Lord Spellar
Main Page: Lord Spellar (Labour - Life peer)Transatlantic Trade and Investment Partnership
Lord Spellar Excerpts
Geraint Davies
I will give way first to my hon. Friend the Member for Wirral West (Margaret Greenwood), and then to my right hon. Friend the Member for Warley (Mr Spellar), who I know is pro-TTIP, so I will be glad to hear from him.
Geraint Davies
At a minimum, we should have a copper-bottomed arrangement such as Finland’s, which protects all health—public and private—as well as social care, from any intervention. At the moment those guarantees are not provided, and things are done on a case law basis. If there is private provision somewhere, that would allow an avenue for American contractors to move in.
Mr Spellar
My hon. Friend lays great weight on the ISDS. Can he say how many agreements Britain currently has that have ISDS provisions, how many cases have been brought against the UK, and how many have been successful?
Geraint Davies
My right hon. Friend knows that a large number of ISDS bilaterals are in play, and that no cases have been taken against us. He also knows that exposure to ISDS will increase by about 300%. If his pet dog goes around biting the neighbours, that does not guarantee that it will not bite him. Just because other people die from cigarettes and he has not, that does not mean he will not. We should protect ourselves against the provisions in ISDS, rather than hear those spurious arguments that are normally regurgitated by Government Members.
Helen Goodman (Bishop Auckland) (Lab)
On the specific point raised by our hon. Friend the Member for Warley (Mr Spellar)—
Helen Goodman
By our right honourable Friend, this is not about the number of court cases taken; it is about ministerial action being inhibited for fear of those court cases. I had that experience as a Minister, and our right hon. Friend is barking up the wrong tree.
Mr John Spellar (Warley) (Lab)
I declare an interest as the chairman of the all-party European Union-United States trade and investment group and as an unashamed supporter of trade. Over the centuries, trade has been of huge benefit to this country, particularly to the west midlands, which grew on the back of trade. Indeed, the west midlands is the only region of the UK that has a positive trade balance with China. Equally significantly, trade has been the engine by which hundreds of millions of people around the world have been lifted out of poverty. We need only look at the growth of China. I will come back to some aspects of that, as they were mentioned by my hon. Friend the Member for Swansea West (Geraint Davies). Hundreds of millions of people in China have seen their lives changed dramatically as a result of trade.
In debating these trade deals, there have historically been those in this House and in British politics who are opposed to trade. This is not a recent argument.
Kelvin Hopkins
My right hon. Friend will know that all the nations that have achieved dramatic improvements in their economies have done so with a degree of protection. The Chinese have used a massive devaluation of their currency against the western currencies behind which they have seen their economy develop rapidly. Protectionism works.
Mr Spellar
I am pleased that my hon. Friend wants us to move towards a more rules-based system that will enable us to develop more effectively. Trade has worked in that regard, and I am glad that he concedes that.
A great mythology is being developed around this. When I asked my hon. Friend the Member for Swansea West how many agreements the UK has had that involved ISDS, he was reluctant to reveal that the answer is 94. How many cases have been taken against the UK on that basis? My understanding is two. How many of those cases have been successful? My understanding is none. Mention is made once again of the very long-running Philip Morris so-called case. It is absolutely true that Philip Morris said it was lodging a case. Has it gone anywhere? Has it stopped the Australian Government taking action? Of course it has not. One of the more regularly cited cases is that of Slovakia’s health insurance system. We are often told that a Dutch insurance company managed to secure substantial damages from the Slovakian Government. That is true, because the case was about whether, under the existing contract, it could repatriate its profits to Holland. In a second case, which everybody seems to forget, the Slovakian Government won, and also got costs, because the tribunal held that the company was not empowered to intervene in the democratic processes of a sovereign state.
I particularly take issue with the Government over the fact that while the Leader of the House might talk about left-wing groups campaigning with scare stories, Ministers will not take on the myths so that we can get back to arguing about the issues that my hon. Friend rightly raised. The Government just hide away engaging in the negotiations and will not take these issues on.
