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International trade agreements: public health services

Trade Bill – in a Public Bill Committee at 4:15 pm on 25th June 2020.

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“(1) A Minister of the Crown may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 if any provision of the agreement—

(a) would have the effect of, or could reasonably be expected to have the effect of, altering the way in which a service is provided by a specified body,

(b) would open part or all of a specified body to market access but without any accompanying provision for the UK Government to reduce the level of market access in future,

(c) would have the effect of, or could reasonably be expected to have the effect of, opening any part of a specified body to foreign investment,

(d) does not specify sectors or subsectors of a specified body to which the agreement would enable market access,

(e) includes investor-state dispute settlement mechanisms in relation to a specified body, or

(f) includes changes to mechanisms for the pricing of medical or pharmaceutical products for purchase by a specified body.

(2) The specified bodies, for the purpose of subsection (1), are—

(a) NHS England,

(b) NHS Wales,

(c) a health board in Scotland, a special health board in Scotland or the Common Services Agency established by section 10 of the National Health Service (Scotland) Act 1978, and

(d) HSCNI.

(3) In subsection (1), ‘international trade agreement’ has the meaning given in section 2 of this Act.”—

This new clause would ensure that HMG has a duty to restrict market access to healthcare services, including medicines and medical devices.

Brought up, and read the First time.

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

I beg to move, That the clause be read a Second time.

Photo of Graham Brady Graham Brady Chair, Conservative Party 1922 Committee

With this it will be convenient to discuss new clause 13—International trade agreements: consent for provision of healthcare services—

“(1) A Minister of the Crown may not, under section 20(1) of the Constitutional Reform and Governance Act 2010, lay before Parliament a copy of an international trade agreement which makes provision for the supply or provision of healthcare services (including medicines and medical devices) unless each of the devolved authorities has given their consent to that agreement.

(2) ‘Devolved authority’ shall have the meaning given in section 4 of this Act.”

This new clause would ensure that HMG is not able to lay before Parliament a trade agreement which could have an impact on provision of healthcare services without the consent of the devolved administrations.

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

New clause 12 would ensure that the UK Government had a duty to restrict market access to healthcare services, including medicines and medical devices. We tabled the new clause precisely because trade deals have the potential to negatively impact health services. Although the UK Government have repeatedly pledged that the NHS is not on the table in trade negotiations, leaked documents detailing conversations between UK and US negotiators reveal that health services have been discussed, including the US “probing” on the UK’s health insurance system—whatever that means—and that the US has made clear its desire for the UK to change its drugs pricing mechanism.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

Is this not a similar situation to that in the previous debate on food standards? The Government could easily make a commitment to rule out these things—to do the right thing and show the public that the NHS and medicines are not at risk. They could reassure people by putting that in the Bill and ensuring it does not happen. Otherwise, they are just saying to the public, “This may well be part of the plan.”

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

My hon. Friend is absolutely right. As in the previous debate, the Minister has said that there will be no compromise on standards. I do not doubt for one second his sincerity, but let us just put it in the Bill so that everyone is absolutely satisfied. In that sense, my hon. Friend is absolutely right—let us rule it out in legislation.

Photo of Andrew Griffith Andrew Griffith Conservative, Arundel and South Downs

I would love the hon. Gentleman to expand on his theory of harm in respect of health services. If ever there was an example of the global effect of the law of comparative advantage, it is the advances in modern healthcare. There is a remedy available to him should he wish to remove himself from the benefits of diagnostics from Düsseldorf, biogenomics from Boston or pharmaceutical projects from Dublin. There is a mechanism known as a living will, whereby he can instruct his heirs and his family to ensure that he is at no point treated by any of those marvels of modern healthcare and that he can go back to experiencing the benefits of herbal potions and remedies and all those other forms of modern medicine that he would seem to prefer by cutting himself off from the benefits of free trade with the world.

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

I have benefited from the national health service; indeed, it has probably saved my life on a number of occasions.

I have no doubt that some of the drugs purchased are still under patent by private companies. Some of the diagnostic testing machinery was made in Germany. Nobody, but nobody, is talking about restricting any of our health services in terms of purchasing. We are talking about marketisation, which has failed when it comes to the health service.

