Business, Innovation and Skills Committee

Oral evidence: Transatlantic Trade and Investment Partnership (TTIP)
HC 804-i
Tuesday 25 November 2014

Ordered by the House of Commons to be published on 25 November 2014.

Witnesses including written evidence where submitted:

At 9.30 am

•              Frances O’Grady, General Secretary, TUC

•              Sean McGuire, Brussels Director, CBI

At 10.45am

•              David Babbs, Executive Director, 38 Degrees

•              Polly Jones, Head of Campaigns and Policy, World Development Movement

Watch the meeting

Members present: Mr Adrian Bailey (Chair), Mr William Bain, Paul Blomfield, Caroline Dinenage, Mike Crockart, Rebecca Harris, Ann McKechin, Mr Robin Walker, Nadhim Zahawi

Questions 1-152

Witnesses: Frances O’Grady, General Secretary, TUC, and Sean McGuire, Brussels Director, CBI, gave evidence.

Q1   Chair: Good morning and welcome.  Thank you for assisting us with our inquiry.  We have a very tight timetable, so I want to get going very quickly.  Before I do so, we know who you are but, just for voice transcription purposes, could you introduce yourselves, starting with you, Frances? 

Frances O’Grady: I am Frances O’Grady.  I am General Secretary of the TUC.

Sean McGuire: I am Sean McGuire.  I am CBI Brussels Director.

Q2   Chair: Some questions will be person or organisation‑specific; do not feel that you both have to contribute in such a case.  Equally, if they are to both of you and one of you has said everything the other would say, do not feel that you have to add to it.  This is to both: the financial benefit of TTIP has been estimated at £100 billion.  Where did this figure come from?  Do you think it is accurate?  Where does the additional value come from?  I should have said that is to Europe; to the UK, it is £10 billion.

Sean McGuire: The figure has come from the Centre for Economic Policy Research, and it does suggest that the benefit will be £10 billion per year.  It is difficult to estimate exactly how much TTIP will deliver, given that we do not have an agreement at the moment.  This figure is the best estimate one can have, but it is certainly not definitive.  It is important to set the ambition high, so that we have a comprehensive TTIP agreement that does deliver the best economic value for the UK.

With that said, if you look at trade agreements that have been agreed, for example the FTA with Korea, since 2011 exports to Korea have doubled, so this is a positive sign that trade agreements do provide economic value for the UK.

Q3   Chair: What about imports from Korea?

Sean McGuire: Imports from Korea have also increased, mainly in the automotive sector.

Q4   Chair: Frances, have you anything to add to that?

Frances O’Grady: Yes, I do.  I am afraid we have grave concerns about this particular piece of research.  It is based on a model called the computable general equilibrium model, which assumes perfect competition and full employment, which in itself we consider somewhat optimistic.  We are also conscious of other research studies, including ones for example from Tufts University in the States, which, contrary to the UK Government‑commissioned research, suggest that there could be a negative impact on UK GDP and indeed on European and UK jobs.  Of particular interest to the TUC, and I am sure the CBI and others, it also suggests potentially a negative impact on wages and wage share, which is clearly a key concern for working people in this country and around the EU, who are looking at trade agreements to deliver quality jobs, higher living standards and fairer shares of the wealth we produce.

Q5   Chair: You did not mention sources quoted in the World Development Movement brief, Manchester University and Ghent.  They challenged that.  Have you looked at their evidence and have you any opinion on it?

Frances O’Grady: I am sure others in the TUC have.  I have not personally.  What it does indicate is that there is a range of studies, and the figures that you get at the end of it generally depend on what figures you feed in at the start, what assumptions you make and how robust those assumptions are.

Q6   Mr Walker: Sean mentioned the Korea free trade deal.  I wonder what analysis has been made of previous free trade deals in terms of their impact on wages, jobs and some of the other points that Frances O’Grady made there.  Is there any evidence that free trade deals that the UK or the EU has signed in the past have led to falling wages or a decline in growth?