Dr Andrew Murrison (South West Wiltshire) (Con)
If ISDS has been used so little, and given the concerns that have been expressed by all sorts of groups, particularly in relation to the NHS, why does the right hon. Gentleman think it is so important to have it as part of TTIP, which is an arrangement that, like my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), I would in general strongly support? ISDS appears to be the sticking point for a very large number of people.
Mr Spellar
I would strongly hold to that. I am just saying that ISDS is not the great problem that people are claiming. The hon. Gentleman mentions the NHS. The European Commissioner wrote to the former Trade and Investment Minister about the impact of TTIP on the NHS, saying:
“Member States do not have to open public services to competition from private providers, nor do they have to outsource to private providers.”
It is a decision for this Government, and nothing to do with any trade deal. She continued:
“Member States are free to change their policies and bring back outsourced services back into the public sector whenever they choose to do so, in a manner respecting property rights (which in any event are protected under UK law)”.
Geraint Davies
Does my right hon. Friend agree, though, that the essential difference is that ISDS tribunals are held in private, the primary focus being the investor and commercial and trading law, whereas a public court involves the public interest and transparency, which is intrinsically better? There are lots of cases where these big companies have claimed enormous damages, but I will not go into that. This is about the intrinsic shape of the system.
Mr Spellar
My hon. Friend and I will have to discuss this matter later. The problem is that such a process would require the creation of a supranational court, unless there was an agreement on reciprocity between the Supreme Court and the European Court, which might cause problems with Conservative colleagues.
There was very little controversy over CETA and the discussions with the Canadians, or those with the Koreans and all the other countries with which the EU has conducted trade talks, until we began discussions with the United States, which touched many people’s nerve endings and neurons.
Andrew Percy
The right hon. Gentleman is absolutely right that if we scratch beneath much of the opposition, we find blatant anti-Americanism. Does he agree that it is deeply offensive to the Canadian Government to describe CETA as a Trojan horse for TTIP, as if “little Canada” were doing America’s dirty work? That is the implication, and it is deeply offensive to Canada, a country with standards of protection that go beyond our own in many areas.
Mr Spellar
I thank the hon. Gentleman for a point well made.
My hon. Friend the Member for Swansea West then talked about China and, interestingly, about the environmental situation there. If the EU and the US do not do a trade deal to enshrine the current free trade and democratic liberal order, the Chinese will be the ones setting the parameters of world trade, and he has rightly identified that they might be much less concerned about issues such as workers’ rights and the environment.
With regard to the Canadian deal, my hon. Friend raised concerns about food and the implications for geographic indicators—Welsh lamb and so on. In fact, one of the great attractions not only for farmers in the UK but for framers across Europe, particularly southern Europe, is the provision for geographic indicators; and, to be frank, one of the attractions for Canada and the United States is the ability to sell GM, so a trade of GM for GI might well come out of these talks and be of advantage.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Will my right hon. Friend give way?
Mr Spellar
Unfortunately, the clock is running.
As I indicated earlier, the Leader of the House talked about scaremongering by the far left, and we have received emails again from 38 Degrees, which will no doubt be castigating me again on Facebook. Interestingly, its standard email this time had a link to a pamphlet by John Hilary of War on Want published by the Rosa Luxemburg Foundation. I excuse the ignorance of Conservative Members, but a number of Opposition colleagues might be aware of the dissident communist Rosa Luxemburg, if not necessarily of the Rosa Luxemburg Foundation and its deep links with Die Linke in Germany, the far left party that grew out of the old East German Communist party. There is a lot to be said against the old East German Communist party, but it was pretty good at propaganda and agitation. There are valid arguments to be made, but hon. Members must be clear about the driving force behind the campaign.
Unfortunately, the right hon. Member for Hitchin and Harpenden (Mr Lilley) touched on an area alluded to by my hon. Friend the Member for Swansea West: the European Scrutiny Committee. It was the neuralgic reaction of some Conservatives to anything involving the EU. Let us be frank: one of the key enablers of our conducting trade negotiations around the world is our membership of the EU. It enables us to negotiate through the combined strength of the EU, contrary to the views of Mr Farage, who believes we could somehow negotiate trade deals on our own. When we campaign next year to remain members of the EU, we will find that many of the arguments being made against TTIP reflect the arguments against the EU. In the modern world, there will be some trade of sovereignty for effectiveness and relevance, and that is why we should support the agreement.
