Transatlantic Trade and Investment Partnership

Caroline Lucas Excerpts

Thursday 15th January 2015 Commons Chamber

[Geraint Davies]

I do not have the numbers to hand.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I can tell the hon. Member for North Dorset (Mr Walter) that the Czech Republic, Slovakia and Poland, which are in trade agreements that include this kind of investor-state relationship, have been sued 127 times and have lost an amount of money that could have employed 300,000 nurses for a year. The idea that this is not a problem is patently wrong. This is about a corporate takeover and that is why it is right to oppose this particular mechanism.

[Geraint Davies]

I am grateful to the hon. Lady for that intervention, which underlines why, of the 155,000 people who contributed to the consultation by the Commission on TTIP and the ISDS, 97% were against the ISDS. As has been pointed out in other interventions, there are dangers to our procurement, food standards, rights at work and environmental protection. My personal view is that we should pull the teeth of corporate wolves scratching at the door of TTIP by scrapping the ISDS rules, so we can get on with the trade agreement without this threat over our shoulder.

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[Mr Robin Walker (Worcester) (Con)]

I agree with the hon. Member for Swansea West (Geraint Davies) that this is an important debate, I congratulate him on securing it and I welcome the fact that the Backbench Business Committee has granted it. I think the hon. Gentleman has drafted a motion with which no Back-Bench Member could disagree—whatever their views on the value or otherwise of TTIP. [Interruption.] I am glad to hear that the same goes for Front-Bench Members. There can be no doubt that having more parliamentary scrutiny is a good thing.

I shall talk about the Select Committee scrutiny that has taken place. The European Scrutiny Committee and its work have already been mentioned. I am a member of the Select Committee on Business, Innovation and Skills, which has an ongoing inquiry into this issue. As a member, I have been engaged in this work, and I believe we will be able to produce a balanced and useful report. I pay tribute to the hon. Member for West Bromwich West (Mr Bailey) who has conducted the inquiry so far in an even-handed and rational way. We still have some sessions to go and I do not want to prejudge the outcome of the inquiry, but I would say that on the issue of ISDS, my hon. Friend the Member for North Dorset (Mr Walter) was absolutely right to mention the precedent of all the free trade deals in which the UK has ever been involved and ISDS has played a part—and the fact that the UK has never lost a case.

That said, we heard from a lot of different bodies—the CBI, for example, the Institute of Directors, which provided written evidence, and the TUC, which has acknowledged the benefits that could come from the deal while having genuine concerns about it. I welcome the way in which most of those bodies engaged with us. Even some on the Conservative side of the Committee have concerns that TTIP is not sufficiently transparent. Much of that relates to the fact that the negotiations are being conducted by an unaccountable European Commission rather than Ministers directly accountable to this House and capable of answering questions.

[Caroline Lucas]

Does the hon. Gentleman agree that the only possible justification for having a separate judicial system for business is that existing courts are failing to arbitrate business claims fairly? If that is the case, we really need it, so can he provide some examples of where the courts in the countries involved in trying to get TTIP off the ground have been unable to secure the proper judicial remedies?

[Mr Walker]

I give the hon. Lady the example of the fact that the UK has never lost a case in ISDS resolutions, showing that this system is functioning in almost all trade deals around the world. Some of the purported threats I have heard simply do not stand up.

Moving on, I want to address a real concern about parliamentary scrutiny of this issue, particularly in respect of one particular organisation that has given evidence to our Select Committee and caused a significant amount of distress to members of all parties on that Committee. I regret to say that that organisation is the executive—not the members—of 38 Degrees. We heard from a wide variety of interests, including many who approached us with a view to getting their concerns discussed, accepting that parliamentary scrutiny is important. I really welcome that approach being taken by so many organisations.

Like many Members, I get letters from 38 Degrees and respect the concerns that their members raise. I have met 38 Degrees members in my constituency to discuss their concerns. I do not always agree with their campaigns, but I respect the interest in political discourse that they are encouraging. However, when it came to their evidence to the BIS Committee, I am afraid that the executive of 38 Degrees has let its members down. The attitude that their representative arrived with appeared to be that parliamentary scrutiny—the very purpose of this motion and the object of our inquiry— was secondary to the campaign in which he was engaged, and that it was for MPs to passively accept the views that he was there to express and in no way to question them.

When asked by the Committee Chairman about the approach the organisation had taken to the campaign, the spokesman immediately became defensive and started to attack politicians in general and the parliamentary process in particular. When asked whether public or official information that disagreed with their assertions was being provided to 38 Degrees members, he first sought to avoid the question and then misled the Select Committee.

The specific issue in point here is the letter from Commissioner Bercero to the right hon. Member for Wentworth and Dearne (John Healey) in which the Commissioner actually handling the TTIP negotiations at the time answered concerns that the Labour party had legitimately raised about the impact of TTIP on the NHS. The letter made it clear that there was no threat of privatisation of the NHS as a result of TTIP, and that as a public service it could be protected. It said that it was up to the UK Government and UK political parties what changes they made to the UK laws affected by it. On the issue of a risk about which Labour was concerned—the ability to change the Health and Social Care Act 2012 owing to ISDS—the letter said:

“If a future UK Government, or a public body to which power has been devolved, were to reverse decisions taken under a previous Government, for example by discontinuing services provided by a foreign operator, it would be entirely at liberty to do so.  However, it would have to respect applicable UK law.”

