NHS and Future Trade Deals

Debate between Catherine West and Stewart Hosie

Monday 22nd July 2019 Westminster Hall

[Stewart Hosie (Dundee East) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for Hartlepool (Mike Hill) for introducing the debate and speaking so well on behalf of the petitioners.

Let me start with a reference to Brexit, because I suspect that many of the concerns about trade deals, which may bring the NHS into play, will be driven by the loss of trade associated with Brexit. Let us remind ourselves of what the UK Government’s long-term economic analysis said. Under all the versions of Brexit that they analysed—the White Paper, the European economic area-type agreement, an average free trade agreement, and no deal—trade and GDP would be lower at the end of the forecast period than they otherwise would have been. The analysis went on to say that, under all those options—with the exception of the EEA, which does not apply—the situation would be worse if we had net zero migration from EEA workers. So before I come on to talk about trade, it is worth pointing out that we face a challenge relating to the retention and recruitment of staff if whatever Brexit we end up with drives a hideous and illogical end to the free movement of people.

The National Institute of Economic and Social Research’s analysis suggests that, depending on the type of Brexit, we could see a 22% to 30% fall in total trade. It went on to suggest that a free trade agreement with Brazil, Russia, India, China and all the major English-speaking economies, including the USA, would result in an approximately 6% uplift. I suspect that, if Brexit happens, Government thinking will end up being that, in order to make up some of the losses, we will have to have a quick win—a quick gain—probably with the USA. It is hard to see, for a variety of reasons, why the NHS would not be included in that.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does the hon. Gentleman agree that it is very concerning that, when the President was here on his state visit, he seemed to say that that was the No. 1 priority, despite the fact that our Prime Minister tried to deny that on the day?

--- Later in debate ---

[Stewart Hosie]

It was concerning that his initial response was, “Yeah, sure, the NHS—everything is on the table.” It was clawed back slightly the next day, but one wonders whether he understood what he said on the first day, or even what he said on the second day. The concerns out there among the public are very real, for the reasons I have set out. If we need to make up trade gains from the losses that almost every single forecast suggests we will have, it is hard to see how the NHS, or broader aspects of health, might not be included in some kind of trade deal.

The starting point for me is that we should not be contemplating exposing the NHS through trade deals, not least because the EU has made more trade deals with third countries than any other bloc, which we benefit from, and it has done so while protecting public services. It makes little or no sense to throw that away. The EU has protected public services such as the NHS in all trade negotiations. It has shown itself to be principled in its approach. Not only would we potentially lose access to those markets, but we do not have the means to replicate the agreements we already benefit from. The hon. Member for South Thanet (Craig Mackinlay) mentioned the Swiss deal, but it was of course not rolled over in its entirety. Indeed, a number of the reports that came out at the time said:

“The deal risks new limits on the export of agricultural products from the UK to Switzerland—for example, a possible ban on organic products…Switzerland may no longer recognise UK businesses as ‘authorised economic operators’, eligible for lighter controls at the Swiss border.”

At the same time, a second roll-over deal was announced—the Norwegian one—but while it included zero duty for industrial goods, it did not include services. It was described in the Norwegian press as a “crisis agreement”, and it did not cover technical regulations and rules for trade in food, animals or plants.

I mention those two because they highlight the UK’s weakness in the Brexit process. If we are not able to roll over in full with friendly countries with which we have long trading relationships, how on earth are the public expected to believe that we will be able to cut a deal with the USA to make up some of the losses from Brexit without having to sacrifice the NHS? On my last visit to the United States, I was told time after time that the UK will be required to put everything on the table, and the US will be required to put nothing on the table.

[Catherine West]

The hon. Gentleman is being very generous in giving way. Does he agree that one sector for which there will be implications is research and innovation? Is he as concerned as me about the prospect that a lot of our universities and the collaborations they do, which are in effect services, will be at risk? It will take an awful long time and an awful lot of effort to replicate them in a US trade deal.

[Stewart Hosie]

I am concerned about that. I am concerned that, even now, we are seeing relationships, partnerships and academic work being restricted, and doubt being cast on their continuation, for those very reasons. It would be tragic if health improvement work was not done or was lost from the excellent universities that undertake those studies.

The weaknesses that I speak about are where many of the concerns about the NHS lie, particularly in relation to a US-UK deal. They drive the impression, rightly or wrongly, that the UK will be involved in some kind of investor-state dispute settlement mechanism, and that Governments or other public bodies could be sued simply for protecting our health service.

