NHS and Future Trade Deals

George Hollingbery Excerpts

Monday 22nd July 2019 Westminster Hall

[The Minister for Trade Policy (George Hollingbery)]

It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for Hartlepool (Mike Hill) for opening the debate and representing the more than 160,000 petitioners who put their signatures to the document.

It is clear that the NHS is something that all of us here and the public as a whole care deeply about. There can be no doubt about that. We have heard and seen it in many forums before and we know it is true. However, I want to set this out right at the start, because I do not want there to be any room at all for ambiguity: I guarantee the House that the Government will protect the NHS in trade negotiations. That means no requirement to increase private provision, no allowing American companies to ramp up drug prices, and no undermining the safeguards on healthcare data. That is a guarantee that I, the Secretary of State and many others have repeated on many different occasions—most recently, when I appeared before the International Trade Committee last week and said the self-same thing there.

The NHS is an excellent healthcare system. It tops the Commonwealth Fund’s rankings of the best healthcare systems in the world. More than that, it is there for all of us when we need it the most. Those are not just words. Many of us—probably all of us—have an “NHS story” to tell of a time when the NHS helped us or those we love. I am afraid that mine is a story of when the NHS could not be there for someone.

I am married to an American. My brother-in-law could not afford proper healthcare for his illness because his insurance broker made the mistake of not renewing his health insurance for one week. There was one week’s gap, and in that one week he was diagnosed with a brain tumour and was thus both uninsured and uninsurable. I do not particularly want to elaborate on all that the family went through and faced over the next three years of his life, but it was pretty miserable. I was convinced before that it was only civilised to have the sort of system that we have here in the UK, and that experience did nothing but reinforce that view. It is simply not civilised not to provide healthcare for our citizens when we can afford to do so. The US health system is one where even those with insurance can never be sure whether their insurance will pay out; where insurance policies can often be limited in extent, condemning families to penury even when they started with quite a lot; where people with insurance routinely do not seek help at all because of the excess policies and where those who cannot afford to cover themselves are left to depend entirely on charity at best, or at worst are wholly abandoned.

As hon. Members might imagine, I want to protect the NHS and so do this Government. I cannot imagine a Government who would not want to do so. I have also called both campaigns today to make absolutely certain that the candidates whose names are on the ballot paper for leadership of the Conservative party also agree with that position—just to be 100% sure. Of course, they do both take that position.

Even if there ever were a proposal to pursue such a course, I think we in this room all know that, quite rightly, the British people simply would not have it. More than 160,000 people signed the petition that we are discussing today, and only last year a YouGov poll found that more than two thirds of people thought the NHS was Britain’s greatest achievement. Given that strength of feeling, why would this or any future Government who purported to represent the people use trade deals as some kind of back door to privatise the NHS? It just does not make any sense in anybody’s language. Even if a Government tried to do so, how would a trade deal get through Parliament? Not only could it not be ratified without scrutiny by Parliament, but there is separation between international and domestic law in our constitution, so any changes made to the NHS through a trade deal would need domestic implementing legislation, not just in England, but in Scotland, Northern Ireland and Wales. There is no back door here to sidestep Parliament. So much would have to change in our domestic legislation, and I cannot see any way—even if a Government were to decide they wanted to do things that way—that it could actually happen. The good news is that nobody has any intention to use free trade deals in that way anyway.

I simply ask that we agree that there is no prospect whatever of any British Government of any colour or flavour seeking to privatise the NHS by the back door. Can we please put that one to bed? There are perfectly legitimate reasons to discuss issues around the NHS, which I will come to in a moment, but let us please stop scaremongering and pretending that the Government are about to try to privatise the NHS. It is not going to happen.

So what about the particulars? How we protect our public services in trade deals is well known. We already have multiple layers of protection around the NHS and all our public services. The WTO’s general agreement on trade in services explicitly exempts services that are

“supplied in the exercise of governmental authority”.

The trade in services aspects of all agreements to which the UK is currently a party explicitly set out exceptions and reservations for public services. Indeed, my hon. Friend the Member for South Thanet (Craig Mackinlay) pointed out that Cecilia Malmström, the Trade Commissioner for the European Union, issued a letter at the time of TTIP making that absolutely crystal clear to anybody who wished to read it. She said that people could object to any number of things about TTIP in all sorts of ways, but the one thing they could not do was pretend that this was a way for US health interests to take over publicly provided health services in the European Union. It plainly was not.

No trade agreement has ever affected our ability to keep our public services public, and no one has ever forced us to change the way we run them. The Nuffield Trust, which is one of the most respected commentators on healthcare in the UK, has pointed out that:

“A trade deal would not have the power to stop the NHS being a free, universal service.”

