One of the more puzzling pieces of fear, uncertainty and doubt being spread around about the Trans-Atlantic Trade and Investment Partnership is that it somehow puts the National Health Service in the UK under threat. This simply isn't true: there's not a scrap, smidgeon or tad of truth to the allegation. What's puzzling is therefore the manner in which people keep repeating that there is some threat or problem here. There's nothing at all in the TTIP which says that health services must be delivered by the private sector, that governments cannot nationalise things currently being done in the private sector, that private sector companies must have access to government money or health care assets nor, in fact, anything like this at all. The only thing that the TTIP does say is that if a private sector company follows current law and sets up to do something and then government changes that law then that company has a right to seek compensation for their losses. And given that that's exactly what the situation is in current domestic law anyway it's terribly difficult to see why people are getting concerned. The government can indeed nationalise anything it wishes to: but it must pay a fair price for doing so. It can use compulsory purchase to buy your house from you for example: but it must pay you for doing so. It's just no different at all.
But as I say, people keep making the allegation:
TTIP sets to make trade easier, which sounds great, but in doing so removes some regulations that divide the US and the EU. This brings with it a number of troubling issues.
Firstly, fears are being raised over the legality of state run services under TTIP (such as the NHS) which could break competition laws (and result in the privatisation of our health service)...
There is no doubt at all about the legality of state run services. Government can organise the NHS as it likes. It is not possible to anyone to sue under TTIP or any other law or treaty to make sure that the NHS is privatised.
One source of concern is a provision for settling rows between companies and countries -- so-called investor state dispute settlement (ISDS).
The European Union says it would allow a company to sue a state for compensation if, for example, a new law discriminates against foreign firms.
But an alliance of opponents, Stop TTIP, argues that it would let investors sue for any action that damages their profit expectations. "ISDS can be used to undermine environmental standards, to prevent regulation or to pocket taxpayers’ money," says Stop TTIP spokesman Karl Baer.
None of those things are true. All the ISDS does is say that those companies and investors have access to a neutral (ie, one not run by the government they're complaining about) legal system to make complaints about whether the government has broken their own contracts or laws. And yes, this is important. We could look at Yukos and Russia perhaps and see what happens when the local courts are perhaps less than wholly and entirely squeaky clean in the opinion of some observers. Or we could look at Greece and the Great Bond Haircut. Greece was essentially bust. So the Greek government and Parliament decided to change, retrospectively, the law under which they had sold bonds to investors. They changed the collective action clauses so that only 75% of the bond holders had to agree to changes in the terms and conditions. Having done that Greece then swapped the old bonds for new ones worth some 30% of the original holdings. However, some fraction of those Greek bonds were issued under English law, not Greek. Those holding those English law bonds got paid in full. Because the Greek government doesn't hold power in London and thus couldn't change that law.
It really is valuable to be able to challenge a government in a neutral forum, where the government isn't only the defendant but also possibly judge and jury. As well as being the people who can pass new laws.
But people keep saying that the NHS is at risk:
It's not Jeremy Hunt imposing a junior doctors' contract that will destroy the NHS – it's TTIP
It's just not so.
TTIP supporters claim that TTIP will include a ‘carve out’ clause similar to that in CETA, the EU’s trade deal with Canada, which states that EU countries reserve the right to "adopt or maintain" measures excluding foreign companies from public health services. And a leaked TTIP document, published by the BBC in February, seems to confirm this.
But legal experts have shown that in practice this clause would have little effect against privatisation. And privatisation could be further locked in by the action of so-called ISDS tribunals – controversial behind-closed-door courts that allow private companies to sue governments over loss of profits.
The government can privatise the NHS if it so wishes right now, before TTIP. It will be able to do so after TTIP too. And, of course, the opposite is also true. The government can today decide not to privatise the NHS and it will be able to make exactly that same decision after (or if) TTIP comes into effect. TTIP simply makes no difference at all to the decision to privatise or not. The only thing that does happen here is that the already extant right to compensation if the government reneges on a contract is reinforced. And that's it. We're actually given an example of how heinous this sort of thing would be:
And to see ISDS already at work against a public health service, there is the case of Dutch health insurer, Achmea, which successfully sued the Slovak government for bringing health insurance back under public control. Achmea won 20m euros in the case and, when the Slovak government decided to defend its sovereignty and refused to pay up, the Dutch firm, incredibly, seized government assets from bank accounts in Luxembourg, an act of piracy authorised by a Luxembourg court.
Oooh, sounds bad doesn't it? And yet the linked article actually tells us this:
Achmea BV won an arbitration case against Slovakia in which the Dutch insurer claimed the country breached investment treaties when it forbade health insurers from making a profit.
The arbiters on Dec. 7 awarded Achmea 22 million euros ($28.4 million) in compensation for damages incurred by its Slovak subsidiary Union AS because of the profit ban, the company said in an e-mailed statement today. The Slovak Finance Ministry is analyzing the verdict, which it considers unenforceable, spokesman Marek Rockar said in an e-mailed statement on Dec. 8. It can be appealed within three months, he added.
The ban was introduced in 2007 by the administration of Robert Fico, who has accused private health insurers of profiting from public funds, which instead should be fully spent on treatment. As the Constitutional Court has since ruled that the measure contradicts the constitution, Fico’s government is pursuing a plan to expropriate private providers and return to a single state-owned insurer.
Government breaks its own constitution so that company loses money. Well, shouldn't the company be able to claim compensation for that? Absolutely no one at all is claiming that Slovakia cannot run its health insurance scheme as it wishes. All that is being said is that if you decide to take other peoples' money or assets then you have to pay compensation. Just as absolutely no one says that the government cannot force you to sell your house in order to drive a new railway line through. But they do have to pay you fair market price for doing so.
The whole argument is just demonstrably false. TTIP gives investors certain protections and recourse to arbitration against governments that break contracts or their own domestic law. And that's it, there is nothing else here at all. TTIP does not say that the UK must privatise the NHS, nor that it may not, nor in fact anything at all about the issue. All it does say in regard to this is that if it is privatised and a foreign company buys some of it then if the government wants to nationalise it again then it must pay fair market value in compensation. Which is what British law already says they must do anyway. So why is it that everyone is getting so het up about this?
