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Green light is given to ‘liberalisation’ of the NHS

The government’s persistent wooing of the private sector has opened massive loopholes in trade-protection legislation that will encourage exploitation of the NHS by transnational corporations seeking entry into Europe’s public services.

Publicly-owned health systems, such as the NHS, have up to now been protected from widespread penetration by foreign companies because they have been regarded as ‘government services’.

According to the World Trade Organisation (WTO) general agreement on trade in services (GATS) a government service is one that is supplied ‘neither on a commercial basis nor in competition with one or more suppliers’.

But whenever there is a mix of public and private funding the WTO says that the service sector should be open to foreign competition.

Despite warnings to this effect from economists at University College, London, and concerns raised in the Scottish Parliament, New Labour has continued to forge ahead with hospital building under the Private Finance Initiative (PFI). The new ‘concordat’ with the private healthcare sector – announced in the NHS National Plan – suggests further that it is prioritising short-term political gains ahead of a potential economic threat to the NHS.

Before the launch of the NHS Plan (see opposite) 48 members of the Scottish Parliament signed a motion expressing concern at the threat to healthcare posed by the WTO’s free-market agenda.

Since February, WTO working parties have been discussing how to ‘liberalise’ the service sectors in its 134 signatory countries (the UK is included by virtue of its EC membership).

The WTO secretariat envisages extending the right of transnational corporations to challenge in law all areas of government policy that could be regarded as restricting ‘free trade’. Among the reform areas highlighted are nationally-set professional qualifications, government restrictions on for-profit hospitals, and drug approval processes. A report is due to be submitted to the WTO by the end of the year.

The Scottish Parliamentary motion 617 noted that ‘the WTO negotiations on liberalising government services, now ongoing, will be binding on the Scottish Parliament, and will establish limits on future health policies’. (The WTO rules apply equally to all parts of the UK.) It called for a discussion of the ‘implications of these negotiations for… health policies and current and future health service spending’.

Scottish health minister Susan Deacon said that: ‘Neither the Scottish Executive nor the Department of Trade and Industry [in Westminster] anticipate any changes to health services as a result of current WTO discussions. GATS does not apply to central or local governments or to services provided in the exercise of government authority.’

But David Price, research fellow at University College London, said Deacon and the DTI were ‘plainly mistaken’ to say that our healthcare system was safe from WTO liberalisation. ‘It is being targeted by the WTO.’

The NHS no longer fulfils the criteria of being devoid of private sector input or being free from private sector competition. ‘The PFI in particular seems to be the absolute clincher, because you’ve got private ownership of the assets.’

John Thompson, Scottish officer of the World Development Organisation, said: ‘We are concerned that so many people are completely unaware of these developments.’ The WTO discussions ‘are shaping the way globalisation develops and who will benefit from it. Civil society has to get involved in these discussions’.

‘We do not know what is being negotiated on our behalf,’ warned Price. ‘We will all be bound by the new rules when they emerge and the signs are that some hope that they will have the effect of dismantling our healthcare system.