Oral evidence: Transatlantic Trade and Investment Partnership, HC 804-iiiTuesday 20 January 2015
Oral evidence, 20 January 2015.
Witness
Kate Ling, Senior European Policy Manager, NHS European Office, NHS Confederation, gave evidence.
Chair
Good morning, Kate, and thank you for agreeing to contribute to our session this morning. We know who you are, but if you would just like to introduce yourself for voice transcription purposes, that would be helpful.
Kate Ling
My name is Kate Ling, and I am representing the NHS European Office, which is part of the NHS Confederation. It might be helpful if I just explain very briefly what the NHS Confederation is and who we represent.
Chair
If you could do it within one minute, that would be helpful.
Kate Ling
I will do my best. We are an umbrella organisation that speaks on behalf of the NHS. We are a membership organisation consisting of NHS trusts and NHS bodies generally. We are not an agency of the Department of Health or an arm’s length body, so we are not part of UK Government. We feel, therefore, that we are in a very good position to represent, in an unbiased way, the views and the interests of the NHS. The reason we have an office in Brussels—the NHS European Office—is to protect and promote the interests of the NHS, particularly in relation to the European institutions.
Mr Binley
Might I declare an interest, because Binley’s Directories had a relationship with the Confederation that you may know of, and I think it is right and proper to declare that interest.
Chair
You partly anticipated the question. I was going to ask you what engagement you had with the European Commission and the UK Government and business in relation to TTIP and its impact on the NHS.
Kate Ling
We have a lot of dealings with UK Government. We have, obviously, spoken to people in BIS, the Department of Health and the MHRA about the implications of TTIP for the health service. We also relate very much to the European Commission, and we have had meetings with DG Trade to talk about the agreement. We also talk to and relate to a lot of other organisations. So, for example, we are members of an organisation called CEEP, which represents public services employers generally across Europe, and another organisation called HOSPEEM that represents healthcare employers specifically across Europe. I have also spoken to and had discussions, mostly informal, with organisations such as the European Public Health Alliance and the European Policy Centre. Obviously, I have read, researched and looked at a lot of the information that has been produced by various civil society organisations. Obviously, this is a massively contentious issue that has attracted a great deal of interest. I think it is fair to say that we have cast our net very widely and taken a very wide range of views and opinions in trying to reach a view as to the likely implications for the National Health Service.
Chair
The TTIP negotiations and the publicity surrounding them have focused on the potential dangers to the NHS. Do you see any benefits to the NHS from TTIP?
Kate Ling
Yes. I imagine you will have seen the brief that we produced, which was referred to by the last witnesses. We have not said that we want every aspect of healthcare to be excluded from TTIP, because we can see there could be some benefits. For example, in the areas of pharmaceuticals and medical devices that people were referring to earlier, there are obviously benefits to British companies and businesses. Britain is a world leader when it comes to life sciences and various medical technologies, so clearly there are economic benefits, but we think there could also be benefits for patients, because that is what we are mainly interested in. For example, if there is more regulatory convergence, or there is no need for the duplication of inspections of manufacturing premises for pharmaceuticals on either side of the Atlantic, it is possible that patients could have quicker and easier access to drugs. There is also the possibility that standards could be raised with regard, for example, to medical devices. That is why we have not called for a blanket exclusion for all aspects of healthcare from TTIP. We do think there are some benefits.
Rebecca Harris
A previous witness to the Committee argued the effects of TTIP would be “goodbye NHS, hello permanent privatisation”, and “Imagine a world where the profits of healthcare companies decide how we help the sick and the elderly”. Is this your view of the impact of TTIP on the NHS?
