that will lie. The fundamental misgivings that people have about TTIP need to be addressed now through proper scrutiny; otherwise we might find ourselves casualties of the public debate during the referendum campaign.
Hannah Bardell (Livingston) (SNP)
I would like to put on the record my appreciation for the work that my hon. Friend the Member for Glenrothes (Peter Grant) and the hon. Member for Swansea West (Geraint Davies) did to secure this important debate on TTIP. It is a matter of great concern to many of us across the House and it has been important to hear the varied contributions. I pay tribute, in particular, to my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin), whose contributions are always considered and colourful.
The position of the Scottish National party on the proposed trade deal has been clear and consistent, and was reached democratically by the membership of our party. I reflect the views of my hon. Friends, the membership of my party and many, many Scots when I say that we have real and legitimate concerns about a number of the proposed provisions in the trade agreement that would threaten the ability of elected Governments in Europe to act and regulate in the public interest. I will touch on those concerns later.
At the outset, I will address the value of international trade and foreign direct investment, which are vital to our economy. The debate on this trade agreement is not about the principles of free trade. I and my party are passionately pro-trade. Instead, this debate is about the need to achieve a balance. There must be a balance between securing opportunities for further international trade and doing so transparently, while protecting the integrity of democratically elected Governments to run public services and make decisions in the interests of the people they were elected to serve.
Scotland is an avowedly outward-looking and ambitious nation, and is punching well above its economic weight. According to Ernst & Young, Scotland was the UK’s most successful inward investment magnet outside London last year in terms of the number of investment projects secured. In all, 80 separate inward investment projects came to Scotland last year, almost half of which were from the United States. There is a pattern of competitive excellence. Over the past 10 years, Scotland has secured more than 37,000 jobs from foreign direct investment, making it a narrow second to London but well ahead of other parts of the UK. In the past six years, under the SNP Scottish Government, the value of international exports has increased by 40%. That is good for Scottish business, good for the Scottish economy and good for working people in Scotland. The internationalisation of Scottish business, boosting exports and attracting foreign direct investment remain key to Scotland’s economic strategy. My point is that Scotland is a proud and successful trading nation.
In the interests of balance, it would be remiss of me not to highlight the Conservative Government’s record on trade and exports. There were 4,000 fewer British businesses exporting in 2014 compared with the number that traded internationally in the previous year. Earlier this year, it emerged that the Chancellor has presided over the largest annual trade deficit since records began in 1948—a deficit of £92.9 billion, which is the equivalent of 5.1% of GDP at current market prices. The claim that the Government lay to economic credibility is a myth and it lies in tatters.
I highlight that trading record because it is important to recognise that the economic achievements of the SNP Scottish Government are characterised by an openness to trade with our partners and friends around the world. We welcome the opportunity to forge better trade links and encourage our businesses to release their international potential. However, TTIP represents better trade links at the expense of transparency and democracy, and potentially at the expense of good public services owned and managed by the public. I will address three specific concerns.
The first concern relates to the investor-state dispute settlement, which has been much talked about today. We have seen movement on this issue over the past few months from the European Commission, which has conducted somewhat of a rebranding exercise with its revised international court system, which replaces ISDS. Although the ICS proposals contain a number of important reforms of ISDS, the changes are nowhere near what is required to overhaul the inherently unfair system of extra-judicial rights for foreign investors. The fundamental question of why private companies require the ability to challenge public policy decisions made by democratically elected Governments remains unanswered.
This is not a fringe concern. Without intimating any political preference in the upcoming US presidential election, I highlight the comments of Hillary Clinton in her book, “Hard Choices”. I commend it to the House—it is a great read. She says of trade agreements that
“we should avoid some of the provisions sought by business interests, including our own, like giving them or their investors the power to sue foreign governments to weaken their environmental and public health rules”.
While I am talking about views in the US, it is interesting to note the letter of objection to ISDS, which claims that it weakens the rule of law, that was signed by eminent lawyers and academics such as Judith Resnik, professor of law at Yale, and Nobel laureate Joseph Stiglitz.
The SNP has repeatedly pressed the Government for an explicit exemption from the agreement for the national health service. There must be absolute clarity that although the UK is, for the time being, the member state, any decision it takes in the context of TTIP, such as opening up the NHS in England to greater private sector involvement, in no way interferes with the Scottish Parliament’s devolved responsibility for the Scottish NHS. I commend the campaigns that have stimulated public interest in the potential consequences for important public health services, particularly the People’s NHS campaign. I urge the Government to pursue meaningful exemptions for the NHS.
