Lord Brooke of Alverthorpe
That this House takes note of the case for protecting the National Health Service in future trade deals entered into by the United Kingdom.
Lord Brooke of Alverthorpe (Lab)
My Lords, it is my privilege to move this Motion. I am grateful to my party for giving me this opportunity to speak on this issue, to the House’s Library for the comprehensive briefing it prepared, and to others who have sent in briefings, particularly the BMA.
It is important that we have this debate to give us a chance to shine a light on the challenges and threats that we may soon have to face in the event that—with a new Prime Minister at the helm—come 11 pm on 31 October, the UK leaves the EU without any deal. Without a deal, there will be no implementation period and trade deals will become more urgent. I fear that while we have been focused on the withdrawal agreement, other countries have been gearing themselves up for trade agreements with us, with access to the NHS’s £127 billion budget in particular being the ultimate prize that many would like to get their hands on.
The NHS was born in 1948 with a promise to provide care based on need and free at the point of delivery. It was an act of faith—a venture of belief that was needed in a still unstable world. To this day, the British public see their taxpayer-funded, free at the point of use health system not just as a source of medical treatment but as a vital expression of national values—of equity and compassion. I argue that it is one of the more important bits of glue that still keeps us together. Last year, the NHS celebrated its 70th birthday. It maintains its position as the top health system in the world among the 11 countries ranked in the Commonwealth Fund report, getting top marks for patient safety, efficiency and affordability.
The NHS—even, I acknowledge, with its challenges—stands in stark contrast in both principle and practice to healthcare systems elsewhere that link treatments to the ability to pay. Throughout the world, the fear of illness is a real concern for far too many people, but that fear is greatly increased when they come to add the cost of treatment for it. We in the UK, thank God, are relieved of that. It is little wonder that the NHS is so overwhelmingly supported and loved.
Given the emotional connection, respect and affection that the British public have for their NHS, it is hardly surprising that concerns over budget cuts and funding were cynically expropriated by the Vote Leave campaign in 2016. Noble Lords will not need reminding of Vote Leave’s claim that the UK would send to the NHS the £350 million being paid weekly to the EU. This was a harmful and shameful stunt emblazoned on the side of a red double-decker bus—another great British emblem—which the head of the UK Statistics Authority called,
“a clear misuse of official statistics”,
in a letter to Boris Johnson.
What Mr Johnson and the Brexiteers carefully concealed by omission is that the EU affords a degree of protection for the NHS from predators and profiteers by limiting market forces’ intervention in public health, education and consumer interests through standard setting. Unless covered by a negotiated leaving deal, that will disappear. Instead, any country may seek a trade deal with the UK and might sign up to one only if it has access to the NHS and its many treasures.
The prospect of a trade agreement with the US has raised concerns about what impact future trade terms might have on the NHS. Make no mistake, the Government are desperate for a deal with the USA. President Trump made several characteristically contentious statements during his recent visit to Britain, but his assertion that the NHS would be “on the table” in discussion of any post-Brexit US-UK trade deal was by far the most contentious. Conservative politicians, many of whom had thrown their hat into the ring to succeed Mrs May, were at pains to denounce this possibility. They echoed Mrs May’s claim that the NHS will remain as it is today; it will remain free at the point of use. “The NHS is not for sale”—her words, not mine. “We continue to stand by the principles of the NHS”, she said.
However, as many observers were quick to point out, the NHS has long been on the table. Despite the common idea that the UK health system is a public sector endeavour, the private sector, including American-owned companies, already plays a significant part in it. For several decades now—boosted by the Health and Social Care Act 2012—private firms have run NHS services for profit. In 2017-18, the NHS in England spent £13.1 billion on care provided by non-NHS organisations, equivalent to nearly 11% of the health service’s total expenditure. These companies have made no secret of the fact that they see Brexit as a key opportunity to expand their operations and market share. Since the British public voted to leave the EU, corporate lobbyists have been working to ensure that any future trade deal delivers maximum benefit and opportunities for their clients.
When working on a Lords Private Member’s Bill for greater transparency in public lobbying in 2017, I was alerted by a City confidante to focus on what might be happening with the NHS in the context of a UK-US trade deal post Brexit. I distinctly recall being told that some City lobbyists were almost wetting themselves at the prospect of the money to be made by gaining greater freedom and entry to trading with the NHS and its mammoth budget. Although this would not be privatisation in the traditional sense, it would nevertheless be an appropriation of NHS assets, with private companies pocketing more of the UK’s £170 billion annual health budget, even if they do not actually own the NHS. This represents a significant threat to the model of universal healthcare that we created and now enjoy in the UK.
Some campaigners have also raised concern that the terms of a trade deal with the US would allow investors to claim compensation if they lost access to NHS market, and that that would prevent any future policy change to reduce the current level of privatisation in the NHS. Similar concerns arose during the failed Transatlantic Trade and Investment Partnership talks between the EU and the US and was one reason why those talks collapsed.
Another area of significant interest is pharmaceuticals, where the US is expected to try to incorporate a new reimbursement strategy in a trade deal. Last year, at the behest of corporate America, President Trump accused the rest of the world of freeloading on the US, resulting in high prescription drug prices in the US. He claimed:
“When foreign governments extort unreasonably low prices from U.S. drug makers, Americans have to pay more to subsidize the enormous cost of research and development”.
He particularly blamed countries that,
“use socialized healthcare to command unfairly low prices from U.S. drug makers”.
This is because large state-funded health services such as the NHS buy drugs in enormous volumes, and therefore use their massive bargaining power to set the price at the lowest possible levels. Left to the market, prices are often significantly higher for America’s fragmented insurance-based private sector counterparts. President Trump vowed,
“to make fixing this injustice a top priority with every trading partner … America will not be cheated any longer”,
while his Health Secretary Alex Azar has threatened to use trade talks to try to push up drug prices outside America.
Big pharma spends hundreds of millions worldwide opposing any measures to limit drug prices, and the great success of the NHS’s NICE regime has been a prime target for some time. An outline of negotiating priorities for a US-UK deal issued by the Office of the US Trade Representative included a,
“Procedural Fairness for Pharmaceuticals and Medical Devices”,
section, which vowed to:
“Seek standards to ensure that government regulatory reimbursement regimes are transparent, provide procedural fairness, are nondiscriminatory, and provide full market access for U.S. products”.
Although one hopes it is unlikely that any Government would cede to such a demand, the NHS’s ability to hold down drug prices and demand cost-effectiveness before approving their use may be challenging, especially for a weakened Britain desperate to replace lost EU trade after Brexit.
The weakening of what in trade terms are known as non-tariff barriers—including domestic and EU-wide regulations demanding that drugs, technology and staff meet strict standards of safety and utility—may prove a key demand and, in my view, represents a significant risk.
Patient data is another prime area of interest to commercial healthcare firms. The NHS database holds the medical records of 65 million people—a priceless treasure trove of data for technological giants and healthcare firms, for whom real-world data is far superior to clinical data. Experts have warned that data could be a bargaining chip in a trade deal, and there is a risk that the public would not even know about this.
Trade negotiations have transformed in recent years. Recent deals have incorporated a digital trade section setting agreements on e-commerce and data access, and similar terms can be found in the White House’s negotiating objectives for the UK. The US wants data access, powers to use that data under its own laws, full intellectual property protection for its algorithms and an unrestricted market in which to sell the final products. Accessing such data ethically will obviously create concerns. Indeed, a group of Lords are concerned about this, and I believe further comment may be made on it later in the debate.
While the strict GDPR controls cross-border data flows, after Brexit Britain will be free to implement a new data-protection regime. The Americans would like us to have, as the US negotiating objectives put it,
“state-of-the-art rules to ensure that the UK does not impose measures that restrict cross-border data flows”.
Britain has not negotiated a trade deal independently of the EU for decades and appears unprepared for talks with the US. Indeed, while the American Government have already published their negotiating objectives, no equivalent document has materialised to date. In response to Questions in March 2019, the noble Baroness, Lady Manzoor, said that the USA’s objectives “are not surprising” and that it is too early,
“to say exactly what will be included in the future UK-US deal”.—[Official Report, 6/3/19; col. 611.]
Since then, there has been a public consultation on what the UK should seek in the UK-US deal. What now are the objectives and what will be the agenda in the forthcoming trade deals? Will the NHS be on the agenda? Dr Liam Fox has said that it should be. Is that government policy? If so, just what are the Government prepared to offer the Americans in the NHS and what chance will Parliament have to scrutinise and influence the outcome of those negotiations?