Having been briefed about this letter and seen it in the brief for our Select Committee, I did not think it was unreasonable to ask whether this information had been shared with 38 Degrees members to reassure them where they had concerns on this issue. The response of Mr Babbs was immediately to say, “Yes, we have shared that.” However, in supplementary evidence sent to the Committee a few weeks after the meeting, a representative of 38 Degrees had to admit that that this was untrue, writing:

“The Committee has requested further information about a letter from John Healey that I said I believed was on our website. Having reviewed all of the information on our website (as you will have seen, there is a lot there), I can confirm that this letter is in fact not on the website.”

Misleading a Select Committee is a serious matter, but I am sure that, if that were the only case, we would all understand that mistakes can be made. However, in the same conversation, Mr Babbs was asked about an article on Buzzfeed which bore the 38 Degrees logo, was headed “TTIP—Four ways a four letter word could ruin your life” and included the headline “Goodbye NHS hello permanent privatisation”. He disclaimed all knowledge of this article, and sought to imply that members of the Committee were out of touch if they did not understand that organisations have no editorial control over what appears on the internet, saying:

“I do not know if you are familiar with the way Buzzfeed works. Anyone can create a Buzzfeed article. It is not something that 38 Degrees produces. I have not seen that piece, so I cannot comment on it.”

In supplementary evidence, 38 Degrees has now written to the Committee as follows:

“I can confirm that the article was written and uploaded by a member of staff at 38 Degrees.”

It is, perhaps, welcome that 38 Degrees has acknowledged its mistakes and accepted some responsibility for the arguments that it has published. However, despite repeated questioning from a number of members of the Committee, the representative of 38 Degrees was not prepared to acknowledge any flaws in the way in which it had presented its arguments. Indeed, it has launched an aggressive campaign of letter-writing and intimidation. A Labour colleague’s researcher has been reduced to tears, and a Conservative colleague who is always softly spoken and reasonable has been accused of being a harridan. I do not think that that type of campaigning strengthens parliamentary scrutiny, or our ability in this place to hold the Government or the European Commission to account.

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[Caroline Lucas (Brighton, Pavilion) (Green)]

I, too, congratulate the hon. Member for Swansea West (Geraint Davies). I will of course give his motion my full backing.

Eighteen months ago, TTIP was little more than an obscure European Union acronym. Barely a word of caution had been uttered in the House, and barely a headline had been written about the risks that it poses to our democracy. How fast things change when people realise how much is at stake! I have received hundreds of e-mails from residents in my constituency who are concerned about TTIP—and yes, one of the things that concerns them is the national health service. I believe that TTIP and its investor protection provisions still pose an unacceptable threat to the ability of future Governments to, for example, repeal the Health and Social Care Act 2012, and reverse creeping privatisation in the public health sector.

We have heard assurances from the European Union, and from advocates of TTIP on both sides of the House, that such fears are unfounded, but I think it significant that, less than a month ago, the British Medical Association confirmed that it was continuing to lobby against the inclusion of health in TTIP. We are not helped by the fact that the Commission seems to convey a whole set of mixed messages when it talks about the issue. I think that, when that is added to the general secrecy that surrounds all this, we have grounds to be deeply concerned.

However, the case against TTIP, like the concern felt by my constituents, goes far beyond that. It comes down to an issue that many Members have raised today, the issue of the investor state dispute settlement. People are increasingly opposed to an agreement that could fatally undermine democratic law making in relation to food standards, animal welfare and environmental protection. Workers’ rights, consumer protection and education policy are also in the firing line.

Much has come to light about the true nature of the investor state dispute mechanism. Its central purpose is to give private companies new rights to sue Governments, in secret tribunals, for passing laws or regulations in the public interest if that might get in the way of making higher profits. I am not the only person to say that. A rampantly pro-TTIP briefing from a lobby group representing the City—bankers, private equity firms and so forth—is quite illuminating. It emphasises the central importance of so-called investor rights, and makes it clear that TTIP would

“set a precedent for future trade and investment agreements” .

Perhaps most alarming is what it says about how those investor rights should be upheld, namely:

“Some critics have suggested that investors should seek redress through the judicial system of the country where the investment is made before asserting a claim in investor-state arbitration. Such a requirement undermines the very reason why ISDS is included in most investment agreements—to depoliticise the issue in dispute and to provide for a neutral panel to examine whether a host government has breached its treaty obligations.”

Most of us would probably have assumed that our own judicial system, along with those in all the other member states, was designed precisely to guarantee neutrality and freedom from political interference. Why should we need a separate, corporate-only mechanism? No one has explained why it is required. The idea that it somehow depoliticises the issue strikes me as completely wrong. I believe that the aim is actually to remove issues from public scrutiny.