Christian Matheson
My hon. Friend makes a good point, but I now wish to give an example of the perils that ISDS may bring. It involves another regime, but it could easily be transcribed into TTIP. Veolia has sued the Egyptian Government for alleged breach of a contract for waste disposal in the city of Alexandria on the basis of a bilateral agreement between France and Egypt.
At a time when Egypt is in a vulnerable and uncertain position politically, we should be helping it to develop democratic structures. When the Egyptian Government introduce a minimum wage that will probably benefit most ordinary Egyptians, we should support their action, but apparently Veolia has sued the Egyptian Government for taking that action. How stupid and short-sighted is it to sue the Egyptian Government and lower the standards of living of ordinary Egyptian workers at a time when we are trying to persuade Egypt that Islamism and the Muslim Brotherhood are not the way forward? This is an example of a western corporation undermining the wellbeing of ordinary people. That is what ISDS does: it enshrines the rights and priorities of globalised corporations over and above those of ordinary people, and the results could be catastrophic.
Mr Spellar
As I made clear earlier when I mentioned the Philip Morris case, lodging a case and winning a case are not one and the same thing, but my hon. Friend may be right. Has anything happened to the Veolia case?
Christian Matheson
I believe that it is still going through the process, but it is the principle on which the case is based that concerns me: the principle that corporations should have their own private mechanism for resolving disputes, rather than adopting the accepted legal procedures of the country in question.
Helen Goodman
The point that I was going to make was that the Office for Budget Responsibility, in its forecast of GDP out to 2020, has an uncertainty of 6% in GDP. That is £160 billion, so we lose the £7 billion of economic benefits in the rounding. I am not saying that there will not be some economic benefits, but we should consider how significant they are and weigh them against the disadvantages that other hon. Members have mentioned. Will this have a significant benefit for our level of exports? By way of comparison, the impact on the level of growth in the markets to which we export is expected to be £338 billion over the next five years. If we have variations in the exchange rate, that will be far greater than the possible benefits we can get from this trade deal.
I am resting my case on the analysis from the Minister’s Department. On the assumption that the Department has got this right, each person in this country would benefit to the tune of £110 a year, or about £2 a week. It is very nice to have £2 a week and I am sure that we would all rather have it than not, but if the price that has to be paid is a loss of working conditions, labour standards and potential improvements in the national minimum wage or national living wage, the benefits will not in practice accrue to ordinary people in this country. That is why people have doubts about this.
Colleagues have raised the concerns about the national health service, the environment and food standards. I think that the carve-out in the European Commission’s negotiating mandate secured by the French on audio-visual services is extremely important; it is also important that we maintain our cultural resources.
Let me come to the big downside of TTIP, which is the loss of sovereignty inherent in the investor-state dispute settlement. The intellectual integrity and honesty displayed in the speech of the right hon. Member for Hitchin and Harpenden (Mr Lilley), a former Secretary of State for Trade and Industry, made it a very important contribution to the debate.
Mr Spellar
Is not the logic of the right hon. Member for Hitchin and Harpenden (Mr Lilley) just as much that he would rather we were not involved with the EU either, as another supranational body? Is there not a danger in this line of argument?
Helen Goodman
There is nothing in our arrangements with the EU that is similar in any way to the private court system under the ISDS. That was the point that the former Secretary of State was making.
My right hon. Friend the Member for Warley (Mr Spellar) said earlier that not many cases have been taken under ISDS or won under ISDS, but it inhibits ministerial action because Ministers are worried about court cases. My hon. Friend the Member for City of Chester made the point that in developing countries the costs of running these court cases are a further inhibition on ministerial and democratic action.
Daniel Zeichner (Cambridge) (Lab)
I, too, thank my hon. Friend the Member for Swansea West (Geraint Davies) and the Backbench Business Committee for initiating this important debate.