I will give three examples to demonstrate why there are real concerns and why the public are extremely anxious. The first took place between 1995 and 1997. The Canadian Government banned the export of polychlorinated biphenyl waste to comply with obligations under the Basel convention, to which the US was not a party. The waste treatment company SD Myers then sued the Canadian Government for £20 million in net damages under chapter 11 of the North American free trade agreement—an ISDS-type arbitration scheme. That claim was upheld under NAFTA, even though Canada had taken action to remain in compliance with an international treaty.

In the second case, in 1997, the Canadian Parliament again banned the import and transport of the petrol additive methylcyclopentadienyl manganese tricarbonyl over concerns that it caused a significant public health risk. Ethyl Corporation, the manufacturer of the additive, sued the Canadian Government, again under NAFTA chapter 11, for $251 million to cover losses resulting from what it called the “expropriation” of its plant and to its “good reputation”. That action was upheld by the Canadian dispute settlement panel. The Canadian Government repealed the ban and paid Ethyl Corporation $50 million in compensation.

Cases that involve toxic polychlorinated biphenyl waste and a petrol additive that was deemed to have a public health impact were overturned. It is quite wrong for any corporation to be able to sue a Government simply for taking steps to protect the wellbeing of their citizens. I use those two examples on purpose; they may not have a direct clinical NHS procurement characteristic, but no one could doubt they were public health measures that were overturned as a result of a trade deal that allowed private investors to do certain things.

My final example is more local. Some time ago in Scotland, we had an increase in the prevalence of hospital-acquired infection. One of the actions the Scottish Government took was to remove private cleaners and return cleaning to NHS staff. Lo and behold, the incidence of hospital-acquired infection reduced dramatically. It does not take an enormous leap of the imagination for non-core work, such as cleaning, to be put out for competition. Had that been an international company, utilising an ISDS-type arbitration scheme, one can easily see how it may have sued the Scottish Government to win back that work and continue to make profit, irrespective of the health consequences.

I have heard what the petitioners have said, and I welcome the commitments made so far that the NHS will not be included in any future trade deal. However, it would be foolish not to recognise the concerns the public have or that fraying around the edges, when it comes to what appears to be non-core, non-clinical work, can still lead to the kind of problems the petitioners are concerned about. I await with interest what the Minister says. I congratulate those who signed the petition and brought this important matter before us today.

The Economy

Debate between Catherine West and Stewart Hosie

Wednesday 18th November 2015 Commons Chamber

[Stewart Hosie]

I think that the creation of every job is welcome for the person who gets it, and I think that the creation of well-paid, permanent and secure jobs is fantastic, as those provide not only the income that families need, but the security with which to build strong and stable communities. Of course I welcome jobs as they are created, but we need to look at every single part of the economy, not simply single metrics—whether they be good or bad. The Government’s record in the round is lamentable.

I mentioned the plan to cut tax credits. Of course change may be announced next week, but few believe that the stubborn Chancellor and his Government will actually stray too far from the plans originally announced. Those plans have a quite horrendous impact on households in Scotland and throughout the UK. For many real people, real families and real communities, the erosion of household income is quite extraordinary. The average figures of £1,200 a year or £100 a month is routinely used, and it is an accurate figure, but for some households the annual loss is around £4,000 a year. [Interruption.] The Tories may find this funny, but a loss of that amount of cash implies a marginal tax rate of 90% on some of the poorest working households in the country. If the Government were to propose that, the Tory Back Benchers would be up in arms, but because they are taking what they see as benefits from poor people, it is suddenly okay, because that is the way smirking Tories always think.

[Catherine West]

Does the hon. Gentleman agree that part of the problem with working tax credit cuts is that they are concentrated in certain areas, which means that there is a double effect on the local economy, where that money is no longer going into the high street or into the pockets of children and others and the poverty effect is multiplied?

[Stewart Hosie]

The scenario whereby pockets of poverty exist in communities that have been more reliant on tax credits or other benefits is well known. Of course, those communities always suffer disproportionately when this sort of cut is made, so the hon. Lady is absolutely right. That is an argument for having not simply an economic policy, but some form of regional industrial strategy that will deliver not just any old job, but good jobs in every part of the country.

