Transatlantic Trade and Investment Partnership

Matt Hancock Excerpts

Thursday 15th January 2015 Commons Chamber

[The Minister for Business and Enterprise (Matthew Hancock)]

It is a pleasure to respond to this crucial debate on TTIP. We must set the debate in the context of Britain’s great trading history, from the wool trade of the middle ages and the spice routes of the 17th century to the Pax Britannica in Victorian times, which saw the Navy deployed to keep the lanes of trade open around the world. As a nation, we are deeply committed to free and fair exchange, and with remarkably few exceptions that was the consensus in today’s debate. With the abolition of the corn laws by a Conservative Prime Minister, we were the first country in the world to open ourselves up to foreign competition. Peel knew that one tackles the cost of living not by fixing markets but by setting them free, and that is a lesson that holds true today.

[Mark Reckless (Rochester and Strood) (UKIP)]

Is—[Interruption.] Is TTIP really about setting markets free, or is it about having a single regulatory system across the Atlantic whereby people will be forbidden from selling things unless they comply with those regulations?

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Before the Minister replies, if the hon. Gentleman has not been in the Chamber for the debate, and I judge by the mood of the House that that might well be the case, he should think carefully before intervening on the Minister and taking up time.

[Matthew Hancock]

TTIP is about fair and free trade and since 1970 the percentage of people worldwide who live on less than $1 a day has fallen by 80% when adjusted for inflation, not because of public works or central planning but because of the dawn of market liberalism in countries that once embraced state control. That point was made by Members on both sides of the House. Indeed, the hon. Member for Swansea West (Geraint Davies), whom I congratulate on obtaining the debate, set out how TTIP can demonstrate trade liberalisation and, alongside the trans-Pacific trade partnership, or TPP, which is proposed between the US and countries around the Pacific, and the EU-Canada deal, can form the basis of a global free trade area with global standards to which others could aspire. I very much agree with him on that point.

[Geraint Davies]

Does the Minister agree that there is a strong case for a trade relationship with Africa, particularly north Africa, given that a lot of the pressure for migration comes from inequality? We should be sharing the fruits of global trade rather than hoarding it for the rich nations.

[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.

[Mark Durkan]

The Minister relies on history in saying that the UK has never lost an ISDS case. With regard to the way in which the ISDS regime will operate under this treaty, whether or not one can be confident that the UK will not lose a case, if a case is lost by another member state, or a firm in another member state, what would be the implications for the UK?

[Matthew Hancock]

If a case is lost in another member state on its domestic regulation, I would not expect that to have any implications for the UK.

As on regulation, so on the NHS, which has been brought up many times. We are quite clear that there is no threat to the NHS from TTIP. Public services and publicly funded health services are not included in any of the EU trade commitments. I will go further and read what the former Trade Commissioner said to the BBC:

“Public services are always exempted—there is no problem about exemption. The argument is abused in your country for political reasons but it has no grounds.”

My hon. Friend the Member for Totnes (Dr Wollaston), the Chair of the Health Committee, gave a very clear enunciation of the exemption of the NHS set out by not only the EU but the US side in these negotiations. I would say this to anybody who continues to campaign against the inclusion of the NHS in TTIP: you have already achieved your aim, and continuing to campaign is continuing actively to mislead, because public services and publicly funded health services are not included in this negotiation.

[Bob Stewart (Beckenham) (Con)]

May I clarify one thing? It is probably not as important as the whole thrust of this debate, but when I was badly hurt in the Army and the NHS took responsibility for helping me get better, we used an American system to put me back on my feet. I hope, and assume, that use of American techniques and systems by the NHS is still allowed.

[Matthew Hancock]

Of course that will be allowed, but the point is that we would still have control over our public health policy. I can give that reassurance, which was sought by the hon. Member for Edinburgh South (Ian Murray) on the Labour Front Bench, so I hope he will now remove that objection. I do not want to conclude that some Opposition Members do not want to be reassured, but increasingly that is the only view I can reasonably come to.

[Ian Murray]

That was not the question I posed to the Minister. The question I asked was: if there is any threat whatsoever to the NHS and the UK’s wider public services, will the Minister and the Government sign a TTIP trade deal?

[Matthew Hancock]

The Health Secretary has already made it clear that if a trade deal threatened the NHS, he would not support it. However, as the former Trade Commissioner has said:

“Public services are always exempted”.

I am glad that we can finally put that issue to bed. I doubt that Labour Front Benchers will raise it again, because they now know that they would be misleading the nation if they did so.

[Geraint Davies]

Would the Minister sign a deal without ISDS? Does he think that ISDS is a necessary part of TTIP?

[Matthew Hancock]

The reason for the inclusion of ISDS is to make sure that people who want to make investments have the confidence do so because they know that recourse is available.

In the couple of minutes remaining, I want to address the issue of scrutiny. As my hon. Friend the Member for Skipton and Ripon (Julian Smith) has said, there has been huge scrutiny and engagement, including four debates in both Houses; four Select Committee inquiries; regular updates to the Chair of the European Scrutiny Committee and the chair of the all-party group on TTIP, the right hon. Member for Wentworth and Dearne (John Healey); regular stakeholder meetings; endless piles of letters that I and the Minister for Trade and Investment have signed; constant consultation with the European Parliament; four online public consultations by the Commission; and we even have a TTIP roadshow.

Let no one be in any doubt: enormous consultation is taking place both inside and outside this House. The commissioners have come to this Palace. Last week, 150 pages of text, eight proposals for legal text and 15 position papers were published. Following the passage of this motion, we will ensure that I and other Ministers continue to engage with this House.

Let us once more assume our historic role as the pioneers of free trade, not only for the sake of the British people, but for the sake of all people around the world for whom liberty and prosperity go hand in hand.