Alison Thewliss (Glasgow Central) (SNP)
Does my hon. Friend agree that it is concerning that the public information campaign on TTIP has been left to such grassroots organisations? They are going out and making the case to people on the streets on a voluntary basis, but there is no wider campaign.
Hannah Bardell
I share my hon. Friend’s concern. Perhaps we should draw on the experience of the Scottish referendum, which showed that full engagement and full transparency allow full participation in these processes. It is important that the public have all the information available to them.
My second concern about the potential impact on Scotland of a ratified TTIP is the effect on protected food names and geographical indicators.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
This week, we had an excellent Westminster Hall debate on bees and the use of neonicotinoids. There are worries that TTIP could water down the regulations on pesticides. Does my hon. Friend agree that, in addition to the threat to names and geographical indicators, TTIP poses other threats that could affect Scotland’s clean, green status and its £14 billion food and drink sector?
Hannah Bardell
My hon. Friend makes her argument eloquently, and I share her concerns.
I understand that in the course of the negotiations the UK Government have suggested three Scottish products—Scotch beef, Scotch lamb and Scottish farmed salmon—for inclusion in TTIP as protected geographical products. However, there are at least 11 other protected Scottish food names which must have clear and explicit protection in TTIP. The consequence of this not happening would be the potential flooding of the market with imitation products. I invite a commitment from the UK Government that they will negotiate for the inclusion of special protections in TTIP for the full range of protected Scottish product names.
Negotiations on the scope of TTIP began in July 2013, but the people of these isles, who will be affected for better or worse by this trade agreement, have had to rely on speculation in the column inches of newspapers for any insight into how they might be affected. Indeed, the progress of this trade agreement has been characterised by a lack of transparency, and that is simply not good enough. Again, this is not a fringe concern; it has also been expressed by the President of the German Bundestag, Norbert Lammert, who has indicated that he would even oppose TTIP without a more transparent process of negotiation.
Should an agreement on TTIP eventually be reached, it will be for the Heads of Government across Europe to indicate their approval and for the European Parliament to approve or reject the agreement. On the question of whether the final deal is good for us, good for our public services and good for our small businesses, we will need to place our trust in this Prime Minister’s judgment. I would suggest to him—and to this Government—with the greatest respect, that should an agreement on the scope of TTIP emerge, he might wish to afford this House the opportunity to properly debate the merits of any such agreement. That point has been made numerous times today, and I would welcome a commitment from the UK Government to that effect. I also suggest that that courtesy might be extended to the devolved legislatures and Governments.
It is by no means clear when, or even if, a final agreement on TTIP might emerge. To be clear, should it come to pass that an agreement is reached, any potential economic benefits of TTIP cannot come at the price of the threat of the privatisation of our public services such as the NHS, and it cannot come at the expense of the integrity of our distinct national products. I suggest that public and political confidence, if they are not already lost, might be won by embracing a more transparent process in the progression towards an agreement. I look forward to the contribution from the Government today.
Kevin Brennan (Cardiff West) (Lab)
First, I want to say well done to my hon. Friend the Member for Swansea West (Geraint Davies) for securing the debate. If I counted correctly, there have been 16 Back-Bench contributions. I hope I have not missed anyone out. The speech from my hon. Friend the Member for Swansea West was followed by a very important speech from the right hon. Member for Hitchin and Harpenden (Mr Lilley). His thoughtful and important points about international bureaucracies outside democratic control resonated across the House. My right hon. Friend the Member for Warley (Mr Spellar), the chair of the all-party parliamentary group on European Union-United States trade and investment, put the case in his typically robust style and in a very effective manner.
We also heard speeches from the hon. Member for Aberconwy (Guto Bebb), my hon. Friend the Member for City of Chester (Christian Matheson), the hon. Members for Newark (Robert Jenrick), for Glenrothes (Peter Grant) and for Brigg and Goole (Andrew Percy), my hon. Friend the Member for Bishop Auckland (Helen Goodman), the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), my hon. Friend the Member for Luton North (Kelvin Hopkins), the hon. Members for Inverclyde (Ronnie Cowan) and for Kirkcaldy and Cowdenbeath (Roger Mullin), my hon. Friends the Members for Edmonton (Kate Osamor) and for Cambridge (Daniel Zeichner), and the hon. Member for Foyle (Mark Durkan). Finally, we heard from the hon. Member for Livingston (Hannah Bardell), speaking from the Front Bench for the Scottish National party. All those speeches made for a very interesting debate, and I look forward to hearing the Minister’s response to it.