These are now decisions for the next Prime Minister. It is therefore imperative that both Boris Johnson and Jeremy Hunt move beyond platitudes about the value of the NHS and are open and transparent about their stance on these key areas. While wholesale privatisation remains unlikely, the NHS must be protected from creeping privatisation, whereby an increasing proportion of services are contracted out until it is nationalised in name only. Immensely valuable assets such as data should not be traded. Neither should changes be permitted that allow drug prices to rise, thereby requiring other NHS services to be cut to pay for them.
I hope that the Government will openly commit to specifically excluding the NHS from future trade deals and investor protection mechanisms, and to honouring the high regulatory standards currently enjoyed. If not, they should remember that that grossly misleading propaganda on the side of that double-decker bus will not be forgotten and a real price will be paid for it in due course when the public discover just how they have been duped.
Baroness Goldie (Con)
My Lords, are we are very tight for time in this debate, so I ask for noble Lords’ co-operation in looking at the clock. When it flashes, that suggests that something should happen.
Baroness Fairhead (Con)
I thank the noble Lord, Lord Brooke of Alverthorpe, for tabling this debate as it raises two topics that sit at the heart of our country’s identity and of our future—the National Health Service and our future trading relationships. I hope that this debate will flush out two things. The first is that although there is quite properly a fierce desire to protect the NHS for everything that it represents and provides to the UK people, it must not be under threat from trade deals, and we will have the Government’s continued reassurance on that. Secondly, as importantly, having been so reassured, this House must be able to reaffirm how important global trade is to our nation, provided of course that it is underpinned by fair and open international rules. My hope is that this debate will be followed by others that identify trade opportunities and highlight the tremendous benefits that they can bring, including in the vital sector of life sciences.
But first, the NHS. We all agree on the vital importance of the National Health Service. It is at the core of our culture and our national identity. Its impact and reputation were displayed most vibrantly last year, its 70th birthday. I had the privilege last year of representing the UK as a Trade Minister and saw the respect in which it is held worldwide, renowned for its excellence, quality and professionalism and for the dedication and compassion of its extraordinary staff.
We hold a number of elements dear. It should remain universal—open to all who need it. It should be free at the point of use and continue to provide healthcare excellence. Of course, we realise that those must be efficiently supplied within the limits of affordability. But it is worth pointing out that, according to Professor Meredith Crowley at the University of Cambridge, the UK and the US have similar outcomes while the UK spends just 8% of its GDP on health compared with 18% in the US.
I turn to some of the genuine concerns raised by the noble Lord and will add a couple of others. The first concern is that our healthcare will be privatised—owned, controlled and even regulated by foreign companies or countries. However, the UK has always maintained its right to regulate in the public interest. It has been clear that decisions on how to run public services are made by UK Governments including the devolved Administrations, not by our trading partners.
Some elements have indeed been opened up under the policies of Labour, Tory and coalition Governments: building management and some elective surgeries. Department of Health and Social Care accounts for 2017-18, the most recent annual figures, show that only 7.3% of spend by NHS commissioners was in the private sector, and that was slightly down on 7.7% the previous year.
What is more, our international public procurement commitments do not apply to the procurement of UK health services. As the Nuffield Trust recently reported,
“a trade deal would not have the power to stop the NHS being a free, universal service”.
Moreover, in my time as Minister, I saw how the Government have gone out of their way to protect the NHS. It is not just words. The draft WTO schedules retain an explicit exemption for the NHS. This, the Government have repeated, will not change in any future trade deal.
The second concern is that standards will be lowered. Again, I recognise why this is challenged, but the Government have been clear that any free trade agreement, whether with the US or another country, must maintain our high standards for businesses, workers and patients as a priority. The British people will accept no less. This, too, has been acted on. The transition agreements have retained all the protections. It is worth noting that newer trade agreements go further; for example, CETA, the EU-Canada trade deal, explicitly states that standards will not be lowered to gain trade advantage.
The third concern is that the NHS will be forced to pay considerably more for pharmaceuticals as a result of the US aim of achieving procedural fairness, which the noble Lord mentioned. I read the article by the noble Lord, Lord Brooke, in the House, and I agree with him that that is a point which it is hard to see the Government ceding. The aim of free trade agreements is to secure trade to the benefit of the UK. Higher prices would be unlikely to achieve that.
The fourth concern is, as the noble Lord said, that our medical records data will be misused. There is little doubt that the NHS database is a hugely valuable UK asset. Used properly, it has the potential to provide answers to some of today’s most challenging healthcare issues. We must embrace that, but it is right that the use of such data must be controlled and must absolutely comply with our rigorous data privacy requirements. I believe that that is very much the Government’s intention.
A final concern is the use of investor state dispute settlement mechanisms. It is claimed that foreign companies could force regulatory change and that they could force the Government to open up the National Health Service to competition. However, on this point the legal position is clear. Nothing in ISDSs can force a Government to regulate in a particular way. The Government have been clear that the NHS will continue to be free at the point of use for everyone who needs it.
I understand why some of the recent comments might have heightened concerns, but it is worth pointing out that President Trump did appear to clarify them later, saying, “I don’t see” the NHS “being on the table”, as he did not consider the NHS to be part of trade. However, to reassure both this House and the country, will the Minister repeat the assurances previously given?
Provided these concerns are adequately and appropriately addressed, there is much to look forward to in trade opportunities globally. I saw for myself the innovation, energy and excellence of UK exporters but, while we punch above our weight, we still punch below our potential. That is as true in life sciences as in other sectors. For example, I have seen first-hand the appetite for Healthcare UK—a joint business and government initiative to promote UK healthcare, including the NHS. What it has brought back to this country has achieved real benefits. I have also seen the excitement created overseas from the two life sciences sector deals, which are part of the UK’s industrial strategy. A lot more can be achieved.
I remain firmly of the view that trade, properly pursued, is a real force for good. For the people of the UK it supports jobs, investment, innovation and wealth, and for consumers it provides greater choice, more innovative products and services, and often lower prices. Therefore, alongside my request for reassurance from my noble friend about the ongoing commitment to the NHS, I urge this House to make more use of its expertise in debating trade issues and opportunities to make sure that we play our full role in helping the UK to harness existing trade deals and develop new ones.
Baroness Brinton (LD)
I too congratulate the noble Lord, Lord Brooke, on securing this important debate, which follows hot on the heels of the progress of what started as the Healthcare (International Arrangements) Bill, which I will refer to later.
I thought that it might be worth going back to look at the very beginning of the NHS—its embryo stage rather than its birth. One hundred years ago, Lloyd George created the Ministry of Health, following on from a decade of Liberal reforms, including the National Insurance Act, setting up the contributions for the old age pension, and the Housing Act to build homes fit for heroes, with sanitary conditions to improve public health. The embryo of the NHS developed very fast. In 1942, William Beveridge, another notable Liberal, published his famous report. He was very clear that it was about more than just providing a health service. He said:
“Now, when the war is abolishing landmarks of every kind, is the opportunity for using experience in a clear field. A revolutionary moment in the world’s history is a time for revolutions, not for patching ... Social insurance fully developed may provide income security; it is an attack upon Want. But Want is one only of five giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness”.
The NHS sits as the absolute foundation stone in tackling those five things.
The noble Baroness, Lady Fairhead, said that the NHS today is free at the point of need or the point of use. That phrase was used very much as the NHS was born immediately after the Second World War, but what does it actually mean? Unfortunately, I think that as this debate progresses, we will see that it means different things to different people.
I am aware, as many others are, of many services that are currently contracted out from what would have been seen as the original NHS contract between government and hospitals. GPs’ surgeries are, after all, privately run, but they operate to a very clear mandate from the NHS. One can have specialist medication delivered directly to one’s home, and many of the non-clinical services are now contracted out and are all part of the NHS that we are proud of.
However, Brexit has demonstrated that one of the lesser-known pillars of protecting our NHS is also at risk. Not many people know that we are protected by the EU directive on public health procurement. This is an issue that I have raised repeatedly in your Lordships’ House. I just want to note that it directly governs the way in which all public bodies, not just the NHS, can purchase goods, services and works, and it seeks to guarantee equal access to and fair competition in public contracts in EU markets. There is no need to publish procurement advertisements cross-border, which, as Ministers have repeatedly said in Parliament, is a key tool in preventing mass privatisation of the NHS.