The real failure of this Government’s so-called “long-term economic plan” is the absence of any real strategy to deliver inclusive growth, and that is what concerns me most. To the SNP, inclusive growth is essential if we are to narrow the inequality gap and absolutely vital to deliver the overall economic growth we need. The UK lost 9% in GDP growth between 1990 and 2010 due to rising inequality, so it is unforgivable to see the same mistake being made all over again.

Let us look at the big picture of the UK’s economic record in the Chancellor’s own words:

“We don’t export enough; we don’t train enough; we don’t save enough; we don’t invest enough; we don’t manufacture enough; we certainly don’t build enough, and far too much of the economic activity…is concentrated…in the centre of London.”

He went on to say in his Mansion House speech:

“We will tackle each and every one of these weaknesses with the same determination we have brought to tackling the deficit—and we’ll draw the whole government effort together in a single plan for productivity”.

The problem is that, on productivity, which is an essential prerequisite, very little has been done. The UK still lags behind the US, Germany, France and even Italy in GDP per hour worked. Even on a GDP per worker basis, the UK is still not competitive. The position in Scotland is broadly similar: both Scotland and the UK sit at the top for the third quartile. We should both be doing so much better than that.

The focus should be on productivity, innovation, internationalisation, and investment in infrastructure, skills and inclusive growth, which I have mentioned. To be fair, the Minister talked about investment and infrastructure. I will come back to that, however, because I am not sure whether her version of the world really matches up either to reality or to what was announced in the summer Budget. For example, on innovation, the 2014 Budget increased the amount available for research and development tax credits—which is to be welcomed—but the UK Government simultaneously reduced the qualifying expenditure.

On exports—I am glad this is back on the political agenda—the deficit in trading goods for 2014 was £124 billion. The deficit on the current account was £93 billion, up from £77 billion the year before. These numbers are all going in the wrong direction. In the Red Book, the contribution to GDP from net trade is negative for the entire forecast period. For the entire period of this Parliament, the contribution to GDP from net trade is negative in every single year. Where is the plan to actually encourage innovation and to support more companies to export and to drive up productivity?

We know that productivity requires investment. The Economic Secretary mentioned that and I said I would come back to it. In particular, we need investment in infrastructure. That is vital for the future. The Economic Secretary is right that the Chancellor and the Government have announced yet another review, but in terms of cold hard cash, capital expenditure forecasts were down for every single year in the Parliament between the spring budget and the summer Budget. That is not the way, if any Government are serious about infrastructure.

When we talk about investment to grow the economy, it is also vital to include investment in education. That will, of course, be the subject of the second debate today, but may I put on record, because it is important to this debate, our view that the Tory approach to education in England runs contrary to the investment approach needed? May I also put on record, because it is in context, my pride at what the Scottish Government have achieved: better school results, a record 119,000 full-time college places, a record 33,000 young Scots going to university, a move towards 30,000 apprenticeships every year and more children than ever from poorer backgrounds going on to further and higher education? This is the investment in education that will deliver the economic growth of the future. [Interruption.] If the Minister wants to chunter or defend the position of the Government in England, I will happily take an intervention.

Today’s motion talks about green jobs. There is much to commend an approach that supports the green economy and investment in it, because of the export potential that goes with those jobs. Like so much else, however, the Tory failure on the economy has been replicated in its approach to the green economy. We saw that with decisions on onshore wind farms, the calculation of the renewable strike price compared to nuclear, and the shorter contract length, all of which sucked investment from that important industry. We have seen it with the failure of successive UK Governments to address the inequity of connectivity charges to the grid over many years.

Any real economic plan should correct the imbalance of a £25 kW charge to connect to the grid in the north of Scotland, against a £5.20 subsidy in London to allow maximising the opportunity of investment. Indeed, the International Energy Agency has suggested that the stop-go political support for renewables is detrimental to establishing a more secure energy system, and that Governments

“must remove the question marks over renewables.”

Even the UN’s chief environment scientist highlighted the damage the UK Government’s “reckless, regressive and irrational” cuts are doing to the support that is necessary to the renewables sector.

[Catherine West]

Does the hon. Gentleman agree with the CBI, which said in a recent all-party meeting that the Government’s policy on the solar industry has severely affected investor confidence?

[Stewart Hosie]

I do agree. I thought it was telling that when the announcement in relation to onshore wind farms was made in this place to remove any support for those that had not passed every single hurdle, Tory Back Benchers were on their feet making the first attack on the solar sector as well. I agree with the hon. Lady entirely.