To avoid potential misunderstandings I am clear that anything that US Corporations might agree to must be opposed. And healthcare and markets can never sensibly be reconciled. Anyway.

The Transatlantic Trade and Investment Partnership (TTIP) is a proposed free trade agreement between the European Union and the United States. Proponents say the agreement would result in multilateral economic growth while critics say it would increase corporate power and make it more difficult for governments to regulate markets for public benefit.

Negotiations about TTIP have been taking place for some time but many claim these are far from open and transparent.  The UK Government has been very reticent about any part it has played so far and at present there is no one of Cabinet rank responsible for negotiations.  Many lobbyists and the Labour Party are arguing that the UK should ensure the NHS is outside the scope of TTIP.

Two major risks are inherent.  The first is that negotiations to facilitate better trade will lead to a levelling down of regulations.  The fear is that the US will push for weaker regulation of things their corporations find problematic; such as labour rights, animal welfare and environmental protection.  The harmonisation of regulation can be a bad thing, although in respect of the EU it has often been a good thing.

The second risk is the one that is getting far more attention and that is around access of private companies to our public sector.  In particular, attention has been focused on our NHS and the fear that TTIP might prevent a future Labour administration from either limiting or rolling back the privatisation that has been accelerating since the election of the Coalition in 2010.

Joining the EU meant that when our public bodies decided to offer contracts then these had to be offered in an open and transparent non discriminatory manner across the EU.  Nothing said our public bodies had to use procurement and contracts for any services but if they did then rules had to be followed.  The EU has always recognised that clinical services could be outside the market.  Under the EU procurement Directives (brought into our law by the Public Contracts Regulations 2006) it was made clear that certain services (such as clinical services) were not required to be competitively tendered and if they were then a softer process could be engaged (they were Part B services).

Additionally, case law has established that public bodies did not need to competitively tender services if they were provided for them by a body they controlled or which was actually part of the same overall public body (known as Teckal principle).

So if a commissioner of NHS services simply continued with its current arrangements where services were provided by an NHS Trust, then neither procurement nor competition law had any relevance.  Sadly this was confused by the introduction of “autonomous” Foundation Trusts, which started to look a bit like businesses. But the lack of any tendering of services provided by these FTs was never challenged, although possibly it could have been.

Just to demonstrate that the EU is not the problem, there is to be a new EU Procurement Directive operative from 2016 which specifically allows greater scope to exclude healthcare, social care and education from the mainstream procurement requirements.

Anyway none of this is now relevant to healthcare in the UK as the Coalition passed the Health & Social Care Act 2012 and brought in Regulations under Section 75 which made it compulsory for ALL NHS services to be put out to compulsory competitive tendering, unless there was a very clear reason not to.  Despite repeated lies about this to try and damage Labour, the H&SC Act reversed the established position, which was that services should be put out to competitive tender ONLY if there was a good reason to do so – competition was used tactically when necessary, not strategically by default.

So the first point to make is that the fear of our NHS being opened up to competition which lets in the private sector has already happened.  The greatest risk to our NHS is that a majority Tory government will finish the job it has started.

However, if Labour is elected in 2015 on a policy platform to roll back the private sector involvement in the NHS then there is nothing in EU Law or in the EU Directives which would prevent that being carried out. Policies can also be constructed to allow organisational changes within the NHS to be outside the scope of competition law (again something that has been explicitly introduced by the H&SC Act).  Work already done establishes that a new set of policies and the repeal of parts of the H&SC Act could allow the NHS to be insulated from any enforced requirement to competitively tender clinical services. Labour could have a policy which is based on keeping publicly provided services within the NHS; often (wrongly) described as a preferred provider policy.  The EU is not the problem.

However, if Labour wanted to adopt a more radical policy towards rolling back private provision by terminating contracts that were ongoing, then there would be penalties to pay under our own domestic law.

So to TTIP.

On the face of it TTIP does not change EU Law as such.  So the special non market nature of healthcare provision would continue to be recognised.  So here should be our demand to any government – you cannot sign up to anything which weakens the special position enjoyed by clinical services and indeed by social care and education.  Labour does not accept our health is a commodity or that healthcare provision should, or even could, be best organised through a market.  We should note that the most expensive and least effective healthcare system is that of the US, which is fully marketised.

Finally we get to the problem.