If we proceed with Brexit—noble Lords will know that I hope we do not, but we must prepare for the event that we do—and should we leave with no deal, leaving the single market and the customs union, the NHS will lose its biggest but most invisible protector: this directive, which governs all public sector procurements in all member states. It defines those processes and standards and ensures fair competition for contracts; frankly, it also gives us protection against creeping privatisation.
To protect NHS institutions particularly, but not only, from American corporations looking to buy in after Brexit, we must write this EU directive into UK law. The NHS, as we all know, is completely dependent on this. It is in danger. If we do not transfer the directive into UK law, there is nothing to stop the lowest bid for any service always winning wherever it might originate from and without any standard of care.
While there was understandable concern about the TTIP discussions, this EU directive provided a guarantee that US companies could not come in and cherry pick our NHS. On 18 November 2014, the noble Lord, Lord Livingston of Parkhead, answered my Question in your Lordship’s House by quoting an EU Commissioner, saying that,
“Commissioner de Gucht has been very clear:
‘Public services are always exempted... The argument is abused in your country for political reasons’
That is pretty clear. The US has also made it entirely clear. Its chief negotiator said that it was not seeking for public services to be incorporated. No one on either side is seeking to have the NHS treated in a different way ... trade agreements to date have always protected public services”.—[Official Report, 18/11/14; col. 374.]
During a debate in March 2018 in which the noble Lord, Lord Brooke, and myself spoke, the noble Lord, Lord O’Shaughnessy, responded to our questions on procurement. He said:
“I can tell them that we have implemented out obligations under the EU directive. The Government are absolutely committed that the NHS is, and always will be, a public service, free at the point of need. It is not for sale to the private sector, whether overseas or here. That will be in our gift”—
that is, the Government’s—
“and we will not put that on the table for trade partners, whatever they say they want”.—[Official Report, 29/3/18; col. 947.]
In contrast to the confidence of the noble Baroness, Lady Fairhead, over protection of the NHS, alarm bells have been ringing for me ever since then, not least after President Trump and the US ambassador to the UK both commented that the NHS should be “on the table”, despite the fact that President Trump was asked to modify his words.
I am grateful that the BMA has repeatedly called for the NHS to be excluded from any future trade agreements. Its unequivocal message for the next Conservative Party leader and future Prime Minister is very simple: profit should never take priority over the protection of the health service and the health of citizens. It is a shame that neither candidate has chosen to respond.
Clinicians, managers and directors across the health and social care sector know that remaining in the European single market and maintaining open-border arrangements with free movement of healthcare and medical staff is vital. But if we leave, the most important things we must do are to re-enact in full the EU directive on public procurement and insist that the NHS and social care bodies which tender for contracts use it very clearly and carefully. It is vital that the NHS should be exempt from rules on competition that could lock in competitive procurement of publicly funded healthcare services across the UK—the devolved nations and England.
I agree with the BMA, which is calling for investor protection and dispute resolution mechanisms to be excluded from any future agreement with the United States or other trading partners. This will protect the ability of all four nations of the UK to regulate in the interests of public health.
So why am I so concerned? When we read the first published draft of the Healthcare (International Arrangements) Bill, alarm bells started ringing for some of us. I will quote from it:
“The Secretary of State may by regulations make provision … to give effect to a healthcare agreement”—
and,
“make provision about set-off arrangements between countries or territories”.
It said that a “healthcare agreement”,
“means an agreement made between the government of the United Kingdom and either the government of a country or territory outside the United Kingdom or an international organisation, concerning either or both of the following”—
which would include,
“healthcare provided in the United Kingdom”.
Because of an alliance between the noble Baronesses, Lady Thornton and Lady Jolly, the noble Lord, Lord Marks, and others in both our teams and, increasingly during the progress of the Bill, the support of learned judges and learned counsel, we were able to show that the Bill was not re-enacting the reciprocal healthcare arrangements between the EU and the UK but providing the basic foundation for completely free trade agreements. We managed to persuade the Government not to proceed in that way, so I am pleased to say that the Act’s final title is Healthcare (European Economic Area and Switzerland Arrangements) Act 2019, but I think we saw the true colour of the Government.
I am particularly concerned that Liam Fox stated that,
“the government of the day of whatever party … would determine exactly what the regulations were around the NHS”.
That answer is just not good enough. It is really important that we provide protection for our NHS. It cannot and must not be put up for sale, in part or in whole. Parts of it cannot be sacrificed. We have a duty to ensure that we put in all the protections that we need for any trade agreements that are negotiated.
I ask the Minister, as I have asked before, and I would be grateful for a clear answer: will the Government re-enact the EU directive on public procurement in full in UK law? Everybody, including previous government Ministers, agrees that this is the fundamental protection for the NHS under any future trade agreement.
Lord Desai (Lab)
My Lords, it is a privilege to follow the noble Baroness who, as usual, made an excellent speech on the problem before us. I thank my noble friend Lord Brooke of Alverthorpe. I do not want to praise the NHS; we know that we love it. The issue is not about whether we love the NHS. To a great extent, saying that we will protect the NHS is a statement that can be interpreted in a variety of ways. Every Government that I know of said, “The NHS is safe in our hands”.
However, in the 55 years I have spent in this country, the NHS has changed dramatically. What we want to protect—the core values that are popular with the public—is the concept of being free at the point of use. That is the core that people want to protect and that will command 100% of public support in our negotiations on a free trade agreement. We will go to a free trade agreement because those agreements, by and large, mutually benefit both sides. Trade agreements require give and take. It is not possible to say, “You give me this, but I won’t give you anything in return”. We must be absolutely clear about what precisely we want to protect as the core of the NHS and what is not so much up for sale, because that is a romantic description, but up for exchange—that is, what we will give to get something else. I say this because it is easy to go on in praise mode and forget that a trade agreement is a matter of negotiation.
One thing that has changed about the NHS is the purchaser-provider distinction. Noble Lords may remember that we have been discussing the NHS’s problems with funding, and keeping up with research and patient satisfaction, since the 1990s. We said that we should distinguish between the purchaser and the provider. The purchaser will always be the public; the state purchases health services and sees to it that they are free at the point of use. However, the provision of health services is not necessarily just in the public sector. Private sector providers can also be in the NHS and sign contracts with it. Those providers are not from just the domestic private sector. Actually, “domestic private sector” is a meaningless term because a British provider can be owned by Americans. That is capitalism, it is a very subtle system. So, we have agreed that private providers can supply services to the NHS. We also know that we buy medicines from not just British providers but others because the state does not manufacture medicines.
We have always had the valuable jewel of the NHS, constructed and kept free at the point of use with great difficulty, but it has been swimming in a tide of increasing privatisation. When it was founded, the idea was of state ownership, Fabianism and all that. It all changed in the 1970s; we are now in a very different world altogether. We escaped the full extent of the effect of privatisation because we went into the European Union, which was also socially democratic, by and large, even when it was right-wing. The Germans had a right-wing but socially responsible philosophy. That is why the public procurement directive, described in detail by the noble Baroness, Lady Brinton, has been very useful to us.
We have to decide at some stage what the core that we want to protect is. I do not agree that we will not let other people profit from the NHS. We are not going to exit capitalism; we are going to exit only the EU. We are not going to rebuild a system in which everything is done not for profit. It is not possible. Forget it. Decide on the core and the precise principle. Do we want the public procurement directive in there? That is a crucial decision. We have to be prepared for the free trade agreement negotiations and be clear in our mind on the precise core of the NHS that we want to protect. We already know that eyes and teeth have gone; we all go somewhere else for them. We also know that we often escape to the private sector when elective surgeries are available only after a delay because of rationing in the NHS. We have to decide precisely what the NHS we want to protect is. It is not possible to rule the NHS completely out of an agreement because that agreement will not start. Let us be clear about that. It would be good to have a non-nostalgic, non-romantic notion of what we want to protect. There is no doubt in my mind that we want to protect it—it is a unique institution and we must protect it—but we have to do so in an intelligent way, not in a way in which we will lose everything.
I mention just one thing about which there will be controversy: data. For some years now, the noble Lord, Lord Freyberg, who will follow me, has urged your Lordships’ House to think of the NHS’s dataset as an asset that we can earn money from. Once upon a time, we said that data were very valuable and that we cannot sell them, but every time I use my smartphone, my data are being sold. Data being sold is no longer a no-go area. We have to be clear: will we sell NHS data? That is a crucial point for whoever negotiates. Will the sale of data help the NHS’s finances or hurt its intellectual property rights? That is the question to be examined.