There have been several debates on this subject in the House over the past couple of years and I am sure that they have helped to shape the debate about TTIP and to influence the negotiations in a positive way. There is general cross-party support for trade, and for a good trade agreement, but, as we have heard, there is also a great deal of controversy and concern, and in some cases outright opposition.
A comprehensive trade agreement between the EU and the USA has huge potential benefits. The CBI has described it as a global economic game changer, but of course for that to be true we have to get it right. The hon. Member for Livingston pointed out the Government’s dismal record on trade. I can tell her that new figures have come out today on the UK trade deficit in goods and services which show that the figure had risen to £4.1 billion in the three months to October 2015, which is £2.4 billion higher than in the previous three months. If that is not clear evidence that we need to improve our trade and export performance, I cannot imagine what is.
Kelvin Hopkins
Does my hon. Friend agree with Anthony Hilton, who has written in the Evening Standard that the disaster facing us is in fact a trade deficit disaster, and that this Government and future Governments will have to address it?
Kevin Brennan
Yes, my hon. Friend is absolutely right. When the Government discuss deficits, they seem not to want to talk about the trade deficit at all. It is extremely important, however, because it will in effect become a tax on every household in the country if we allow it to persist. We have to do much better, and this point simply highlights the difference between the Government’s rhetoric and the reality of what is happening in our economy.
Estimates commissioned by the Government, and others, suggest that the potential gain from TTIP to British output could be between £4 billion and £10 billion, or 1% and 3% in exports. We must, however, be cautious about the overall figures, as they have been questioned. It would be helpful if the Government could do more to explain their case. In particular, given the wide range of contributions to today’s debate from Members representing constituents in all the nations and regions of the UK, it would be helpful if they could break down a little further what the potential benefits would be across the nations and regions.
I put a written parliamentary question to the Secretary of State for Business, Innovation and Skills, which the Minister for Small Business, Industry and Enterprise answered recently. My question was about the potential benefits of TTIP to various parts of the UK economy. The part of the question that the Government could not answer was the part relating to the benefits for the economy of each region and nation. It would be useful if the Government did that work if they want to convince the public across the United Kingdom of the benefits of the process.
We support the core objectives of a good deal—job creation, better wages, higher standards and consumer benefits—but as the debate has shown, there are still legitimate concerns that the Minister needs to address in her response. The desire to get the deal through is understandable, particularly given the US presidential election in 2016. Europe and the US are Britain’s most important markets. The US is already the UK’s largest export market, but more can be done to tackle barriers to trade and to improve market access—hence the need to reach a deal. However, any trade deal must filter down to employees, to small and medium-sized enterprises and to consumers. The business case for TTIP must be more than a case just for business. That point will be crucial in assessing any final deal.
We have set out four tests in the past and I want to repeat them today. The first key test is the ability of the deal to deliver jobs and growth. The second is that it should be open and accountable. The third is the aim to achieve the highest possible standards regarding social and environmental concerns and, of course, wages. Fourthly, the agreement must allow enough space for national Governments to act in their own interests and according to their own democratic mandates. We have been monitoring closely the negotiations between the EU and the US, and the UK Government’s input into them, through the prism of those tests. We want the benefits that businesses experience to be passed on to consumers through better choice or lower prices.
I am sure the Minister will argue strongly for the benefits that TTIP can bring, and it would be useful to hear whether she thinks it would be in Britain’s interest to leave the European Union, given that we are negotiating this agreement. Can she explain what would happen to TTIP if the UK left the EU? Reports suggest that the Prime Minister is considering recommending such a course of action if he cannot get his way in the negotiations. Labour Members strongly believe that it is in the UK’s interest to stay in the European Union, and I hope the Minister will echo that in her response to the debate.
Real concerns have been raised about the ISDS, and many of our Labour colleagues in the European Parliament have pressed hard on that issue. The current European Parliament resolution calls for the ISDS to be replaced by a
“new system for resolving disputes between investors and states”
that is
“subject to democratic principles and scrutiny.”
