NHS: Future UK Trade Deals

Baroness Brinton Excerpts

Thursday 4th July 2019 Lords Chamber

[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.

--- Later in debate ---

[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.