All I want to say, as I will not take up my full 10 minutes, is: beware of romanticism, nostalgia and thinking that we live in a socialist world. That world is gone.
Lord Freyberg (CB)
My Lords, it is always a pleasure to follow the noble Lord, Lord Desai—and yes, I will be covering that area. I thank the noble Lord, Lord Brooke, for putting down this timely and important debate.
Others will wish—some have done so already—to raise concerns about the extent to which health policy-making, the commissioning and provision of NHS services and the pricing of drugs and life-critical equipment could be impacted by future trade deals that might flow from the UK exiting the European Union. These are all noble concerns worthy of exploration in the time we have today, but I want to draw attention to an issue that I feel strongly about and that I fear has been neglected, despite its critical importance. I am in no doubt that the future of our health services, particularly new life-saving treatments and technologies, will be data-driven in many important respects. I am persuaded that the data which will underpin them—health data about UK citizens, which the NHS currently stewards on their behalf and with their consent—is very much on the table. It will provide a key focus for forward-looking trade negotiations, or else serve as an increasingly important bargaining chip, no matter what the Government might say about the NHS not, in and of itself, being up for grabs.
I have spoken at length on other occasions in this place about the potentially unique value of UK health data, as have other noble lords, and do not wish to repeat myself in this debate, when we are focused on making the case for broad-ranging and increasingly urgent protective measures. I will simply say that trade negotiations and the deals that result from them are all about capturing value, and it must be captured in the public interest, as well as for public benefit, at this pivotal time. I remind noble Lords that today is 4 July, and the people are said to have willed us to take back control of our laws, our borders and our money, not lower the drawbridge, roll out the red carpet and herald a great health data giveaway.
Notably, a question was asked in the other place on 18 June about this very issue, focusing on our future trading relationship with the United States of America. It followed President Trump’s recent state visit, and I note, without prejudice, that the response of the Secretary of State for Health and Social Care did not offer the questioner the comfort sought at that time. The Minister stated that,
“the NHS is not on the table in trade talks. We now have that assurance from the Americans. NHS data must always be held securely, with the appropriate and proper strong privacy and cyber-security protections”.—[Official Report, Commons, 18/6/19; col.114.]
All well and good, you might think, but in practice health data is not owned by the NHS per se and is not, as a matter of interest, subject to the control of the Secretary of State for Health and Social Care in any meaningful sense—at least, not where future trade negotiations are concerned.
The adequacy of the USA’s data protection provisions, which make it possible for us to share data with American companies, is currently determined by the European Union and covered by the EU-US Privacy Shield, which has been criticised for, among other things, data protection deficiencies, concerns about surveillance and, more recently, the lack of protection it affords where data is transferred for commercial purposes. Notably, however, under Schedule 1, Chapter 5 of the EU exit regulations, passed in this place back in February, the Secretary of State for the Department for Digital, Culture, Media and Sport will have sole authority to define what data is and is not on the table in international trade deals which the UK might enter into in the event that Brexit goes ahead, including patients’ data.
More precisely, the Minister will be able to specify, as the noble Baroness, Lady Brinton, has already stated, the adequacy of a third country; a territory or one or more sectors within a third country; an international organisation; or a description of such a country, territory, sector or organisation. As such, he or she will be empowered, Henry VIII-fashion, to make or break the digital elements of future trade agreements that we might agree or acquiesce to regarding data controlled by our NHS. I want to make plain my concern. Any exercise of these new powers before a comprehensive public engagement effort is undertaken and an explicit and meaningful commitment is made to radical transparency could result in mass opt-outs on the part of the general public and do irreparable damage to patient care, as well as to our vital life science and technology industries.
Happily, the same section of the regulations affords the same Secretary of State the opportunity to rule out or take off the table the data controlled by our publicly funded and accountable health sector globally, until such time as those measures are put in place. Will the Minister therefore commit to such a protection in the interest of building and maintaining public trust in the Government’s otherwise welcome strategy: namely, to maximise the value of healthcare data while ensuring a fair distribution of associated benefits?
In conclusion, can the Minister comment on the Government’s appetite to blaze a trail in data protection for NHS patients, at the same time as championing our much-heralded global and entrepreneurial future? A new Prime Minister could lead by way of international example and develop a new, dedicated health and care privacy shield so that safeguarding individuals is approached as the flip-side of a coin which proactively and proudly promotes some of UK plc’s best future industries.
Lord Lansley (Con)
My Lords, I am pleased to follow the noble Lord, Lord Freyberg. He said that the data we give as patients to the NHS is owned by the NHS; I remember that when I first became Secretary of State one of the many questions I asked was: “Who owns the data that patients give to the NHS?”. Many of the answers that I got followed the same pattern. There was discussion of the processes by which it was managed but I kept asking, “Who owns it?”. Inevitably, as with all these processes, it ended up with: “Well, you do, Secretary of State”. That was very often how it worked, I am afraid. One of the reasons why I continue to believe that the Health and Social Care Act 2012 made a big and substantial difference is because for the NHS, the Act created its independence to a much greater extent than used to be the case. The NHS owns itself rather than constantly, in every respect, being owned and controlled by the Government. That independence for the NHS is really important.
I should declare an interest. Your Lordships will know that I have pursued health matters in both Houses for a very long time, but I declare an interest as a patient of the NHS, which I have been repeatedly in the last two years. If there is anybody who has a reason to express gratitude to the NHS, I have that responsibility thanks to what it has done for me. I understand what “free at the point of use” means; I would be a bankrupt person if I was paying for everything that I have received from the NHS over the last two years. That incites envy on the part of people from other countries, including—I would say especially—my friends in America, among whom it incites a dramatic sense of envy. It is depressing how different the political debate concerning health is in the United States from that which applies here. The idea that President Obama was so heavily resisted, and by so many, in trying to pursue more equal access to healthcare in America is utterly incredible to us in this country. How and why did that happen?
There is a dramatic difference between the way in which the American political and commercial world views health and the way we view it here. That is why I am grateful to the noble Lord, Lord Brooke of Alverthorpe, for securing this debate now. It is a useful moment to put a few things on the table. When we put things on the table, it is to make clear where we start from. As the noble Lord said, were we to enter a trade negotiation with the United States now, we would not have quite the same negotiating objectives as those published by the US trade representative—but we should.
I will not repeat what my noble friend Lady Fairhead said, because she said it better than I could and covered a lot of important ground. The noble Lord, Lord Desai, brought admirable clarity to the way we think about these issues. Let me rapidly establish some propositions.
The negotiations on TTIP demonstrated that we can and should exclude foreign companies from health services that receive public funding or state support. That was in the EU negotiating mandate for TTIP and clearly has to be reproduced in any negotiating mandate we have for a US trade relationship. It was why Cecilia Malmström said in a letter to Unite the Union, back in 2016:
“TTIP poses no risk whatsoever to public services in the EU, including the NHS; nothing in TTIP would affect how the NHS in the UK operates at the moment; and nothing in TTIP would prevent a government from reversing policy as regards the involvement of private operators in the NHS”.
If that is reproduced in any future negotiations with the United States, it will provide ample reassurance. I say to the noble Baroness, Lady Brinton, that there is nothing to stop us reproducing what we have had in the past in our public contract regulations. The point is that we just have to do it. That is straightforward and I see no grounds for us not doing so.
There is nothing in the General Agreement on Trade in Services under the WTO that requires us to introduce healthcare services. They are excluded under the GATS. The Agreement on Government Procurement, which we debated during the Trade Bill, also does not bring healthcare into its coverage. From all of that, the protections and limitations are clear. Frankly, in any trade negotiation, whatever the United States says in an ideological sense about everything being on the table, it does not expect any of that to be available to them for negotiating purposes.
We know precisely what President Trump thinks about trade with the United Kingdom. He looks at our roads and sees German cars, when he wants to see American cars. He knows that we have a dramatic deficit on trade in agricultural products and that they come from Europe, because of the nature of the protectionist regime he sees in Europe, and he wants them to come from America. I am not going to get into a debate about cars and agriculture. It is not about the provision of healthcare services. If a hospital corporation in America wants to provide operations for NHS patients, it can do so through a UK company, as some presently do.
