For many years the European Commission, by and large, stayed out of interfering in the NHS. It was assumed that this was politically too sensitive and in those days the Commission was not obsessed with market reform. The EU market was always open to exceptions, perhaps the most famous being the French railway system, where Paris never accepted EU intervention.
In 2006 Labour commissioned a legal opinion on the effect of EU legislation on the NHS. The Health Department’s then commercial director, Ken Anderson, who had been involved with independent surgical treatment centres (ISTCs), told the Financial Times in January 2007: ‘My personal conviction is that once you open up NHS services to competition, the ability to shut that down or call it back passes out of your hands. At some point European law will take over and prevail … In my opinion, we are at that stage now.’ As if recognising the truth of this interpretation on 13 December 2007, with not much publicity, the Department of Health issued a document titled Principles and Rules for Cooperation and Competition, running through which are EU legal positions which have become the law in the UK.
An advisory body, the NHS Co-operation and Competition Panel, was announced in 2008 and was reported in the Financial Times in July 2011 to have been applying its interpretation of the law since 2009 – by advising on NHS mergers and handling complaints about anti-competitive practices by hospitals and primary care trusts.
During the 1975 referendum campaign Barbara Castle had to her credit predicted, correctly in retrospect, while Secretary of State for Health and Social Security, that the Common Market would be a vehicle for bringing about a market in the NHS. Despite being a member of the Cabinet, she was allowed to campaign for the ‘No’ vote, which she did and drew attention to the implications of the Common Market for the NHS. I disagreed then, wrongly I now accept, with her assertions and thought she was exaggerating the impact of the Common Market. Tragically for the NHS, she was completely right.
A lot has happened in relation to the European Commission and the UK’s NHS over the ensuing forty years of which many people are still unaware. Much has happened also to the health systems of other countries in the EU. On the latest evidence from the Netherlands it is clear that the Dutch competition authority (the NMa) has had the effect of fragmenting service provision and impeding the provision of high-quality care. A €7.7 million fine was levied on the Dutch GPs’ association for a ‘bad case of anti-competitive behaviour’, which was the association’s efforts to ensure that all areas of the country were adequately provided with GP services. The Dutch Patients’ and Consumers’ Federation has called for the involvement of competition in healthcare to be urgently reviewed.
The 2012 legislation for NHS England had already been deliberately made compliant with the Canadian Europe Trade Agreement, CETA. This emphasizes that we are not only dealing with a national political challenge, part of the domestic political debate, but a coordinated international challenge as well. I see no incompatibility in my reservations over CETA and the TTIP with a lifetime’s support for world trade agreements under the GATT and the WTO, which has added to UK and world prosperity. Those negotiations are primarily about tariff reduction. CETA and the TTIP include regulatory convergence, which for some in the US is code for curbing anti-globalisation activists in ways that are highly political domestically and have no place in trade agreements as they are commonly understood.
The German Economic Affairs Ministry – headed by the Social Democratic Party leader, Gabriel – issued a joint position paper on the TTIP along with the DGB, Germany’s trade union confederation, including the country’s largest trade unions, IG Metall and Ver.di. The paper, while praising elements of the TTIP, pledged on the ISDS: ‘Investment protection provisions are generally not required … In any case, investor–state arbitration and unclear definitions of legal terms such as “fair and just treatment” or “indirect expropriation” must be rejected.’ [Significantly, in approving the paper, party delegates insisted that its provisions should also be applied to CETA, which had by then been largely concluded and was due to be signed off by the outgoing Commission President, José Manuel Barroso, and the Canadian Prime Minister, Stephen Harper. CETA, which many see correctly as the blueprint for the TTIP, includes an ISDS.] Interestingly, the German government and the European Commission were at odds over whether national parliaments will need to ratify CETA alongside the European Parliament. The Commission said no, but Berlin argued that as a ‘mixed agreement’ with some of the issues, goods and services covered by CETA falling outside the EU’s sole jurisdiction, the Bundestag and Bundesrat should also get to scrutinise the agreement and vote on it. The German government warned that it was willing to go all the way to the European Court of Justice on this issue. How this dispute plays out will have direct relevance to what can be done to insert a healthcare amendment in CETA.
What is highly worrying in all this dispute over ISDS is the position of the chief executive of NHS England, Simon Stevens. As ‘President of Global Affairs’ at the American private healthcare giant UnitedHealth until taking up his post as NHS chief executive, Stevens was a founder member of the Alliance for Healthcare Competitiveness (AHC) – a US lobby group pushing for the inclusion of health in the TTIP treaty. He also acted as a spokesman for the AHC’s pro-TTIP position.
At its most explicit, the AHC avers: ‘Trade agreements should cover health care. Exemptions from government procurement coverage should be minimal, rather than broadly and ambiguously drawn for “health care” or “public health”.’ It is extraordinary that the chief executive of NHS England can so recently be associated with views like these.
The EU does not attempt to interfere in US healthcare policy, nor should it attempt to interfere in the healthcare policies of the NHS. Labour should insist that this simple principle features in the UK government’s renegotiations. If it did, many more Labour voters, deeply concerned about the NHS, would vote ‘Yes’ in the referendum. The many thousands of people who are involved with the NHS no longer fully trust Labour to protect it. They were baffled as to what exactly Labour would have done had they won the election. Labour has the opportunity before 2016 or 2017 to make it crystal clear to the government that there will be no soft-shoe shuffle to endorse a referendum ‘Yes’ on a minimalist agenda involving no restructuring of any substance, specifically one failing to protect the NHS from EU interference.
Where are the Conservative Party’s Eurosceptics on these issues of EU interference in the NHS? Will they ignore or raise these issues in the referendum? For many Conservatives when Britain joined the European Community in 1973 it was always envisaged that our health service would remain outside the scope of European law. This exclusion has, however, since been progressively eroded by both Labour and Conservative governments’ acquiescence in Brussels. Whether the UK Conservative government likes it or not, unless it clarifies which, if any, competences on health lie with the EU and which with national governments, it could find many who work in the NHS ready to vote ‘No’ to remaining in the EU even if it achieves some of its other negotiating objectives.
The British public have witnessed the very damaging effect of the Working Time Directive on the hours of work of health professionals and this is rightly on the government’s negotiating agenda. But a bigger concern is the gradual commodification of European health systems since the 1980s. These issues will be opened up in any UK referendum campaign. Better, by far, to sort them out before the referendum. If there is no satisfaction it will affect how the big NHS unions try to influence their members’ vote. It will affect the stance of the Labour Party in opposition. Tempting though it might be for the Conservative government to ignore this health issue, to do so may backfire in the referendum ballot box.
This article is drawn from Lord Owen’s revised ebook edition of Europe Restructured. The Eurozone Crisis and the UK Referendum published 2 September 2015.
 Tony Sheldon, ‘Is Competition Law Bad for Patients?’, British Medical Journal, 20 July 2011; Tony Sheldon, ‘Dutch GP Association Is Fined €7.7m for Anticompetitive Behaviour, British Medical Journal, 16 January 2012.
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