I think it was the hon. Member for York Central (Rachael Maskell), who is no longer in her place, who made a point on section 75 of the Health and Social Care Act 2012. The Act was not about privatisation, but about placing the financial power to change health services in the hands of the NHS professionals whom the public trust most, and putting clinicians, rather than politicians, in control of healthcare. The 2012 Act did not introduce competition into the NHS; previous Governments introduced competition as a core part of their earlier reforms. The Act established a level playing field in which any qualified provider can provide NHS-funded services, to encourage greater diversity in supply and improve patient choice.

I ask Members to consider for a moment where they think NHS procurement and provision finishes and starts. I cannot imagine a world where we would not buy our pharmaceuticals from the private sector. There is no Government in the world—other than perhaps the Cuban Government—who design pharmaceuticals. Is it suggested that outsourcing accounting is somehow a bad idea? How different can accounting for the NHS be, honestly? What about building hospitals? Does that have to be done by the NHS? What about the equipment used in operating theatres? Does it have to be provided by the NHS? I think we all know that there are areas where it makes sense for the private sector to be involved.

Like the hon. Members who have spoken in the debate, I have no particular interest in the private sector providing actual straightforward healthcare. There are some cases where even that seems sensible. Perhaps if there is not capacity in a certain area of expertise and the capacity exits outside, it might be right to commission it. I think we can all agree that there are some areas around the national health service where there will always be provision by the private sector, because that simply makes more sense.

It is said that investor-state dispute settlement mechanisms would allow foreign firms to take the UK to court for not opening the NHS up to further competition. That, of course, is a concern, but it is not the truth. Let us be clear: ISDS does not and cannot force the privatisation of public services. The mechanisms only provide protection for established investments that companies have made in a partner’s market. At the end of 2017, UK businesses and investors of all sorts had around £1.3 trillion invested around the world, so those protections can be crucial, particularly where legal jurisdictions are perhaps a little less rigorous than they are here.

[Catherine West]

The Minister is being generous in giving way. Does he agree that there are precedents where companies, such as tobacco companies, have taken elected Governments to court and wasted, in private courts, a lot of money that could have been spent on public services, and that that is a serious dent in democracy as we know it?

[George Hollingbery]

The hon. Lady anticipates exactly the section of my speech that I am about to come on to.

I was talking about the £1.3 trillion invested overseas and the fact that ISDS arrangements are incredibly useful in guaranteeing the delivery of justice of some sort for those who have invested under certain terms in less certain legal markets. However, they cannot force the UK to change the way we run our public services. The proof of that—I hope that this will answer the hon. Lady’s question—is in the results. The UK has more than 90 bilateral investment treaties in place, yet there has never been a single successful ISDS claim against the UK Government on any issue. Nor has the threat of potential claims affected the Government’s legislative programme. I therefore do not believe that there is a chilling effect. The UK Government have legislated exactly as they wished on every issue, despite those 90 bilateral investment treaties.

That is not to say that bringing services that have already been opened up to private providers back into public ownership might not lead to challenges. That is true, and we should not sit in the Chamber today and not admit it. Of course, that does not necessarily rely on ISDS agreements. In the UK we have perfectly competent courts, and I suspect that many people might pursue those issues through the regular courts under contract law. However, ISDS indeed provides another avenue. Even the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), recognises that compensation would have to be offered if any fairly let contracts were not honoured because of a change in policy. That much is clear, and we have heard him say so directly. However, that is wholly different from being able to force the private letting of contracts that a state wants to remain public. That cannot happen under any ISDS arrangement.

Another concern that has raised its head today is medicine costs, and the idea that a trade deal with the United States would raise the cost of medicines the NHS needs. Across all nations of the UK, we have an excellent set of systems that generate great outcomes for patients at an affordable price. We are proud of the way we assess the value of and agree commercial deals for medicines here in the UK‎, which is good for the NHS, for patients, and for companies that want to do business with us. We are absolutely clear that in any future negotiations we could not agree to any proposals on medicines pricing or access that would put NHS finances at risk or reduce clinician and patient choice—and what on earth would the incentive be? We have a system in place that works, ensuring that patients have access to medicines they need at prices that are affordable to the NHS. That is in the best interests of patients in the UK.

It is simply not a matter for the UK that the US is a highly fragmented market for pharmaceuticals and medical equipment, and so has reduced buying power. Neither is that issue a matter to be contemplated in any potential trade deal. There is no protectionism here; it is simply a matter of market power. Ultimately, it is a matter for US domestic politics. If the US takes a different route, it will have more buying power. We have taken a different route, and we have much more buying power. I can think of a thousand different markets where the US has much larger buying power than us. Are we supposed to petition it suddenly in a US trade agreement to bargain away its buying power? I do not think so, and I do not see why it should be any different in this case.