Ironically, American companies such as Humana, Aetna and Optum—which is a subsidiary of UnitedHealth Group—have provided services in the United Kingdom. They did so under the framework of external support for commissioning, which was established by the Labour Government in 2006-07. Again ironically, during the passage of the subsequent 2012 Act, Humana said it was going to withdraw from providing services to the NHS in the United Kingdom, because it did not see a future for private contractors in the NHS. That was during the passage of the 2012 legislation. There is nothing in the 2012 Act that requires competition. The Health Select Committee published a report, which was grievously misplaced, in that it said that competition is the operating principle of the NHS, under the Act. It is not; clinically led commissioning is the operating principle. Section 26 of the 2012 Act does not include a duty of competition; the driving principles for commissioners under the Act are the duties of integration and quality. The committee said Section 75 should be repealed. If it were, it would only have to be replaced by a new Section 75 which gave exactly the same power to make regulations, but the regulations do not have to require competition, competitive tendering and the like.
Where are the Americans going to look for something? We have to be very careful, because they really want to get American medicines and medical devices available through the NHS without the Government interfering in the pricing structure. It is not just here; it is right across the world. They see that 50% of the expenditure on medicines takes place in America yet they are only one-third of the international medicines market. There is a disparity in what they pay relative to large, single-payer systems across the globe, of which we are one, and they want to stop that. They want us to pay more, in the erroneous belief that in consequence they will pay less. In reality, they pay more because they have a system where their payers cannot control prices through the exercise of their purchasing abilities. The market system in America is open to very high prices, because of the third-party payment issue. The Americans are pursuing this, and we have to resist it. We have to resist investor-state dispute settlement applying to our regulations for pharmaceutical and medical device pricing. We have to make sure that, through our pharmaceutical price regulation system—or, as I would wish it to progress, something a little more transparent —we have a value-based price for the medicines and devices that we buy. None the less, we should allow the purchasing capacity of the NHS to be deployed effectively for the price that we want, and not give the United States, through any trade agreement, the ability to put investors in front of a tribunal to stop that happening. We must retain the right to control our medical pricing system.
Baroness Pitkeathley (Lab)
My Lords, I am always grateful for an opportunity to speak about the NHS, so I am particularly grateful to my noble friend. I am the first to admit that my commitment to the NHS is emotional or perhaps, as my noble friend said, nostalgic or romantic. I owe my life to it and never cease to be grateful, as is the noble Lord, Lord Lansley, for all the skill and support which saved my life when I had almost no chance of survival. Any suggestion of a threat to the NHS sees me running to its defence.
I am, of course, not blind to the fact that the private sector already plays a significant role in healthcare provision and that this was boosted by the 2012 Act. However, many who are trying to work around those reforms are discovering that it is co-operation, not competition, that our NHS needs. I shall return to that theme. Aside from emotion, I have practical reasons to resist any US-style inroads into our NHS which might follow Brexit. The US system simply does not work. It costs more, as we have heard, and the health outcomes are worse. If we care about the health of our society, why on earth would we want to go down that route instead of the European one of investing more in prevention and support services?
Is it not of sufficient concern that life expectancy in the United Kingdom is falling—a statement I never expected to make in your Lordships House? In 1920, men expected to live to 55 and women to 59. Later interventions, particularly the setting up of the NHS, meant that by 2015 that expectation had reached 79.2 years for males and 82.9 years for females. Of course, an ageing population brings its own problems but let us rejoice in that amazing achievement. However, the graph, which had been rising for decades, has flattened out and started to decline. The elderly, the poor and the newborn are worst affected. Life expectancy for those aged over 65 has dropped by more than six months and we have to ask why. Professor Dorling, head of the social geography department at Oxford says:
“Our faltering life expectancy rates show we have now got the worst trend in health anywhere in western Europe since the second world war”.
He also says that this decline can be linked to funding cuts, especially to social care. Professor Dorling and his colleague Lucinda Haim from the London School of Hygiene & Tropical Medicine argue that life expectancy started to decline in Britain as a result of the austerity measures imposed by the coalition Government in 2010. These cuts, which removed more than £30 billion from welfare payments, housing subsidies and social services, were some of the most severe made by any nation after the financial crisis.
The cuts had a cumulative effect on health because they triggered dramatic reductions in social care, meals on wheels, transport, health visitors and district nursing services. Moreover, community and voluntary services, which have always been so important in the care of the elderly and isolated, suffered similar reductions. If no one is visiting a lonely, isolated older person, no one notices that they have stopped eating or are having trouble moving about. They fall over. They are finally discovered and admitted to hospital, where they are given more serious interventions than would have been necessary if the care services had been available earlier. Then there is difficulty in discharging them because social care services are not available—even Jeremy Hunt has admitted that cuts in social services imposed by his Government went too far—or are inadequate, leading to another admission to hospital and the whole sorry cycle starts all over again, inevitably leading to shorter lives.
In addition, many of the services that promote longer and healthier lives, many provided by the charitable sector, have been curtailed. Smoking cessation classes, exercise groups and help with addiction are all now harder to access in most areas. The latest news about obesity being a major risk for certain types of cancer means that the reduction in the number of organisations that help and advise on weight loss must also be a concern.
Infant mortality is another sorry story. This reached an all-time low in 2014, since when the ONS reports that the rate has increased every year. The reasons include fewer midwives and health visitors, overstretched ambulance services and cuts to schemes such as Sure Start, which had a dramatically beneficial effect on the physical and mental health of mothers and babies. I would like the Minister’s assurance that the Government take this decline in life expectancy and the rise in infant mortality seriously and have a strategy for addressing them.
What has this to do with the NHS being included in trade talks? Surely, my grave concern about the need for more resources for health and social care means that I should welcome any possibility of increasing investment in our cash-strapped services. However, no US firm will be interested in providing the sort of social and preventive services I have referred to. There is just not enough money in them and their benefits take too long to accrue. In the US, social care budgets are low, as are taxes; most services are provided privately and the result is a soaring mortality rate. This includes spiralling rates of drug overdose, death and suicide as well as poor services for the young and the old. Is this a pattern we really want to emulate?
If we need an example of how foreign investment works or does not work in our system, we have only to look at the private care home sector. Four Seasons Health Care recently going into administration is only the latest example of how the debt-driven business models of companies in the care sector result in thousands of vulnerable people being made even more vulnerable by these failures. Some 140 homes closed last year and thousands more are at risk of failure.
No, it is not those things that drive the US trade people to want a stake in the health service. It is drug pricing that drives the trade agenda, as others have said. “Socialised” medicine and healthcare systems, as Donald Trump calls them, mean what he calls “unreasonably low prices” for drugs and not enough profit.
What we need in our NHS, which I am proud to call socialised, is not competition but co-operation, as I said, across health and social care, including housing, education and, of course, pensions. Our planning must be to promote this co-operation, not to provide a marketplace for drugs, data or any other services which can be cherry picked by those US companies waiting in the wings to make a quick buck.
While I am on my feet, I suppose I must once again ask the Green Paper question. Where is it? How much priority are the Government giving it? I have lost track of how many times I have asked the Government to be bold and honest about social care. Have they, for example, taken note of the new report out today from the committee chaired by the noble Lord, Lord Forsyth? It says:
“After decades of reviews and failed reforms, it is not clear how another Green Paper is going to make progress on addressing the challenges in social care funding ... Government action, rather than further consultation, is required”.
I ask again about the NHS and future trade deals. Will the Government be as bold and honest as necessary and commit to investing in social and health care policies that are better for health and longer life than any American policy or company could ever deliver?
Lord Purvis of Tweed (LD)
My Lords, we are grateful to the noble Lord, Lord Brooke, for bringing this debate. I agree entirely with the final points made by the noble Baroness, Lady Pitkeathley. As the son of an NHS ambulance driver who worked for the NHS for 30 years, I know intimately how it touches so many people across the country, not just its patients but its very large workforce. This has not entirely been touched on in the debate, but part of the negotiating mandate of the US is looking for greater access to the labour market of the NHS, so those who work for the NHS also have a consideration when it comes to negotiation of the trade agreements.
In some respects, the noble Lord, Lord Desai, was right to say that we need not repeat that we all consider the NHS a cherished aspect. The point made by the noble Lord, Lord Brooke, which I share entirely, is that because it is cherished it is inevitably a greater part of the political process, and therefore threats or unrealistic promises to the NHS have been used repeatedly on constitutional aspects over recent years. Now that trade has become part of the constitutional process with Brexit, it is right that we debate it in Parliament, and I am grateful to the noble Lord for giving us the opportunity to do so.