TTIP may not be on the lips of everyone in every constituency, but there is great interest in it in my constituency, so much so that during the general election campaign, when I was pleased to be joined on the campaign trail by the wife of the then Leader of the Opposition, she was absolutely amazed to find that the inhabitants of the first three houses whose doors we knocked on all wanted to talk to her about TTIP. I think she went away appreciating that Cambridge is a very special city indeed.
Such is the interest in the city that we have had a series of public meetings, one of which I organised. I was very pleased to welcome my colleagues Richard Howitt and Lucy Anderson, who are both Members of the European Parliament, to help throw light on what for many people is still a deeply opaque process.
Of course, I agree with other hon. Members that trade agreements are important, but they are also intricate and complicated, perhaps inevitably so. For many of our citizens they seem very remote, and they are often negotiated under wraps. Even to those of us who are following the detail, TTIP can seem fiendishly complex, but it is so important that it cannot be ignored, which is why we must keep asking questions and make sure that they are answered to our satisfaction.
As other hon. Members have pointed out, of course we are in favour of trade agreements. They bring significant benefits and boost trade and growth, and they should secure and create jobs, bring down costs and extend choice for consumers. The Government tell us that an ambitious agreement could add as much as £10 billion annually to the UK economy in the long term, which would be good for jobs and good for consumers. That would, indeed, be welcome, but those economic benefits are contested, and I suspect that, in truth, the reality is that there is simply no way of knowing for sure at this stage what the potential gains may be. We should beware of hyperbole. We need to be able to weigh the possible benefits against the possible risks, which is why the Government should assess, in a transparent, comprehensive manner, what the real economic impact might be. I understand the Business, Innovation and Skills Committee has recommended that this assessment should set out the potential benefits and risks on a sector-by-sector basis, which would probably provide much sought-after clarity.
There are many concerns about TTIP, and they have been well rehearsed in this debate. I share with many hon. Friends the concerns about the impact on public services, particularly the national health service. The investor-state dispute settlement mechanism might gift transnational corporations the power to sue countries for profits that have been lost as a result of that country’s policy decisions. There is a very real fear that the inclusion of the ISDS mechanism will prevent a future Labour Government from reversing the Health and Social Care Act 2012 in England owing to the fear of the cost of legal challenges they may face.
Mr Spellar
If companies have existing contracts as a result of privatisation, can they not, under contract law, take action in the domestic courts? Is that not the problem, rather than that there will be a new legal procedure?
Daniel Zeichner
I certainly agree with my right hon. Friend that real problems are created by our own Government, and we do not just have to fear TTIP, but TTIP might make the situation worse. As someone who endured the horrors of a tortuous and expensive tendering process for our health services in Cambridgeshire during the past few years and has seen it collapse spectacularly and expensively in recent weeks, my advice to the House is: “Don’t go there.”
We have had reassurances from Ministers. Recently, the Minister for Skills said that
“the Government were entirely satisfied that the position regarding TTIP would not threaten the public status of our NHS or other public services. We were entirely satisfied that there was absolutely no intention on the part of the Commission in negotiating the agreement, or on the part of any other EU member state, to allow the status of either our public services or theirs to be threatened.”—[Official Report, 9 July 2015; Vol. 598, c. 568.]
I must say that I am not so sure, not just because of who told us that, but because, from what I have heard, my constituents are not satisfied and because we will not be satisfied until we have concrete proof that a TTIP deal would not irreversibly expose the NHS to competition and threaten its very basis as a public service.
Finally, TTIP is no ordinary trade agreement. Its prime objective is the removal of regulatory barriers to trade, but there is a significant gap between EU and US regulations in a host of areas—safety at work, food production, the use of pesticides and GM crops are just some of them. The danger is that instead of TTIP harmonising regulations upwards to remove regulatory barriers, it will seek the mutual recognition of regulations between the EU and the US. That will inevitably lead to pressure for deregulation in the EU, as EU businesses find that they can no longer compete against US companies that operate to inferior standards of environmental protection and health and safety legislation.