The briefing appears to suggest that the current judicial system with which we all live in our various member states is fine for our constituents—those who can still gain access to it after the cuts in legal aid—but private companies are somehow entitled to something that they should think is better. I find that disregard for the independence of our judiciary incredibly worrying, and there is no justification for it. Pieter de Pous, the policy director of the European Environmental Bureau and a member of the EU’s TTIP advisory group, has said:

“The EU and US have well-developed legal systems which have more than adequately handled foreign direct investment until now. ISDS would only lead to the erosion of laws that deliver public benefits, notably those that protect consumers’ and workers’ rights and the environment.”

I am still waiting to hear from someone, in the Chamber or elsewhere, who can explain why we need a separate corporate-led dispute settlement mechanism. I am glad that it is on hold—and that is not despite but because of huge civil society outrage in the United Kingdom and throughout the European Union. I think that we should be grateful to the campaigners who have helped to put the issue centre stage, and that we should not be complacent until the mechanism has been ditched completely. This week, the results of the European Commission’s public consultation showed that more than 97% of the 150,000 respondents opposed its inclusion in TTIP.

Even if we spent the rest of this so-called zombie Parliament scrutinising TTIP in minute detail, the ISDS would simply not be an acceptable proposition. Fashionable as it is—in some circles—to have a pop at the EU, let us make sure that we point the finger in the right direction. It is the Commission on which we should focus: it should be listening to the public, not dismissing and overruling them.

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[Matthew Hancock]

Yes, I agree wholeheartedly, not just about Africa but about progress on the India trade deal. This raising from grinding poverty of billions of people has come about because they have been able to access the world market economy. That is a vital way of fighting poverty around the world.

[Caroline Lucas]

Will the Minister explain why the Government’s leaflet on “TTIP myths” claims that a family of four would benefit by £400 a year yet makes no mention of the peer-reviewed paper from Tufts university that predicts that over 10 years the average working Briton will be more than £3,000 worse off as a result of the lower wages that TTIP will fuel? Why is that not included in his myths?

[Matthew Hancock]

The conclusion that trade raises wages and prosperity is borne out not only in the theory but in the evidence. The evidence of my lifetime has been that enhancing trade increases prosperity. That has happened in the decades for which I have been on this earth in a greater way than in any other time in history. About £1.5 billion in goods and services is traded between the US and Europe every day and 13 million jobs are linked to that. This ambitious agreement has the target, which it could meet, of adding as much as £10 billion to the UK. What does that figure mean? It is almost meaningless to all but the very largest companies.

This is what it means. Let us picture a small business owner who, five years ago, might nearly have gone under through no fault of his own thanks, in part, to the economic circumstances. Like so many smaller business owners, he did not give up and recently things have got better. The recovery might have delivered for him here, but he might want to expand and take on more staff and he might find people in America who want to be customers. He wants to sell his product to more people, but if margins are tight the prohibitive extra cost of the trade barriers means that that simply is not an option. Now, let us picture a post-TTIP world in which those costs do not exist. We have not only increased the UK’s GDP but managed to ensure that someone can trade, creating an apprenticeship or a job to fulfil those orders, and in America somebody can get a product that they could not get before. That reciprocity—that “something for something”—explains why free and fair exchange makes us all better off.

So how do we make that a reality? First, we must significantly reduce cost differences in regulations by promoting greater compatibility while maintaining high standards of health and safety and environmental protection, especially for cars, pharmaceuticals, food—which was mentioned by Members in all parts of the House—and financial services. Secondly, while tariffs are low on many goods, we must tackle the high remaining tariffs on, for instance, food, clothing and other goods that impede exports and hurt consumers. Thirdly, we must push for better market access for service companies, which make up almost three quarters of the UK economy. Where possible, we will seek a guarantee that our service companies are treated in exactly the same way as US providers and do not face any additional regulatory requirements beyond those that US businesses face. Fourthly, we must have more open and transparent public procurement opportunities. Why, for instance, should US rules require that only US steel is used in certain projects? Fifthly, we will target trade facilitation, removing some of the red tape and bureaucracy at borders, and cut unnecessary costs while speeding up the movement of goods.

This is a historic deal. I want to tackle some of the challenges and objections head on. Several Members raised concerns about regulation. In fact, TTIP provides an opportunity to take stock of existing rules on both sides of the Atlantic and to remove unnecessary duplication while ultimately making sure that we support a well-regulated market. This will be done without lowering environmental, labour or consumer safety standards. Nor will the inclusion of the ISDS provisions affect the ability of Governments to regulate. As many Members mentioned—my hon. Friend the Member for North Dorset (Mr Walter) brought it up first—we already have 90 such agreements in place and there has never been a successful claim brought against the UK.

Others expressed concern about the impact on jobs, yet time and experience show that trade creates jobs and supports higher wages. This is backed up by independent assessment. The overall impact on labour markets will be positive in the EU and the US, as real wages, whether of unskilled or skilled workers, will be able to increase.