I was very pleased to see the noble Baroness, Lady Fairhead, in this debate. I very much enjoyed our processes during the Trade Bill. She is missed as a Minister with that portfolio. I mean no disrespect to the noble Earl, Lord Courtown—perhaps Hansard might record that he is nodding in agreement that she is missed in the department. I wonder if he might be able to indicate when we will have a Trade Promotion Minister for the UK. That is a very important role, and we surely cannot just wait until the Conservative leadership election is resolved for it to be filled.
On the point about the NHS being used politically, I saw that in the Scottish referendum when the SNP and the yes campaign said there were 48 hours before the vote to save the NHS in Scotland, and we have seen unrealistic promises on the side of a bus. The fact that it is being used politically means that, as the noble Baroness, Lady Fairhead, said, we have to develop further our consideration when it comes to some of the trade negotiations.
In that regard, we live in a perilous world in terms of the rules-based system. I think we have sometimes taken for granted, when we enter into agreements and treaties, that we expect all parties to adhere to them. We have seen some blurring of the lines on the Brexit consideration, where commitments that we thought we had entered into in good faith, such as financial commitments to the EU, could well be seen to be put on a reduced status, while China and the USA are moving towards a much more transactional approach. If the UK fundamentally supports the rules-based system, then any trade commitment in a treaty that we enter into also has to be resolute, consistent and robust. That is why, during our consideration of the Trade Bill, this House made amendments to the Bill to strengthen the role of Parliament when it comes to these international obligations.
Why is that necessary? It is because our single biggest trading partner outside the EU, the US, is not resolute and consistent when it comes to seeking opportunities for greater access to the NHS. We saw on a regular basis how unreliable President Trump is. Even on his state visit, he said two diametrically opposed things on two consecutive days, which of course rendered both commitments useless. One was that the NHS would be on the table, and the other was that it would not be. That is his approach; he deliberately wishes there to be uncertainty. The real tragedy is that he directs this towards his allies as much as he does to his trade adversaries, such as making up excuses on threats to US defence to put tariffs on the UK and EU aluminium and steel industry. We cannot rely on the US being as consistent as we need to be to protect our health service.
The House did the country a service by amending the Trade Bill. Clause 7(1) now has new text saying that the text of any potential agreement of a mandate has to be ratified by a resolution of both Houses. That means that there is a parliamentary guarantee that the reassurances, which have been repeated in good faith by the noble Baroness, Lady Fairhead, and Ministers, will then be tested and approved by Parliament and will then be part of an irreversible mandate for trade negotiations. That is particularly important for America because, as I referred to during the passage of the Trade Bill, I looked at the questionnaire that the Department for International Trade had put together for a future trade agreement with the US. There were no accompanying documents nor any suggested restrictions as to its scope. The NHS was not mentioned; I went online and looked up the NHS, but there was no feedback or any necessary process. We have had some Ministerial Statements but no clear position from Parliament. So the parliamentary lock is necessary, and I would be grateful if the Minister could state the Government’s position with regard to the amendments to the Trade Bill. Will the Government seek to reverse them, if and when the Bill ever sees the light of day in the other place?
That is important also because we currently have these kinds of protections through the European Parliament. My noble friend Lady Brinton gave a crystal clear outline of the way that the UK is protected under the aegis of our membership of the EU. It is also important because Congress ultimately has the lock on the US Government. When I analysed the negotiating mandate, I counted seven areas—including the provision of health services, those who work for it, those who have data from it and those who sell to it—that the US wants to open up. In addition, it wants changes to dispute resolution, as the noble Lord, Lord Lansley, indicated in a very good and measured contribution to this debate, which raises concerns about limiting our ability to reduce existing private provision. The Americans also want the agreement to cover all the UK but to restrict themselves to federal provision rather than covering US states.
It is interesting to note that the mandate is identical to the one that has been published for any future trade agreement with the EU. So if we diminish our protections while the EU is strengthening those, we will be in the invidious position that there will be a triangulating negotiating position whereby the US will see us as the weak link to the EU. We cannot afford to put ourselves in that position, and I hope there is emerging cross-party consensus for this. We have heard references not to the mixed funding provision, as the noble Lord, Lord Lansley, referred to, but to mixed public/private commissioning and funding in England for the NHS of, according to the House of Lords Library, £8.8 billion or 7.3% of its budget.
I stress in my last couple of minutes that we have had a debate almost entirely about the NHS in England, but there are major differences with the NHS in Scotland. Scotland has never had an NHS statutorily combined with that in England. It has separate founding legislation and separate processes altogether, but a trade agreement is a UK treaty. The issue of how a UK treaty will then cover health provisions reflecting a health service that has been founded and continues to be distinct from England’s means that the other element of the Trade Bill amendments—consultation of the devolved Administrations on the negotiating mandate—is of critical importance.
During the Liberal-Labour coalition in Scotland, Scotland did not develop the Labour reforms to expand the NHS internal market and remove trusts. The 2012 Act clearly does not apply to Scotland and, when it comes to data, as the noble Lord, Lord Freyberg, has said, we have a far more robust situation for the protection of NHS data in Scotland. Scottish data is a matter of pride, because it is unique in the world—consistent for 70 years and combining patient data and public health information. All these things are of critical importance: that the amendments to the Trade Bill are not reversed and that we continue to have these debates to ensure that we do not sleepwalk into a situation where we are undermining our NHS.
Ultimately, as the noble Baroness, Lady Brinton, has indicated, it comes back to the EU. There is a simple solution to all of this which is fairly straightforward: that we do not leave the European Union. We can now utilise the extremely large number of Liberal Democrat MEPs in the European Parliament to make sure that any future trade agreements with the EU also protect British interests.
Baroness Thornton (Lab)
I so enjoy these flashing lights on the clock. I crave the indulgence of the House for a moment before I respond to this debate, as I need to take the opportunity to correct something I said in a debate on 6 June when the House was discussing the treatment of those with learning disabilities at Whorlton Hall. At col. 219, I said that Mr Simon Stevens had in the past worked for Universal Health Services, the owners of Whorlton Hall. This was not correct. Mr Stevens in fact worked for a completely different company, UnitedHealth Group, as medicare CEO. I took my information from a newspaper article; that will teach me to not believe anything I read in a newspaper, as I thought I already knew. I apologise to Mr Stevens for my mistake.
I refer noble Lords to my entry in the register of interests. I thank my noble friend for initiating this very important debate and all noble Lords who have participated in it. I also thank the Library, the British Medical Association, the NHS Confederation, the Trade Justice Movement, UNISON and others for their briefing. I am sad that the noble Baroness the Minister is not with us today, but I am sure that the noble Earl, Lord Courtown, will do his best to make a health-related trade speech and answer the questions which have been posed in this debate.
As noble Lords have said, this debate has been made even more important since the recent visit of Donald Trump, and I was reminded when preparing for this speech what a great job this House did—as the noble Baroness, Lady Brinton, has said—in amending the then Healthcare (International Arrangements) Bill to decrease its scope to the European Union and Switzerland only. I have been reflecting on that Bill and how dangerous it would have been to our National Health Service in the trade negotiations that are coming down the track. She is absolutely correct: that Bill was paving legislation which would have put our healthcare in great jeopardy during trade negotiations. It is important to remind ourselves that this was brought forward by this Government. We certainly feel that we need to be at least vigilant in what happens next.
Managing the flow of goods and services across borders in a way that promotes economic growth while protecting—and ideally enhancing—public goods, including health, is of vital importance in an increasingly interconnected world. If the final Brexit deal involves the UK leaving the European single market and customs union, we will need to negotiate a significant number of trade agreements to maintain favourable access to global markets and limit the economic cost of Brexit. The noble Lord, Lord Purvis, is quite right. Like him, I look forward to the amended Trade Bill reaching the statute book and the locks that it contains.