The text does not address the issue of having a separate judicial system that is available only to foreign investors. The European Commission responded to the European Parliament’s demand by publishing on 16 September a proposal for a new mechanism called the investment court system, which would be used as a reference for TTIP and all future trade negotiations. Labour MEPs are considering that proposal closely and have expressed strong reservations about it.
It would be helpful to hear a strong statement on the NHS from the Minister, given the concerns that have been raised by constituents and by right hon. and hon. Members today. When does the Minister believe that the TTIP agreement is likely to be concluded? What representations have Ministers made to the European Union about ISDS, and what are the Government doing to engage better with businesses, charities, consumer groups and trade unions to improve public understanding of TTIP and counter the view that it is all being done behind the public’s back?
The prize of a successful agreement must be shared among all—businesses, employees and consumers—and not just large corporate interests. Labour will continue to push for transparency so that the benefits of this major deal are clear to all. As hon. Members have mentioned, there are concerns about the impact of TTIP on working people and public services in the UK. Our major concern is that the trade agreement has the potential to dilute workers’ rights, and given the Government’s record on that—not least the Trade Union Bill in the other place—those concerns are understandable. What assurances can the Minister give about labour and workers’ rights, and will she assure the House that the agreement will not be used to block future attempts to bring a health service back towards public ownership?
Time is limited, so in conclusion we believe it right that this important issue be debated in Parliament, and we agree that the proposals deserve proper scrutiny at UK and EU level. Labour supports trade agreements that can bring significant benefits through boosting trade and growth, securing and creating jobs, and bringing down costs and extending choice for consumers. However, we want to hear the Government’s response to the legitimate concerns that have been raised in the House today about TTIP.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
I think you are too young, Madam Deputy Speaker, to remember Sanatogen wine, but yesterday I was unfortunately on my sick bed. In fact, I was so ill—I do not expect any sympathy—that I could barely sip water, never mind Sanatogen wine, but today’s debate has been an absolute tonic. At times my blood pressure rose a little too high for comfort, but I think we have had a really good debate about this important agreement.
Unfortunately I have only about seven or eight minutes to try to answer all the points that have been raised, and I will fail in that. The usual rules apply, and anybody who has raised an important point will get a letter in response to it, because time—as ever—is against me. I congratulate the hon. Member for Swansea West (Geraint Davies) on securing this debate, and hon. Members on the quality of almost all the speeches.
My hon. Friends the Member for Brigg and Goole (Andrew Percy), for Aberconwy (Guto Bebb), and for Newark (Robert Jenrick) raised a point about the unfortunate scare stories that have been put around. I gently chide the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) who spoke about the fact that the Government Benches were empty. In fact, many Members seem to have disappeared by the time he rose to speak—I am sure that was not a comment on his oratory. There were about 15 SNP Members in the Chamber, and it would be silly to suggest that those who were not present do not care about this important matter.
Anna Soubry
No I will not.
It does not enhance the reputation of the Chamber when hon. Members refer to the lack of people present, because that does not mean that other hon. Members are not in their rooms working and following the debate, or that they will not read it in Hansard. We all care, on all sides of the House, about this matter.
My hon. Friends the Members for Brigg and Goole, for Aberconwy and for Newark made very important points about the scare stories. There has been a lot of unpleasantness around this matter. I would just say to the hon. Member for City of Chester (Christian Matheson) that perhaps he and others on the Labour Benches are now experiencing the sort of abuse and attack that, frankly, most of us on the Conservative Benches have been receiving for many, many years. This is really a rather good example of it. We have been told that we do not believe in our national health service, although we do, and that we want in some way to privatise it, which we do not. Equally, we have been told by an SNP Member that such was his concern that he decided to write to the Prime Minister and that the Prime Minister wrote back giving an unequivocal guarantee that neither the NHS nor any other public service was under threat from this agreement, at which point he—the hon. Gentleman—said it was not worth the paper it was written on. I do not think that that advances democracy; it is grossly insulting to the office of the Prime Minister and it does the hon. Gentleman no credit at all.
We then have the letter from the European Commission. I will not repeat it, as my hon. Friend the Member for Brigg and Goole read out the most important points and put them on the record. Well, I hope hon. Members will take the view of the European Commission. It is a remarkable document from the EU. It is succinct and it answers good questions with good straight answers. It is absolutely clear that this trade agreement poses no threat to the national health service or any other bit of the public sector. It is most unfortunate that too many Opposition Members refuse to listen to the reality and take those assurances, and instead scaremonger and whip up a storm where no storm exists.
