NHS: Future UK Trade Deals

Lord Lansley Excerpts

Thursday 4th July 2019 Lords Chamber

[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.