Transatlantic Trade and Investment Partnership

Jim Cunningham Excerpts

Tuesday 25th February 2014 Commons Chamber

[Mr Jim Cunningham (Coventry South) (Lab)]

I agree that this could lead to protection for employees and the environment being waived. We need stringent safeguards. It could also lead to further privatisations if we are not careful.

[Jim Sheridan]

I thank my hon. Friend and he raises the concerns of many of us. It is irresponsible and I believe negotiations should wait until we have a full understanding of the implications.

I spoke about labour rights, and I can certainly say more about this. As chair of the Unite the Union group in Parliament, I have spent my career fighting for the rights of workers here in the UK. Now I see an agreement that could undermine their rights and an opportunity lost to support our friends in the unions in the US. The US has ratified only 14 of the 190 International Labour Organisation conventions, unlike EU member states who have ratified them all. I understand that with this anti-union Government and the pull of the US Republicans we are unlikely to see the inclusion of rights to organise, rights to bargain collectively or as a last resort rights to strike, but there are some rights that are applicable across the EU, such as those on information and consultation, agency and temporary workers, and health and safety, which we could and should see included. If nothing else, the deal should not lead to a watering down of workers’ rights. I am pleased that the EU is consulting an advisory group of trade unionists, non-governmental organisations and employers, and that the Department for Business, Innovation and Skills is involved in a similar process. I hope that those in charge of negotiations listen to these groups, who I am sure will be keeping a close eye on labour rights, and act on their advice.

Many of my colleagues have raised the issue of the investor-state dispute settlement, which worries a good number of people. We already live in a world where certain global corporations seem to get away with breaking the rules and going over the heads of national Governments. The tax avoidance of global companies such as Amazon, Starbucks and Google, to name just a few, is unacceptable, but a stronger UK Government could hold them to account. The ISDS sets up a system where multinational corporations can challenge and sue Governments, but neither Governments nor individuals are granted rights to hold corporations accountable.

This is not just an empty concern: we see negative consequences in other countries. In Egypt, Veolia has attempted to use this system against the Government for raising the minimum wage. In Slovakia, the Government had to pay $22 million in fines after they reversed the liberalisation of health insurance. These decisions have been made for the good of these countries’ citizens and Governments should not be held accountable by business for making decisions that are for the good of society.

We can easily imagine this happening here. Energy companies are scaremongering about my party’s “freeze that bill” idea, and they might argue that it is a barrier to free trade. We see that we need to halt the market and make sure it is fair and competitive. We are protecting consumers and, in particular, the most vulnerable in our society who are paying through the nose for their energy. A 2015 Labour Government should not and will not bow down to pressures from these energy giants, and they should not be threatened by the existence of an ISDS. In recent history we need only look at what happened with the INEOS corporation at Grangemouth and the disgraceful way it treated its workers, with its attempts to blackmail the taxpayer for money.

Equally, Governments should be able to decide if and when industries should be returned to public control. As has been said, a key anxiety is that if the NHS is not exempt from the TTIP, corporations will use the agreement to force more large-scale privatisation following implementation of the Health and Social Care Act 2012 in England and Wales. What if a future Government or local authorities decided to return transport to public ownership? These measures could limit the ability of local or national authorities to use public money to achieve social and environmental outcomes through their supply chains. Decisions such as this should not be based on free trade. We need to retain our ability to run EU member states as we see fit, rather than as multinational corporations see fit.

A question was asked earlier about the possible impact of our leaving the EU on this potential deal. I would also ask about the impact of Scotland’s pulling out of the UK. Unfortunately, not for the first time, no representative of the Scottish National party is present. [Interruption.] I see that one has turned up at the last minute.

If we are to accept this deal, there must be three certainties. First, there must be realisable growth in jobs and incomes, particularly in manufacturing. Secondly, the ISDS must be dropped and regard paid to the exclusion of public services. Thirdly and most important, there must be improved labour rights that are binding on the signatory parties.

--- Later in debate ---

[Ian Murray]

I shall be unpicking some of the arguments during the short time available to me. I think that ISDS is the subject of one of the most important criticisms of this process, and I shall be interested to hear what the Minister has to say.

The TTIP has huge potential. The CBI has rightly described it as a “global economic game changer”. It can create more jobs here in the UK, improve the wages of British workers, and deliver a better deal for our consumers, but only if we get it right. As we have heard, according to some assessments the potential gain to British output is between £4 billion and £10 billion, equating to between 1% and 3% in exports. We must, however, be cautious about the overall figures, as they have been questioned by some leading academics. My right hon. Friend the Member for Wentworth and Dearne has been asking for an area-by-area assessment, and I think that such an assessment would allow Members to sell the deal to their constituents. Perhaps the Minister will reflect on that.

Given that the European Union and the United States account for 40% of global economic output and that their bilateral economic relationship is already the world’s largest, the opportunities are clear for all to see. Between them, they contain more than 800 million consumers, and the TTIP has significant potential for them as well. It is clear from the helpful briefing sent to all Members by Which? that there will be big prizes for them if we can get this right. Opposition Members strongly support the principles behind the negotiations, and hope that their objectives—job creation, better wages, higher standards and consumer benefits—can be realised. That, indeed, should be the focus of all EU activity.

With the fourth round of talks scheduled to take place next month, things are moving rather quickly, but we are worried about the potential for the talks becoming derailed. Legitimate concerns raised by Members in all parts of the House about some aspects are not being taken as seriously as we would like by the Government.