Sean McGuire: From an EU perspective, given that Korea is probably the first one that has entered into force, it is too early to predict whether there has been any decrease in wages.  The general premise is that trade is economically beneficial, and opening up markets to global trade and liberalising services brings added value to an economy.  A protectionist approach that closes markets does not also help in creating jobs or growth in an economy, including the UK.

Frances O’Grady: I wonder if I could just log, given that Korea has been mentioned and the agreement there, that clearly there is a concern from my constituency that trade agreements should promote decent labour standards.  Certainly that is written into the EU’s role in terms of promoting those labour standards.  However, as no doubt you will be aware, in January of this year the trade union offices of the transport union in Korea and the KCTU trade union centre were raided by the Korean authorities.  I am not conscious that anything has been pursued through that trade agreement to question exactly what is happening in respect of what are ILO conventions, respect for workers’ rights and organisations.

Q7   Chair: I would deduce from what you are saying that even a trade agreement upholding certain standards will not necessarily deal with abuses of those standards in the other country, if you like.

Frances O’Grady: As a layperson, I would say that it appears that enforcement of labour standards amounts to, at best, strongly worded letters.

Q8   Chair: Do you think the situation in Korea would have been better or worse without the trade agreement with this country or Europe?

Frances O’Grady: I start from the premise that we need to be clear about what the objective of the trade agreement is.  Particularly in the current climate, ordinary people are looking for trade agreements that, for sure, improve opportunities for fair trade, sustainable investment, greener jobs, better wages, living standards and indeed respect for labour rights.

Q9   Chair: Just before I move off, I want to test an assertion made by the World Development Movement again that the North American Free Trade Agreement cost 870,000 jobs in the US.  Have you any observations on this?

Frances O’Grady: Again, what it probably says to me is that often research and evidence in this area are pretty lightweight.  We have clearly contradictory evidence being presented to us.  Our experience, certainly in terms of TTIP, is that the amount of research and its reliability are pretty thin.

Q10   Chair: That is a very interesting observation.  Would you agree with that?

Sean McGuire: It is difficult to calculate exactly because of NAFTA that those jobs were lost.  We have to look as well at what it created and were there other areas where, in the absence of NAFTA, new jobs were created.  That is an important mindset; it is not an exact science and there are a number of variable factors to be taken into consideration in these agreements and, indeed, in economic activity.  It is very difficult to have a definitive figure.

Q11   Chair: Very quickly, it has been estimated that the UK’s proportion of that £100 billion benefit would be about £10 billion.  Do you think that is a reasonable estimate, if you accept the £100 billion estimate?

Frances O’Grady: One key concern I have—and please do correct me if I have got this wrong and if it is your shared understanding, Sean—is that I understand those estimates are based over a timeframe of 20 years.  That leaves quite a lot of scope for interpretation.

Sean McGuire: I think it is 10 years, but nevertheless it is a scope.  We are talking about something that has not been agreed as yet.  We do not know how ambitious this will be.  If it was an ambitious agreement that dealt with the elimination of tariffs, had comprehensive market access and opening up for services and products, and indeed dealt adequately with the regulatory co‑operation aspect, the size of the prize could be significant.  At the moment, it is unclear, because we do not have all the detail and we do not have a text.

Q12   Mike Crockart: Given the answers that we have just had, I am not entirely sure that the question I am going to ask can reasonably be answered.  In light of the light research and the fact that it is not an exact science, to use the terms that you have already used, my question is: what proportion of the perceived benefit, the £10 billion that is meant to come to this country, is made up through tariffs being removed, standardised regulations and suchlike?  Where does that supposed £10 billion come from?

Sean McGuire: Tariffs are relatively low between the UK, EU and US, but nevertheless they are significant in certain sectors.  In some sectors, particularly clothing, they can be up to 20%; in automotive, they are 10%.  The averages for the US and EU are around 5.2% and 3.5%.  The elimination of those tariffs could bring significant cost savings to businesses, not just multinationals but particularly small and medium‑sized businesses that have to incur these costs when they export to the UK.  Also the volume of trade flows between the UK and the US is so significant that, even in areas of intra‑company trade, the removal of those tariffs could bring significant cost savings.  They estimated in the European chemical sector that could be in the region of about £500 million a year, so these are not insignificant sums of money that could be used for other forms of investment.