The new clause has a specific carve-out for the NHS and all health-relevant services regulation, making it illegal for the Government to conclude a trade agreement that altered the way NHS services are provided, liberalised further or opened up to foreign investment by dint of a trade agreement—not by a policy change, not by part of the NHS somewhere on these islands saying it would be a good thing to do, but by dint of a trade agreement being forced on us from somewhere else.

On negative listing, these clauses—we know this from other examples—require all industries to be liberalised in trade agreements unless there are specific carve-outs. The reason this is an issue is that it is not always easy to define what services count as health services and what are more general. For example, digital services may seem irrelevant to health, but NHS data management and GP appointments are increasingly digital. Negative lists therefore make it harder for Governments to regulate and provide health services for the common good. No-standstill clauses are ratchet clauses, because these provisions mean that after the trade deal has been signed parties are not allowed to reduce the level of liberalisation beyond what it was at the point of signature. That can make it difficult to reverse NHS privatisation.

Let me give an example of where had a standstill or ratchet clause been in effect, it would have caused real harm. In Scotland, cleaning in hospitals was historically carried out by private contractors, and the rate of hospital-acquired infections rose dramatically. The SNP Government took the decision to return it to NHS cleaners, and the rate of those infections fell dramatically. Imagine if an investor-state dispute settlement had been in place, if a ratchet clause had been in place—we would have been unable to do that, and if people had died from hospital-acquired infections because the Government were not allowed to take the public health measure of returning cleaning to the public sector, it would have been an absolute scandal.

I mentioned ISDS. There should be no ISDS clauses in trade agreements which only allow private investors to challenge Government policy when, for example, it affects their profits. Failure to abide by those clauses can result in legal challenge from trade partners or, if there is a separate ISDS clause, a challenge from private investors. I have used a number of examples on a number of occasions, and I will use another today very briefly. It is from April 1997. The Canadian Parliament banned the import and transportation of the petrol additive MMT because of concerns that it posed a significant public health risk. The Ethyl Corporation, the additives manufacturer, sued the Canadian Government under chapter 11 of the North American free trade agreement, an ISDS-type arrangement, for $251 million to cover losses of what it called the expropriation of both its production plant and its good reputation. That was upheld by the Canadian dispute settlement panel, and the Canadian Government repealed the ban and paid that corporation $15 million in compensation. That was over a petrol additive that was deemed to have a negative impact on public health. We believe it is quite wrong for large corporations to use these ISDS-type arrangements to sue Governments simply for taking steps to protect the wellbeing of citizens or for simply enacting public health measures which they believe to be right and for which they may well have an electoral mandate.

The new clause also instructs that there should be no changes to drugs pricing mechanisms. We know that the US, for example, has stated that it wishes to challenge the drug pricing model which keeps prices low for ordinary people in the UK. This could also happen through intellectual property and non-patent exclusivities. We need to be very alive to that. It would be bad news for patients, taxpayers, health boards and trusts around the country. In our judgment, trade agreements should never be used to facilitate that.

Our new clause 13 is an adjunct; we simply sought to add a different degree of protection for the health services in the nations, and to ensure that the Government would not be able to lay before Parliament a trade agreement that would have an impact on the provision of healthcare services without the consent of the devolved Administrations. That is secondary to the substantial points we are trying to make and the protections that we wish to put in place with new clause 12.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (International Trade)

Given the extra protections that new clause 12 would lock into law to keep the NHS safe from future trade agreements’ effectively pushing higher pharmaceutical prices or further marketisation of the NHS, we will happily support the new clause tabled by the hon. Member for Dundee East. Indeed, his new clause supplements the protections that amendment 12, had it been agreed to earlier in our proceedings, would have put in place to protect our public services more generally.

We, too, are aware of the leaked documents that the hon. Gentleman referred to, revealing that discussions have already taken place in the UK-US trade talks about possible measures that the American pharmaceutical industry might want, clearly supported by Donald Trump’s chief negotiator, that would effectively push prices up. Given that we have substantially lower pharmaceutical drug costs than the US, the fact that the Americans are continuing to push such measures is profoundly worrying.