[Mr Jim Cunningham]

My hon. Friend has probably heard some of my colleagues say that the agreement will be all right provided that we have the necessary safeguards, such as employment rights. Multinationals should not be able to overrule an elected Government.

[Ian Murray]

My hon. Friend is absolutely right. I shall deal with some of those issues later in my speech, and I hope that the Minister will address them robustly.

The attempt to build momentum to get the deal through is understandable, given the political realities of the European elections in May, the fact that the European Commission is to be replaced this year and the very small issue of the US presidential election in 2016. Europe and the US are our most important markets. Indeed the US is the UK’s largest export market and the UK economy attracts a significant level of foreign direct investment from across the Atlantic, but we all recognise that more can be done to make it easier to tackle barriers and to improve market access. We hope that the trade agreement will do just that.

Crucially, the benefits of any trade deal must filter down to employees, SMEs and consumers. As my right hon. Friend the Member for Wentworth and Dearne has rightly said, the business case for the TTIP must be more than a case for business. He is absolutely right and in his speech he laid out in a measured way the issues that we should be looking at in assessing any final deal. I want to reflect on the four tests that he set. They are the thread that runs through the entire debate.

The first key test is the ability to deliver jobs and growth, with which I think we would all agree. Indeed, the EU should be focused solely on that issue. Secondly, the deal should be open and accountable. That reflects some of the other issues that have been raised by Labour Members. Thirdly, the aim should be to achieve the highest possible standards in respect of social and environmental concerns, data and wages. Fourthly, the agreement must allow leeway for national Governments to act in their own interests.

Through those four key tests, we will monitor closely the negotiations between the EU and the US, and the UK Government’s input into them. Likewise, we want the benefits that businesses experience to be passed on to consumers, whether through increased choice or reduced prices. It is rather puzzling that we have a Government who extol the virtues of the opportunities that the TTIP brings, yet ironically argue at the same time that we must leave Europe. Frankly, the TTIP is a shot across the bows for Tory Eurosceptics—a gang that the Minister has never been part of, for which he should be commended. The hon. Member for North Dorset (Mr Walter), who is no longer in his place, said clearly that it is in the UK’s interests to stay in the EU. I hope that the Minister will echo that when he responds to the debate. I firmly hope, however, that the UK is in the room for the negotiations and not carping from the room next door. This issue is far too important. That is why Labour will make the hard-headed, patriotic case, founded on the national interest, both for Britain in Europe and for change in Europe. To take up the benefits of an EU-US deal fully, we must be part of the EU.

Let me turn to some of the concerns that right hon. and hon. Friends have raised. First, they raised concerns about the ISDS aspects of the proposals, which have been well publicised and documented. Labour MEP colleagues and our sister parties in the socialists and democrats group in the European Parliament voted to scrap that mechanism, but they have faced an uphill battle in the EU Parliament dominated by Conservatives and a minority of MEPs. Therefore, we will continue to push for the need for effective and necessary transparency to be included in the final deal. As the BIS study conducted by the London School of Economics found, the ISDS would have little or no economic benefit and carries significant political risks. It is welcome, then, that the EU Trade Commissioner has decided to consult on that, which will give stakeholders an important opportunity to raise their concerns and increase the transparency of the deal. My right hon. Friend the Member for Wentworth and Dearne mentioned War on Want, which has rightly campaigned on the matter and I hope that the Minister will be robust in having the ISDS removed from the TTIP negotiations. Can he update the House on his current thinking on that and whether he will press strongly for that to be removed?

Secondly, as my right hon. Friend the Member for Leigh (Andy Burnham) has said, we are clear that the NHS must not be included in any agreement. In fact, all public services should be removed. In the UK, the demands of a 21st-century care system require integration. Markets are not the answer to the delivery of today’s health care. That would deliver something unwelcome in the form of fragmentation. The Government need to be clear on that, as they have sent out mixed messages to date. In response to my parliamentary question on 12 November last year, the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), said:

“The Government has not sought to exclude health services from the scope of the Transatlantic Trade and Investment Partnership (TTIP) negotiations.” —[Official Report, 12 November 2013; Vol. 570, c. 598W.]

That is in contrast to the response from Lord Green to the British Medical Association. He has also called for health care to be explicitly ruled out of the negotiations. He said that

“national interests, including those of the NHS, are protected.”

Those statements appear to me to be contradictory. Therefore, can the Minister set the record straight on the Government’s position on the NHS, public services and the negotiations that are ongoing? As I said, those are the areas that could result in the derailing of any agreement. If the Government would rule out the NHS now, we could move forward with more confidence and transparency in the agreement.

I have a couple of additional questions to put to the Minister. First, does he believe that agreement before the end of 2014 is possible or likely? Secondly, what representations have he or his colleagues made to the EU and its consultation on ISDS? Thirdly, what engagement are the Government having with businesses, charities, consumer groups and trade unions on the issue to garner support and involvement? Lastly, what engagement strategy are the Government planning with the public, as it is not difficult to see why organisations such as Which? and War on Want think that this deal is being negotiated in secret?

The size of the prize embodied in the agreement is considerable. It is a prize that must be shared among all—business, employees and consumers—and not just corporate interests. I hope that the Government will be able to respond positively to our concerns. I want to make it clear to the Minister that Labour Members are very much looking to co-operate. However, he should be aware that we will hold him to account and ensure that he does not give negotiators a free rein. I urge him to push for transparency so that the benefits of this major deal are clear for all to see.