As the UK Government look to develop their independent international trade policy beyond Europe, it will be critical to balance the potential economic benefits of trade against the protection of public health and safety. It is quite clear that the US will drive a hard bargain in any future negotiation with the UK. That should come as no surprise to us. The truth is that only the European Union, and perhaps China, has the economic heft to negotiate on near-level terms with the Americans, and even it struggles. The US objectives for its negotiation with the UK were published in February—with the caveat that they were largely produced for a domestic American audience, shorn of any notion of compromise—and they were strikingly ambitious in their demands. For example, alongside normal talk of tariff and quota removal, the UK must jettison food hygiene rules that deal with pork, chicken and dairy; the rules stipulating products that qualify for tariff-free treatment under the agreements must specifically incentivise production on US territory; and the agreement should include mechanisms allowing the US to take appropriate action if the UK negotiates an agreement with a non-market economy. We should also look at pharmaceuticals and equipment, as the noble Lord, Lord Lansley, mentioned. He is quite right to warn us about the need for caution here, because the US objectives seek provision on intellectual property rights that reflect current US legal standards, which are generally more favourable to rights holders than the European standard.
What worries us is whether, if we crash out of the European Union, it is possible that that could cajole Conservative MPs and the Government into holding their noses and signing on Trump’s dotted line after no-deal Brexit, and that the subsequent upheaval and economic uncertainty of no deal would see the UK grasping for anything that looks like an economic lifeline. The noble Lord, Lord Purvis, was quite right to give examples of the American President not being trusted. Look what happened with Mexico: even though it recently agreed to revamp its existing trade agreement with the United States and Canada, the President has now threatened to levy a 5% tariff on all Mexican exports into the US unless illegal immigration comes to a halt. If no-deal Brexit happens, and a lopsided US-UK free trade agreement is concluded, we can be pretty sure that the President will immediately come back asking for more.
I will address two issues that have been mentioned. First, as we know, many international trade agreements include investor protection on dispute resolution mechanisms. As noble Lords will be aware, these mechanisms allow foreign private companies to sue national Governments for compensation if they believe that their investments have been negatively impacted by public policy decisions. These legal challenges take place outside the normal court system and judgments generally cannot be appealed. We believe that there is a significant risk that these mechanisms could have a particularly negative impact on health and the development of new models of health and care.
There is a precedent for this: a Dutch private healthcare insurance firm sued the Slovakian Government under an investor protection agreement. The Slovakian Government lost the case and was ordered to pay €22 million in damages to the company. More recently, the tobacco company Philip Morris used a dispute resolution mechanism to sue the Governments of Australia and Uruguay. Those were not successful, but they were very expensive. That alone can have a chilling effect on policy development in countries which are not as well off and sophisticated as we are.
Despite the reassurances that the Government have already given on this, we need it on the record yet again that we will not enter into these agreements. The noble Baroness, Lady Brinton, is quite right: let us put down the existing European rules that have protected us and make sure that they are on our statute books. I say to my noble friend Lord Desai that that is not the least bit romantic: it is the hard-headed thing we need to do.
My second point concerns the issues raised by the noble Lord, Lord Freyberg, on the use and potential value of NHS data. Noble Lords will be aware that comprehensive longitudinal datasets controlled by the NHS represent a significant opportunity. I absolutely accept that the Government are, as it were, on the case. They know that there needs to be action, and I am intensely interested and concerned that Her Majesty’s Government move to set up an appropriate regime to ensure that the exploitation of NHS data benefits the NHS.
However, the question in this debate is how to ensure these measures are in place to protect healthcare data assets in the context of a non-EEA data protection regime post Brexit. How do we prevent large corporates extracting value unfairly from the NHS? Those are the questions we need to address.
To protect our NHS, we are calling for a hard carve-out on the provision of healthcare services, particularly the NHS, in any future trade agreements. That is the assurance I seek from the Government today. The Minister has been asked many fundamental questions here on how to protect our NHS in the future, and I look forward to his answers.
The Earl of Courtown (Con)
My Lords, I am grateful to the noble Lord, Lord Brooke of Alverthorpe, for bringing this topic to the House for debate and for the insightful contributions by Peers from all parts of the House.
We are extremely fortunate to have heard many well-articulated and expert contributions today from noble Lords who have considerable interest in and experience of not only trade issues but the UK’s public services, including the NHS. In particular, I thank my noble friend Lord Lansley for his contribution, particularly over the last two years, during which he has had treatment from the NHS. We are all very pleased that he is here to make that speech. My noble friend also set out the history of the NHS over the past 15 years, which showed how all Governments over that period have contributed to the NHS as it is today.
A number of issues have been raised which once again showed the central role that the NHS plays at the heart of our communities and the strength of feeling we have for this great institution. The noble Baroness, Lady Pitkeathley, elucidated the importance of the NHS and mentioned several different areas; I will answer some of the points she raised later. On the social care issue, she drew attention to the report of my noble friend Lord Forsyth, which of course the Government will respond to in due course.
I point out that the Government have been consistently clear about their commitment to the guiding principles of the NHS, and I confirm to all noble Lords that it is universal and free at the point of need. Our position is definitive: the NHS is not, and never will be, for sale to the private sector, whether overseas or domestic. The Government will ensure that no trade agreements will ever be able to alter these fundamental facts. As my right honourable friend the Prime Minister noted in January, the NHS,
“is one of this country’s greatest institutions. An institution that is consistently what makes the people of this country most proud to be British”.
That is why protecting the UK’s right to regulate in the public interest and to protect public services, including the NHS, is of the utmost importance. The Government will continue to ensure that decisions on how to run public services are made by UK Governments, including the devolved Administrations, and not by our trade partners.
Free trade agreements were mentioned by a number of noble Lords—in fact, all of them. No trade agreement has ever affected our ability to keep public services public, and trade agreements do not force us to open up the NHS to private providers. I can therefore reassure noble Lords on this point. We have always protected our right to choose how we deliver public services in trade agreements, and we will continue to do so. That is not simply the UK’s position but a principle which goes to the heart of trade in services under World Trade Organization rules. For example, the General Agreement on the Trade in Services specifically exempts services which are,
“supplied in the exercise of governmental authority”.
On top of this, the delivery of public services is safeguarded in the trade in services aspects of all free trade agreements the UK is party to. In the EU’s free trade agreements, the UK’s public services are protected by specific exceptions and reservations. As we leave the EU, the UK will continue to ensure that public services—including the NHS—are protected in all trade agreements it is party to, whether transitioned from an EU context or as a result of new negotiations.
The noble Baroness, Lady Brinton, my noble friend Lord Lansley and other noble Lords drew attention to the EU public procurement directive. As noble Lords will be aware, the directive was transposed into UK law many years ago now. It applies to the NHS where it carries out relevant public procurement. Her Majesty’s Government are committed to ensuring that the NHS can operate within a fair and rational framework for procurement as well as commissioning services. This will remain the case under all EU exit scenarios. If I can add anything more on that issue for the noble Baroness, I will write to her.
Baroness Brinton
The Minister says that the law was enacted in the UK but only in the sense that we accepted it at the time. I understand from the Government’s insistence on the legislation that needs to go through should Brexit occur that there are various things we need to re-enact specifically in preparation for the date of departure. I had understood that the public procurement directive was one of those. Can the Minister confirm that absolutely? I did not quite infer from his comments that he meant that it was safe now; I thought he was referring to Parliament’s original acceptance of the directive.
The Earl of Courtown
My Lords, perhaps I will be able to get a little further information on this while I continue with my speech, but if not, I will confirm one way or another in writing.
These protections are an integral part of the United Kingdom’s future independent trade policy, rather than being at odds with it. Free trade agreements can enable increased trade and investment, secure access for UK exporters to the key markets of today and the future, give consumers access to a greater range of products at lower prices, and make the UK more innovative, competitive and prosperous.
These benefits also matter for the public services we want to protect. Trade is vital for the NHS, which relies heavily on vital goods and services that come wholly, or in part, from suppliers based overseas. Trade enables the NHS to buy the best possible medicines and medical devices that industry—here and overseas—has to offer. That is in the best interests of NHS patients.
Trade agreements do not prevent Governments regulating public services effectively or require Governments to privatise any public services. The UK Government are committed to maintaining our high standards for consumers, workers and the environment, and to protecting our public services and access to affordable medicines, in any future trade agreements we conclude. Protecting public services, including the NHS, is of the utmost importance for the United Kingdom. The Government remain completely committed to ensuring that the NHS continues to provide excellent care that is, I repeat, free at the point of need for generations to come.
The noble Lord, Lord Brooke of Alverthorpe, addressed the importance of a US-UK trade deal. It is too soon to say exactly what would be covered in a future such deal. However, negotiating an ambitious free trade agreement with the US that maintains our high standards for businesses, workers and consumers is our priority.