For the CBI, the real prize is the regulatory convergence and the removal of duplicate certification and standardisation procedures, where the standards are similar or the same.  For medium‑sized businesses, those are where the real economic gains can be made.  Sometimes we focus too much on the £10 billion but, if a company can increase exports by 10% and bring an economic benefit to that, that is something that should be supported.

Frances O’Grady: Could I answer the question with a question?  As I understand it, 80% of the benefits will come from the removal of non‑tariff barriers.  We need some clarity about what those non‑tariff barriers are.  If it is about where standards are genuinely equivalent and it is about a recognition of those genuinely equivalent standards, that is a good thing, but there is growing concern amongst trade unionists and the public about what might make up the remainder of those categorised as non‑tariff barriers.  Does that include a levelling‑up or levelling‑down of labour standards, for example, and how is that quantified?

Mike Crockart: Your belief is that the 80% would come from the removal of non‑tariff barriers.

Frances O’Grady: I believe that is what the Government’s commissioned research says.

Mike Crockart: That is the CBI’s belief as well.

Frances O’Grady: It is the Government’s commissioned research, but again there is a lack of clarity about what that means. 

Q13   Mike Crockart: The whole other side of the equation is that tariffs are generally perceived as a bad thing, but of course they are income to the Exchequer.  If we are talking about lower tariffs, you are talking about lower income to the Exchequer.  Do either of you have any views on whether that lower income to the Exchequer will be offset by greater economic rewards or activity across the economy as a whole?

Frances O’Grady: I would use the phrase that it is one of those ones where you would not have started from here.  What Sean described as an ambitious agreement others may see as putting the cart before the horse.  There are certain industries, like automotive and chemicals, where we could have started by looking specifically at tariffs, where we could have offset the loss of revenue and where the removal of those tariff barriers or reduction could genuinely lead to greater trade and greater growth and benefits for all.  Certainly that is a proposition that we could have interrogated and looked at on a sector‑by‑sector basis with employers and unions fully involved in that rigorous analysis.  Unfortunately, we have started with this global “ambitious approach”, with very little evidence to support it.

Mike Crockart: Of course, not knowing what is going on in the negotiations, we do not know whether we will end up with a global ambitious agreement or whether, in actual fact, we will end up with precisely what you are talking about there.

Frances O’Grady: Our advice would have been, and the IoD has taken the same view, that it would have been much better to start with the industries and issues that we know and properly involve the social partners in developing propositions for agreements on those.

Q14   Mike Crockart: My last question is to Sean: are there difficulties with setting out the global ambition?  Is the potential for benefit big enough for us to have taken this risk?

Sean McGuire: We have to set the level of ambition high.  You must bear in mind this is a negotiation; there are two partners.  If we agreed a tariff only with the US, would they come back to the table to deal with some of these more complex issues where we feel that the real benefit would arrive?  We doubt that.  We have seen it in areas around financial markets regulatory convergence, where there have been mechanisms set up to deal with some of the regulatory issues, but they are nothing more than talking shops without delivery.  For that reason, we had to place the level of ambition high.

If you go around the country and speak to companies of all sizes and from all sectors, and we in the CBI are in the process of launching a number of case studies, you will see that there is great potential benefit from freeing up resource and indeed financial resource for medium‑sized businesses and those that have not exported or find it incredibly difficult to export.  It would allow them further investment, in terms of growth, jobs and competitiveness within certain regions.  It is not just for the multinationals; it is for the medium‑sized businesses.  That is something worth pursuing in the current economic climate.

Q15   Mike Crockart: Is it possible to argue that, in fact, the non‑tariff changes are of greater value to the smaller companies?  The larger companies, to be frank, have large departments that can deal with trading in 120 countries but, if you are a small business that wants to trade in your first country and the major market is America, then a simplifying of those non‑tariff barriers is the thing that will benefit you most.

Sean McGuire: I would agree.  The small and medium‑sized businesses are disproportionately affected by the non‑tariff barriers, yet the scale is greater for large multinationals.