Kate Ling
We are cautious in our analysis, as I think you will have gathered from the document that we have submitted. I do not think you can be complacent. We cannot say that there are absolutely no dangers to the NHS as a result of the trade agreement. As previous witnesses have said, it really does depend on the detail of what is in the agreement. All of these discussions are speculative, because we are talking about something the text of which we have not seen, so it really depends on the final wording of what is agreed. Now, as you know, there have been a lot of reassurances from the European Commission and from the UK Government as to the negotiators’ intentions—and the Government’s intentions, for that matter—as to what is in the negotiating mandate and what they want to see in the final agreement. I think we would say that if those commitments translate into the final wording of the agreement, we are reasonably confident that publicly funded health services should be protected under a TTIP agreement. However, it is worth saying that, obviously, this is a negotiation, and in any negotiation there is give and take. You cannot guarantee that the intentions of the parties as set out in the negotiating mandate translate into the final text of the agreement, which was why I said I do not think we can be complacent and assume that everything is okay until it is a done deal. There is the issue of how robust the negotiating mandate is. There is also the issue of exactly what kinds of services will be protected and reserved for member states to regulate, and again that is very much a matter of detail: the exact wording of the agreement and basically what will be listed in Annex 2 under the negative approach. So, for example, I think there are some grey areas. It is reasonably clear that services that are publicly funded would be protected under that kind of wording, but what about, for example, services that may be currently provided privately if a future Government wanted to provide them publicly? There are those sorts of grey areas where we are not quite sure what would happen. The third area is to do with the investor-state dispute settlement procedures. I have just been listening to the last discussion, obviously, about policy freeze, and whether that would affect the intentions of Governments.
Rebecca Harris
Would you say, broadly speaking, there is no risk here that we are going to be forced into permanent privatisation or that profits will decide healthcare? Would you say that is an exaggeration?
Kate Ling
It is certainly not the intention of the negotiators for that to happen. That is quite clear. It is also fair to say that competition has been an element in the National Health Service in England for quite some time now. It has been the policy of successive Governments to open NHS services to competition, and I do not think there is anything in the TTIP agreement that will enforce further privatisation, provided they stick to the negotiating mandate.
Rebecca Harris
The European Commission recently wrote to the Chair of the Health Committee, seeking to reassure her about the impact of TTIP on the NHS. Does that response go further than the John Healey correspondence, and if so, does it leave open any other concerns for you?
Kate Ling
It is a reassuring letter. I would repeat what I have just said. It does go further than the John Healey letter. I think it makes it quite clear that, as I said, publicly funded health services should be reserved, so that is helpful and reassuring. I think, also, the Commission’s recent efforts at greater transparency with regard to negotiations are helpful, though they could perhaps still go a bit further, and their recent response to the public consultation on ISDS. There is an awful lot to play for there, and it is still, obviously, very unclear whether or not ISDS will form part of the final TTIP agreement, and if it does, what sort of ISDS provisions they will be. The clear implication of the Commission’s latest document is that if there are ISDS provisions, they will, hopefully, be very different ISDS provisions from the ones that have been seen in previous trade agreements.
Paul Blomfield
Continuing the theme and following the earlier discussion we had on ISDS, you will know that there are similar provisions in other agreements. Are you aware of any similar clauses that have impacted on the NHS or any other public services in the UK?
Kate Ling
No, I am not aware of them. Obviously, I am not an expert on trade agreements; I am an expert on the National Health Service, so I have been looking at this specifically from the point of view of the impact of TTIP on the NHS.
Paul Blomfield
I just wondered if, in the course of doing that, you had looked at the ISDS provisions in other agreements in relation to the NHS.
Kate Ling
Not specifically, no, although obviously I have looked at, and various previous witnesses have referred to, ISDS cases that have involved other countries, and in some cases have involved healthcare, but no, I have not specifically.
Ann McKechin
You have mentioned European Union countries wanting to change their public policy and how they would be affected by TTIP. We are aware that there are major private American health firms that are clearly eyeing the European market for possible expansion. One area is social care and nursing homes. The others are, obviously, in terms of pharmaceuticals and drugs, and provision of clinical services. If I were to give you an example, the NHS across the United Kingdom completely dominates the health service. The qualification of which drugs are used within the NHS is obviously a key factor for any pharmaceutical company. So, we have NICE here, which applies for England. Scotland has its own drug advisory board for NHS Scotland. If you had a situation where, for example, the Scottish group decided to authorise the use of one particular drug but down here in England NICE decided not to, given the amounts of money we are talking about and the scale of the advantage, can you not see a situation occurring where a large American corporation may decide to just test the process and see if it can force the issue without necessarily getting to the point of going to an arbitration, by taking a challenge and seeing whether Governments will move, or bodies that decide drugs usage will actually be affected by it?
