NHS and Future Trade Deals

Stewart Hosie Excerpts

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.