There has been criticism about an apparent lack of transparency. I am very grateful to the European Union, which during the course of the debate has tweeted a link to its website. I have visited its website. If Members follow me on Twitter, I will very happily provide a link to it. Again, I have to say—perhaps remarkably, although I am a firm supporter of our continued membership of the European Union; that is well known and has been known for donkeys’ years—in all seriousness that it absolutely lays out everything that is being negotiated very clearly in good plain English. The idea, therefore, that this is all being conducted in a secret manner is absolute nonsense.
It is very important to make the point that there have been six debates about TTIP in this place, and rightly so. That is exactly what this place does extremely well. Backbench Business debates, Westminster Hall debates—it matters not. They have all been opportunities, like today, for hon. Members quite properly to stand up and raise their concerns, as the hon. Member for Swansea West so ably did.
Helen Goodman
Will the Minister use the last three minutes to respond to the questions that have been raised about ISDS, instead of telling us what she drinks?
Anna Soubry
The hon. Lady has just wasted 30 seconds in which I could have provided exactly that response.
May I now deal with the actual subject of the debate, even though others seem to have drifted off? This is an important trade agreement and it is all about free trade. It will bring huge benefits to the economy of this country. We have heard mention, quite rightly, of independent assessments that say that the benefit to the United Kingdom economy is somewhere in the region of £10 billion—that is real benefit to everybody. We have many examples of previous treaties. The hon. Lady should know all about these investment treaties and ISDS clauses, which she says she does not like in this treaty. She should like them. She should know all about them, because when she was in government she approved 20 of them—20 of these sorts of treaties were signed by the previous Labour Government, and rightly so. We have a great record of creating the right environment in the United Kingdom for investors and for treating them fairly. We have over 90 such agreements in place with other countries, and, as other hon. Members have said, there has never been a successful claim brought against the United Kingdom. To date, 90-plus existing bilateral investment treaties have not led to any regulatory chill. The European Union wants an improved approach to investment protection, and ISDS in TTIP guarantees the right of Governments to legislate in the public interest fairly and without discrimination.
I will deal quickly with the point about small and medium-sized businesses. I take exception to the idea that they will somehow suffer disproportionately under TTIP. On the contrary, large companies can often overcome non-tariff barriers, such as differing regulatory standards, because they have the necessary resources that small businesses simply do not have—small businesses cannot afford the time and the costs involved. TTIP is likely to be most beneficial precisely to small businesses in our country, because it will help them trade, notably with the United States.
I can assure hon. Members that these provisions will not prevent the Government from taking regulatory action to protect the public or the environment, nor will they force the Government to change laws, to open markets, or, as I say, to privatise public services such as the NHS. I want to make it absolutely clear that climate change policies are not on the table in the TTIP negotiations, so TTIP will not hold back action on climate change or undermine current or future legal obligations, under the United Nations framework convention on climate change, to reduce carbon emissions.
TTIP is not a secret negotiation. It is there for everybody to read on the internet, and it is reaching the right conclusions. When it has concluded, it will be for this Chamber to ratify it. It will lie here for 21 days. At that point, any hon. Member could put before the House a motion to reject it. However, I hope that when that day comes Members will accept this agreement because it is about free trade and it is the right thing to do.
Geraint Davies
I thank all Members from all corners and all nations of the United Kingdom who have contributed to this excellent debate. The problem that people have with TTIP is ISDS. Nobody has made a compelling case for the inclusion of ISDS. The wolf’s teeth should be drawn so that we can move forward to get the benefits of trade. In addition, we need to introduce enforceable and binding measures to protect our environment, our democracy, our labour standards, and our human rights.
The simple fact is that we want trade. Yes, we will have trade, but let us not trade our democracy, our liberty, our sovereignty, our public services and our environment into the pockets of multinational companies. Let us have trade, let us move forward, let us keep all that we have in Europe that we value, and let us have a global trading situation where everybody can benefit fairly and our environment is sustained.
Question put and agreed to.
Resolved,
That this House believes that the Transatlantic Trade and Investment Partnership, the Comprehensive European Trade Agreement, the Trade in Services Agreement and any associated investor-state dispute settlement provisions should be subject to full parliamentary scrutiny in the UK and European parliaments.