Kate Ling
I do not quite understand the question, if it is a question about ISDS.
Ann McKechin
Corporations may start to throw their weight around and say, “Well, we are going to start to challenge this.” Will that have a freezing effect on what people will or will not do?
Kate Ling
The ISDS is an investor-state dispute settlement procedure, so you have to have some interests that you think are being damaged in order to take a case. But if it is simply that you want to get into that area, I do not really see how ISDS could apply. I can see the argument about the regulatory freeze—about Governments thinking twice about whether or not to institute such-and-such a policy, because of the possibility of challenges from companies—but I cannot really see how that would work in the instance that you are giving.
Ann McKechin
What about social care then, currently much of which is in the private sector?
Kate Ling
I cannot really talk about social care, because it is not part of the NHS.
Ann McKechin
Or clinical services—yes.
Kate Ling
Yes. It is not part of my remit, but clearly that is a completely different ballgame. The whole point about the NHS is that we are reasonably confident, as I said, subject to all these caveats about the exact wording in the final agreement, the NHS would come under the definition of publicly funded services for the purposes of TTIP. Now, that might not be the case, for example, with regard to social care. As you say, a lot of, for example, nursing and residential care homes are already provided privately, but I really could not stray into that area, because I would be going beyond my competence to talk about that.
Mike Crockart
There is a lot of debate around TTIP about the concepts of right to invest versus right to regulate, and some business organisations have argued that the right to invest should take precedence over the right to regulate. What is your view on what effect that would have, potentially, on the NHS? More generally, can the two co-exist?
Kate Ling
Obviously, I was listening with interest to the last discussion. I think our view is pretty clear, which is that we would always want to support the right of Governments to regulate, particularly in a field as important as healthcare. Obviously, in certain ways healthcare is a commodity, but it is a public good and a public service, and it is not a commercial thing. It is not purely a business. The NHS exists to provide services to patients; it does not exist to make a profit. Obviously, from our point of view, we would always say that was the priority. We are not saying that it is not important that British business should flourish and should provide jobs, and there are important economic benefits from medical technology and the healthcare sector, but that is not our priority.
Mike Crockart
In the realm of the NHS particularly, but public services more generally, the right to regulate, in your opinion, is more important than the right to invest.
Kate Ling
Absolutely.
Mike Crockart
That is a straightforward answer. I will leave it there, thank you.
Mr Binley
The EU’s negotiating positions are, on the whole, confidential. To what extent has this undermined public confidence in the trade negotiations?
Kate Ling
I think, unfortunately, it has undermined them quite a lot. The view of the NHS European Office is that we welcome maximum transparency, consistent with getting the best deal for the NHS. The problem with this is that, of course, it is a negotiation and that you cannot have absolutely everything out in the open. You have to keep something up your sleeve. Having said that, I think the new Commission has made a good start by showing that they are prepared to be more open. They have, as you know, released documents that were previously confidential. They have committed to greater transparency in future, and Commissioner Malmström has shown a willingness in this respect.
Chair
Before we move on, the criticism has been levelled at the European Commission, but it is the member states that signed up to this particular process, and the European Commission is essentially bound by the decision of the member state. Have you any view on whether our Government should be lobbying on this to promote a more transparent process?
Kate Ling
As I said, greater transparency would be a good thing. The Commission has made moves. I think they could probably do a bit more. You could argue about the extent to which details, for example, of the offers from both sides or of the text that is reached at the end of each negotiating round should be made public. I think it would do no harm at all for the British Government to lobby for greater transparency, but as I said, I am not representing the Government.
Chair
No, I do understand that, but in terms of the Committee’s relationship with the Government, it is useful to have your view on it. I do know—and I am the most unlikely ally of Sir William Cash—that he has, from the European Scrutiny Committee, complained about the unwillingness of Government to actually allow the European Scrutiny Committee to carry out what he, I think legitimately, considers its role in scrutinising this. That explains the thrust of my question. I do not know if there is anything you want to add to your previous answer. I come back to Brian.
Mr Binley
A surprised Brian, Mr Chairman. Can I ask, secondly, how easy is it for you to accurately assess the impacts of TTIP on public services without having more information, and without seeing, for instance, a draft text? How easy is it for you to do your job?