Ministers have said that the NHS is not on the table in the UK-US talks and, like the hon. Gentleman, I take that at face value, but it is worth saying that until the text of a trade agreement is published, we will have no way of knowing for sure what is in it. The precedent of the EU-Canada deal does not give reassurance in that respect, as it used the negative list approach to services liberalisation, to which he referred. The Minister will remember the considerable concern that Germany had chosen to add in carve-outs for the whole of its national health service, whereas the UK had not taken such a comprehensive approach.

The NHS Confederation and The BMJ have both published a series of concerns, setting out the ways the NHS could be undermined by a UK-US trade deal. One concern that is highlighted, which again the hon. Member for Dundee East referenced, was the use of ISDS—investor-state dispute settlement—provisions. Again, investor-state dispute settlement provisions were included in the EU-Canada deal, which Ministers count as a roll-over deal.

It would be helpful if the Minister would embrace the spirit of these new clauses, support new clause 12 being added the Bill and, in his wind-up remarks, confirm that he will not push a negative listing approach in a UK-Canada specific deal and that there will not be ISDS provisions in such a deal.

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

I start by thanking Opposition Members for tabling new clauses 12 and 13, which provide me another opportunity to stress the Government’s position on the NHS and our trade agenda. The Government have been clear and definitive: the NHS is not, and never will be, for sale to the private sector, whether overseas or domestic. No trade agreement has ever affected our ability to keep public services public, nor do they require us to open up the NHS to private providers.

We have always protected our right to choose how we would deliver public services in trade agreements, and we will continue to do so. The UK’s public services, including the NHS, are protected by specific exclusions, exceptions and reservations in the trade agreements to which the UK is a party. The UK will continue to ensure that the same rigorous protections are included in future trade agreements.

As stated in our published negotiating objectives with the US, to which I referred the hon. Member for Warwick and Leamington, the NHS will not be on the table. The price the NHS pays for drugs will not be on the table. The services the NHS provides will not be on the table.

Those commitments are clear and absolute, but new clause 12 is unnecessary, however laudable the intention behind it is. It overlooks the fact that there are already rigorous checks and balances on the Government’s power to negotiate and ratify new agreements. In particular, and as we discussed on Tuesday, the UK already has scrutiny mechanisms via the Constitutional Reform and Governance Act 2010 procedure that will ensure Parliament can see exactly what we have negotiated, and if it does not agree it can prevent us from ratifying the deal.

Furthermore, and most importantly, no trade agreement can of itself make changes to our domestic law. Any legislative changes required as a result of trade agreements, including—if not in particular—in relation to the NHS, would be subject to the separate scrutiny and approval of Parliament in the usual ways.

Turning to new clause 13, as the hon. Member for Dundee East will be aware, the negotiation of international trade agreements is a reserved matter under the devolution settlements. It is for the UK Government to negotiate the agreements and for the UK Parliament to scrutinise them, in accordance with the Constitutional Reform and Governance Act 2010, prior to ratification. Therefore, it would be constitutionally inappropriate to give the devolved Administrations a veto over such agreements before they were laid in Parliament.

However, that is not the issue here. What is more important is the fact that our commitment that the NHS will not be on the table applies to the NHS in all parts of the UK, including in the devolved nations. So, I hope that I have provided the hon. Members with some reassurance that the new clauses are therefore unnecessary.

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade) 4:30 pm, 25th June 2020

When the Minister described the end of the Constitutional Reform and Governance Act 2010 process, it is a take-it or leave-it option, with no ability for Members to make amendments whatever. I do not think that is satisfactory, to be brutally honest.

As I have said before, I do not question the sincerity of this Minister. When he says that the NHS is not for sale, that no trade agreement has ever affected how the UK deals with its public sector, that the NHS is protected by carve-outs, and that drug pricing and other things are not on the table, I think he is being sincere. But if we put in place a mechanism whereby those protections are not in the Bill, it does not take a huge leap of imagination to imagine some Trump-supporting figure coming up through the ranks of the Tory party and sitting in a chair just like the Minister’s, and making rather different decisions.

So, on that basis, I am afraid that I have to press for a Division on new clause 12.

Question put that the clause be read a Second time.

Division number 17 Trade Bill — International trade agreements: public health services

Aye: 7 MPs

No: 10 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 7, Noes 10.

Question accordingly negatived.