Some people—not in this debate, but it is worth dealing with, as there has been so much interest in the debate, in terms of the number of signatories to the petition —have raised the related issues of patent protection, extensions and generics. There is a complex web of interactions around those issues. On the one hand, there is a need to allow innovation in pharmaceutical and medical technology research and, on the other, there is a need to ensure that when patents expire—I nearly said “when patients expire”; forgive me—generic or bio-similar alternatives are quickly brought to market. We will seek to balance those as we always have, in a way that stimulates research and innovation, together with the cost of supplying healthcare free at the point of use in the UK.

Let me turn to concerns about the potential use of NHS data. The Government take seriously the use and sharing of that data. I reiterate what the Secretary of State for Health and Social Care said recently:

“NHS data must always be held securely, with the appropriate and proper strong privacy and cyber-security protections.”—[Official Report, 18 June 2019; Vol. 662, c. 114.]

The Government will ensure that trade negotiations do not undermine the safeguards that we have in place around health and care data. Those safeguards allow the public to have trust in how and why their data is used, and it is incredibly important that we maintain them.

To be clear, free trade agreements of course have a role in data. At the Department for International Trade, we are tasked with ensuring that data flows on a legal, safe and secure basis. We would seek to review any rules in place to safeguard data, such as data localisation requirements, and ensure that they are not overly protectionist. However, that should not be confused with the data that actually flows. We set up the pipework, but whether or not the taps are turned on is a matter for the regulators. In our case, that is the Information Commissioner’s Office, which is entirely clear about the need for privacy and cyber-security.

I will deal with one or two other issues that were raised that do not fit neatly into the categories in my written speech. First, on FTA scrutiny, the hon. Member for Bradford South (Judith Cummins) will know full well that we laid a Command Paper earlier this year that made a full and generous offer on scrutiny. I am well aware of her party’s position on scrutiny, and I absolutely agree with her and her Front-Bench colleagues on the need for real transparency on and scrutiny of free trade deals. I absolutely understand about the incentives to control every part of the passage through Parliament by votes. I would happily sit down with her at some stage and talk through why I think that is perhaps not deliverable, and perhaps not exactly what she wants.

I am clear that we must have responsible scrutiny, and that the Government must be as transparent as they can under the auspices of an FTA. When negotiating an FTA, plainly there are things that we cannot reveal in public; otherwise, we simply give away any negotiating advantage we might have. At the same time, there needs to be accountability to Parliament. I therefore think we are largely of one mind, at least on the principle, if not the actual solution.

The hon. Member for Dundee East (Stewart Hosie) chose very carefully the two examples he gave—Norway and Switzerland. They, of course, are two free trade agreements that the EU has with partners that have very close arrangements with it in any event, in other ways. It is precisely because of the relationships that they have with the European Union that they cannot match in a continuity agreement what they can match in an agreement with the EU. The fact that those agreements are not as comprehensive as they might be is a consequence of our leaving the European Union, not of our inability to negotiate or, somehow, a failure on the part of the Government. I think we have achieved remarkable amounts, given the circumstances that Switzerland and particularly the EEA countries face.

I shall comment briefly on positive and negative lists, ratchets and so forth. In the end, having taken advice and listened to arguments from officials one way and the other, I have to say that, on the whole, it does not matter a great deal whether the list is positive or negative; the only thing that matters is that it is right, so that the outcomes—what the agreements actually achieve—are precisely what the UK wants. We can either include everything on the list and strike bits out, or exclude everything from the list and allow things in, but it seems to me that in the end that is a nice distinction, in the legal sense, and that actually what matters is the effect when we have finished. This is something that people talk about a great deal. In the end, all I want to do is ensure that we actually get the outputs that we need.

I hope we can agree that the picture is at least slightly rosier now than when this debate started. The legal protections are there to provide robust protection for the national health service. The commitment from the Government is there to ensure that that remains the case. The opportunities are there for us to make the most of our world-class experience and expertise in healthcare and the life sciences. As we look back at all the NHS has given us—particularly after its 70th birthday last year—we can be hugely proud of our past, but we can also be extremely optimistic about our future on the global stage.

I shall finish by repeating what I said earlier. This Government, the two candidates for the leadership, the outgoing Prime Minister and, indeed, all of us on the Government Benches are clear that we have no interest in privatising the national health service. We do not want to use free trade deals to do that either. We understand the concerns of the petitioners, and I hope very much that what I have set out today gives some reassurance.