My noble friend Lord Lansley also mentioned this area, and those standards and our principles will be crucial to any future deal. That includes protecting the NHS and our right to regulate public services. As my right honourable friend the Health Secretary recently commented on social media:
“The NHS isn’t on the table in trade talks—and never will be”.
Several noble Lords mentioned medical pricing and the United States. As I have made clear, the sustainability of the NHS is an absolute priority for the Government. As noble Lords mentioned, we celebrated its 70th birthday last year; I want it to celebrate many more birthdays for generations to come. We are very proud of the NHS and the internationally recognised way in which we assess the price of new medicines on the clinical benefit that they provide to patients.
Her Majesty’s Government recently agreed a deal with the pharmaceutical industry to ensure that medicines remain affordable for the NHS, while supporting a positive environment for the life sciences industry. That is why we are clear that, in any negotiations on future trade agreements, we could not agree to any proposals on medicine pricing or access that would put NHS finances at risk or reduce clinician and patient choice. This does not prevent a free trade agreement with the United States representing an opportunity to increase exports to the world’s largest market for the UK’s world-class life sciences sector. Helping to stimulate investment and innovation in and research into new medicines and technology is of prime importance.
As I have made clear, trade agreements do not force us to open the NHS up to private providers. Decisions about how to operate our public services are for the UK to make. Under existing competition rules, the NHS in England does not discriminate against foreign firms wishing to bid for clinical contracts, provided that they meet UK requirements and standards and are approved by UK regulators.
Lord Desai
My Lords, the noble Earl has twice said that there is no intention to open the NHS up to private providers. The NHS is open to private providers and has been since its inception because general practitioners are private providers. Can he clarify precisely what he is ruling out?
The Earl of Courtown
My Lords, the noble Lord, Lord Desai, is quite right. I speak in relation to any future trade deal and how we protect the NHS. Of course, the NHS is open to private companies in various ways and they serve it in many useful matters. I was looking at where we are and the future protection that we need for the NHS in any trade deals we enter into.
As I said to the noble Lord, Lord Desai, under existing competition rules, the NHS in England does not discriminate against foreign firms wishing to bid for clinical contracts—I know that I am repeating myself but this is important—provided that they meet UK requirements and standards and are approved by UK regulators. In practice, this means that foreign companies are already eligible to bid for NHS clinical contracts in England, regardless of whether the UK has a trade deal in place with a given country. However, few do so as they cannot readily meet our requirements. Only a small amount of NHS work is carried out in the private sector. Trade deals will not force the NHS to provide preferential access to foreign companies.
The noble Lord, Lord Freyberg, mentioned data, as did the noble Lords, Lord Purvis and Lord Brooke of Alverthorpe, the noble Baroness, Lady Thornton, and my noble friend Lady Fairhead. The UK has committed to maintaining a high level of data protection standards, which are set out in the Data Protection Act 2018. The UK recognises the importance of data protection to ensure that data continues to flow uninterrupted and to enable trading partners to build trust through the transparent treatment of personal data. Patient information will never be sold for marketing or insurance purposes unless the patient has explicitly consented. The Government’s principles governing data-sharing agreements entered into by the NHS, published in draft in December 2018, require that data may be assessed by third parties only where there is an explicit aim to improve the health and care of patients in the UK and a fair share of benefits from any agreement flow back to the NHS.
The noble Baroness, Lady Thornton, also mentioned data protection. The Government take seriously the use and sharing of NHS data. I reiterate what my right honourable friend the Secretary of State for Health and Social Care stated recently:
“NHS data must always be held securely, with the appropriate and proper strong privacy and cyber-security protections”.—[Official Report, Commons, 18/6/19; col. 114.]
Both the Department for Health and Social Care and the Department for Digital, Culture, Media and Sport are aware of the sensitivity of patient data; I can confirm that both departments will work closely together to ensure that trade negotiations will not undermine the safeguards we have in place around healthcare data that enable the public to trust in what it is used for, while realising its value and ensuring the fair distribution of associated benefits.
The noble Lord, Lord Brooke, the noble Baroness, Lady Thornton, and my noble friends Lady Fairhead and Lord Lansley mentioned ISDSs, which do not and cannot force the privatisation of public services. To be absolutely clear: ISDSs will not oblige the Government to open the NHS up to further competition and overseas companies will not be able to take legal action to force us to do so. The NHS will continue to be free at the point of delivery and of use for everyone who needs it. The protections here are in law.
The noble Lord, Lord Brooke, looked at the preparations for a UK-US trade deal and asked when we will publish our objectives. We are well prepared for those negotiations; there have already been four or five initial meetings. As for domestic preparation, we held a 14-week consultation on our approach to a US trade deal, to which we had nearly 160,000 responses, which we have carefully considered; we will publish a summary of them shortly. We will publish our negotiation objectives before negotiations begin and ensure that Parliament has a chance to consider them. We are laying the groundwork for an FTA through our UK-US Trade and Investment Working Group. As I said, it has met five times and will meet again before the Summer Recess.
Lord Purvis of Tweed
The Minister said that he would present the conclusions of the consultation plus the objectives to inform Parliament. This House amended the Trade Bill to state that that is not sufficient. If he could address that point in his last few minutes, I would be grateful.
The Earl of Courtown
The noble Lord mentions the Trade Bill, as he did in his speech. The Government are still considering the amendments that this House made to the Bill; we await whatever happens to the Bill in due course. He also mentioned the absence of a Trade Minister, which I of course regret. In due course, an announcement will be made by No. 10.
I thank all noble Lords for this informed debate. The range of voices that we have heard from across the House demonstrates the UK’s passion for protecting the NHS. Her Majesty’s Government share this passion. There will be some questions that I have not given full and detailed answers to; I will write to noble Lords on those issues. Our position is definitive: the NHS is not for sale and the Government will ensure that no trade agreement changes that.
Lord Brooke of Alverthorpe
My Lords, I am grateful to all noble Lords who participated in the debate; it has been very helpful indeed. It needed airing and there is further work to be done. I will need to read in detail the noble Earl’s response in Hansard to see precisely what assurances he gave or what he was instructed to read.
There is a good deal of agreement across the Chamber, which is very comforting. None of us is in any disagreement about the NHS continuing to be free at the point of delivery. That is assured; any Minister will assure us on that and we will agree. That picks up on my noble friend Lord Desai’s point about what will be on the table going into a negotiation. We may say that we do not want the NHS on the table. Some of us have asked for that; I am not quite sure whether the Minister has said that it will be on the table. In any event, the Americans, as parties to the negotiations, could still put it on the table, and the issues that they raise would have to be addressed. I am not anti-American—I hope that we get a good deal with the Americans and seek good trade deals around the world—but we have some basic principles to protect. Speakers from all sides identified a number of areas in which protection is needed. There was unanimity across the House that we do not wish to countenance reaching a deal that would force up the price of drugs in the NHS, which in turn would affect the NHS’s performance overall.
I am grateful to the noble Lord, Lord Freyberg, for his expert opinion on our precise arrangements on, the interest of DCMS in and the need for protections for data. I gather that there are some differing views on our approach to how data should be handled. I am not sure whether my noble friend Lord Desai’s view is that we should give it away for what we get back or seek to protect it. The one important thing—I stressed this point earlier—is that it is a very valuable commodity and is, in many respects, quite unique. A lot of people, not just in America but around the world, will have an interest in it. I hope that it will not be on the table; if it is, all efforts must be made to protect it and the benefits that accrue from it. The noble Earl, Lord Courtown, mentioned the “associated benefits”; I hope that they will be maintained primarily in the UK and that others elsewhere will not make a great profit out of them.
As the noble Baroness, Lady Brinton, my noble friend and others stated, fundamental to this is that we should seek, if we can, to incorporate the EU directive protection in our approach to trade negotiations. That is fairly fundamental; many of us would rest assured if we saw that.
I thank noble Lords for their contributions. I hope that we continue to have opportunities for full scrutiny of the Trade Bill that needs to come, particularly on this special aspect—it is so close to all our hearts—to ensure that, while change will always come, the best interests of the British public, not those of other countries, are at the heart of it. In particular, in answer to my noble friend Lord Desai, we must ensure that, during the course of the US trade deal negotiations, others do not gain benefits that we feel should not go to them unless we get an appropriate reward in return.