What is being discussed under the TTIP flag is not just a trade agreement, it may also include something that is very worrying indeed known as ISDS – (not the International Sheep Dog Society).  Here goes:-

Investor-State Dispute Settlement (ISDS) is an instrument of public international law.  It grants a foreign investor the right to initiate dispute settlement proceedings against a foreign government (the “Host State”). Provisions foreseeing ISDS are contained in a great number of bilateral investment treaties, in certain international trade treaties, such as the North American Free Trade Agreement‘s Chapter 11 and in international investment agreements, such as the Energy Charter Treaty. If a foreign investor from country “A” (“Home State”) invests in country “B” (“Host State”), both of which have agreed to ISDS, and the Host State violates the rights granted to the investor under public international law, then that investor may bring the matter before an arbitral tribunal. While ISDS is often associated with arbitration under the rules of ICSID (the International Centre for Settlement of Investment Disputes of the World Bank) ISDS in fact often takes place under the auspices of international arbitral tribunals governed by different rules and/or institutions, such as the London Court of International Arbitration, the International Chamber of Commerce, the Hong Kong International Arbitration Centre or the UNCITRAL.*

* (Thanks to Wikipedia.)

So in short the whole purpose of ISDS arrangements is to protect corporations from governments who might do something which risks future profits.  It sets some unelected body above national legal systems and governments.

So if TTIP includes some form of ISDS then in future a Labour government could be dragged before some arbitration body, even if all it did was to implement a policy it had just been elected to introduce.  So Labour cannot roll back privatisation in the NHS for fear of paying penalties to corporations. (Although as mentioned above aggrieved private providers would have rights under our domestic laws).

If you think it is far-fetched that corporations might do this, then you can look at countries where they already have ISDS arrangements – and even without TTIP/ISDS tobacco companies are saying they will sue the government if it introduces plain paper cigarette packaging.

So our second demand should be no ISDS.  The UK is not some rogue state: it has a fully functioning, well developed legal system and corporations are welcome to use it – we do not need some arbitrating international pro-corporation quango which outranks our own Courts.

If we are to have a trade agreements, then we have three conditions:-

  • No downward harmonisation of regulations
  • Existing position of healthcare, social care and education continues as now under EU Procurement Directives
  • No ISDS (or only a very different type of ISDS which fully recognises our domestic legal system)

It is possible we won’t get TTIP at all if the US or member states cannot agree a way forward.  Still as of now TTIP does pose serious risks, but the most serious risk to our NHS (and indeed other public sector services) is a re-election of a Tory government in 2015.

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3 Comments

  1. George Nieman says:

    Having worked for a Medical company in the USA I am convinced that we should avoid allowing them into the NHS in any shape or form

  2. The only safe way to regard TTIP legislation is to reject it,

    The idea it will benefit this country is to believe that corporations are philanthropic institutes who’s prime concern is the promotion of employment prospects.

    Nothing of course could be further from the truth.

    The mistake many in the Labour movement make is to believe that New Labour’s preferred provider is any different from Lansley’s legislation. They are in fact one and the same, that is the internal market will still have the tendering structures and administration that the external market has now.

    It should be clear to any thinking person that the NHS does not and never has needed private sector intervention, it has always been ranked top in the world for efficiency, cost and is the most comprehensive service in the world. Why would any sane person go to the bottom of the league to run a service which is already the finest and at the top/

    The answer of course is political corruption.

    The other point is the matter of affordability, people have been told now ever since the seventies that we can’t afford our public services, and the political will has been to transfer those services into the private sector; with the consequence of abject failure and some cases the absurd situation where French and German nationalised industries have bought out those private companies, and are now running them for us.

    The obvious truth is that without exception the public sector provides the cheapest most efficient service and the evidence is now there to prove it, but corrupt politicians are hell bent on driving the Neo-Liberal agenda on.

    Look at the revolving door of politicians and private companies to see how this is happening, Tony Blair for example and J.P.Morgan just one of many.

    We can afford our public services, we have the money, how did we rebuild this country after the war and nationalise all those industries, whilst at the same time create the NHS that is being dismantled before your eyes.

    Is it any wonder that the Scots want to leave the UK and start again, whilst vowing to protect their NHS.

    We have been sold down the river to corporate interests, and only ordinary people can take that back.

    If we want a future we reject TTIP whole and reject the politicians that tell us otherwise, even if it does come in, we need to make it clear to the legislators that we will repeal every segment of of it and reclaim our sovereignty.

  3. John says:

    I do not understand that to break existing contracts would be break domestic law – this may be news to you but Governments are elected to change the law If not what is the point of being elected.Your statement is another example of the defeatism, the wierd servility to the legal establishment. A Labour government can and must change the law- contracts are broken all the time !

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