Kate Ling
It is more common, for example, in my job for me to be dealing with European legislation, where at least you have the advantage of having the text in front of you. You can see the Commission’s draft proposal; you see the amendments that are put by MEPs; you follow it through the various stages, not all of which are absolutely public, but it is certainly easier when you are following legislation. Obviously, one of the main points that we made in our briefing was that it is pretty hard to be specific and give hard and fast answers for a text that you have not seen. We are having to go on two or three things. We are going on obviously what we have seen—the documents that have been released, officially or unofficially. We look at previous agreements and what we think the impact of those may be. As I said, we talk to a lot of people; we do a lot of research and we try to estimate what we think the impact will be on public services based on what we know.
Mr Binley
But your input could be positive and helpful, couldn’t it? It seems to me that they are denying that opportunity to help themselves. Am I being overgenerous to you?
Kate Ling
It seems to you that who is denying themselves the opportunity?
Mr Binley
The negotiators, the EU, and those people involved in the negotiations. You are working in the dark, aren’t you, on many issues?
Kate Ling
Not totally in the dark, no.
Mr Binley
I understand that. You have the ability to use a sensible construct from the information you do have, but you could have much more information that seems to me to be useful to the very people that you are dealing with in this respect.
Kate Ling
Yes. It is for the member state Governments to discuss with the Commission and to agree on their negotiating mandate, obviously, and ultimately it is for them to decide how far they are prepared to go with transparency.
Mr Binley
Yes, I understand that, but we are in a position to say, “For God’s sake, be a bit more open,” and I would have thought that would have been helpful.
Kate Ling
Yes. I can give a straight answer to that. Yes.
Mr Binley
Good. I have the answer I wanted. Thank you.
Kate Ling
Obviously, the more information we have, the better able we are to make an assessment of the impact. Yes, that seems clear.
Mr Bain
The Commission has now said it is going to consult member states on ISDS. What do you think the UK Government need to say in public as part of that consultation to address existing concerns that people across the country and before this Committee have expressed to us?
Kate Ling
I obviously have to be careful because, as I said, I am not part of the UK Government and I cannot tell them what to say. It is quite clear from the Commission’s response to the consultation on ISDS that they have identified certain areas where there could be significant improvements. If they are serious about wanting ISDS to be part of the TTIP deal, I guess that they will need to try to make those improvements. Certainly, I would have thought that the UK Government would want to support the protection of the right of member states to regulate on, for example, issues like public health or the environment. That is something that came out very clearly from the ISDS consultation, and goes back to your question about the primacy of regulation over investment. But there are also other issues that were identified. There was the whole issue about the establishment and the functioning of the tribunals: how they are composed; who gets to sit on them; and how open their deliberations are—all of those procedural issues. There was the issue about the relationship between the domestic courts and ISDS: should you have to exhaust one set of procedures before you can try the other, etc? There was the issue of appeals: should the ISDS decision be final? Should there be an appeal mechanism? As I say, I cannot speak on behalf of the Government, but I would have thought that it would be reasonable to press for those sorts of improvements to any ISDS provisions that are going to be included—if they are included—in the final TTIP agreement.
Mr Bain
The Commission is saying that there is nothing in EU law at the moment that prevents member states from running their own health services in the way they want. I think the concern that some people have is that some of the things they heard early on in the TTIP negotiations could go against that right. Do you think, in terms of what the Government are saying on ISDS, it has to be much clearer that, whatever is agreed, it is not going to prevent the NHS being run in accordance with the way that the British people want?
Kate Ling
Yes, absolutely. It is for the member states to push the EU negotiators about what they want to be reserved in the TTIP agreement, and it is very important that that wording is as watertight as possible. That is one of the key points in our briefing: that in order to see the maximum safeguards to the NHS—I cannot speak for other public services—it needs to be very clear that NHS clinical services are included in that reservation.
Chair
That concludes our questions. Thank you very much, Kate. We will be reporting in due course and your comments will be an important part of the evidence base that will inform our decisions. Thank you very much indeed.
Kate Ling
Thank you very much. Oral evidence: Transatlantic Trade and Investment Partnership, HC 804-iii 29