NHS: Future UK Trade Deals
Debate between Lord Brooke of Alverthorpe and Baroness Goldie
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.