Q16   Chair: Before I move on, can I just ask you—and this is particularly relevant to Sean, although Frances might have an observation on it—if you have done a sector‑by‑sector analysis of the potential impact of TTIP, and not just by sector but of the international companies, and small and medium enterprises?  Have you done any such work in that area?

Sean McGuire: We have not done a sector‑by‑sector analysis, again because TTIP is quite wide.  It is hard to predict the cost or the benefit of something that has not been agreed.

Q17   Chair: I am not sure I accept that.  Yes, it is wide; I accept that.  But there are obvious implications for the motor industry, and it would be quite reasonable for you to have done some sort of analysis of that.  Have you done it?

Sean McGuire: No.

Q18   Chair: You mentioned the chemical industry.  Have you done that?

Sean McGuire: No.

Q19   Chair: Do you not think you should?

Sean McGuire: The Chemical Industries Association has its own figures, as does the SMMT, of the benefit for trade in their area.  The CBI has not carried out an economic analysis.

Q20   Chair: This is a big issue.  If you are pushing it, then I would reasonably expect you to have developed an evidential basis underpinning the assertions that are made there.  If you have not done, given the debate that is taking place, do you not think you should do pretty quickly?

Frances O’Grady: We would welcome—and I am sure Sean would agree—for example BIS convening groups.  I speak regularly to employers in the chemicals industry and automotive in particular, where we do perceive potential benefits, but we would like to have a sector‑by‑sector rigorous analysis and evidence base.  I am sure Sean would agree we would want both social partners actively involved in that.

Q21   Caroline Dinenage: Good morning.  We have touched on some of these issues already but, just for clarity, I would like to hear from both of you.  In all agreements, there are winners and losers.  To you, who would be the winners, and who loses out as a result of TTIP?

Frances O’Grady: Again, in the absence of evidence, this is a somewhat difficult question to answer.  I am not sure whether there are going to be further questions on areas of particularly concern for the trade union movement, notably public services and the ISDS mechanism.  We are concerned that, in the context of a doubling of the value of outsourced public services under this Government to the tune of £88 billion, this agreement could leave more public services vulnerable to privatisation or at least make it very difficult for a future Government to reverse that privatisation.  Those are key concerns for us and, as I have already mentioned, there are different research studies suggesting that the UK would be a net loser.  The problem is we just do not know, because the research is not good enough.

Sean McGuire: Again in the absence of a final text, it is all hypothetical.  If you are looking at it from a UK perspective, one of the potential benefits and indeed major gains would be in our service sector, if there was liberalisation in the US service economy and opening up on the rules on some levels of public procurement.  There is great potential for UK companies to access the US market and deliver products and services in that area.  There is potential. 

Again, we are talking about an agreement that does not exist.  One of the issues that the CBI continues to push with the European Commission and in the US is that financial services is an important sector for the UK, and we would like to see that as part of a future agreement in TTIP.  The US has, to date, refused to open negotiations on that, so there is potential but, after seven rounds of negotiations, there has not been a lot of progress in a lot of areas.

Q22   Mr Walker: Focusing on this area of international trade, the UK Government has put a great deal of emphasis on increasing exports to the rest of the world, and we are the most externally facing country in Europe in terms of our exports.  We export more to the world outside the EU than any other EU country.  Do you feel that there is a risk that this agreement, if reached—and accepting your point that we do not know the exact terms yet—could threaten some of that trade, and that economies elsewhere in the world with which we trade could lose out as a result of a free trade agreement between the EU and the US?

Sean McGuire: You are correct in saying that the US is our largest market outside the eurozone, but the UK’s export performance has been extremely poor over these past 20 years.  Indeed, there is the potential to use trade agreements to boost export performance to other parts of the world.  TTIP is an important one because, even though we do export the largest amount to the US, it is in decline.  If the US is in decline, our eurozone exports are in decline, and indeed the performance of the eurozone is poor at the moment.  Other economic areas have had patchy economic development in recent times.  Anything that boosts and helps increase our export performance should be pursued.  We do feel that TTIP could help underpin a successful export strategy for the UK and boost those areas, particularly in financial services, that still struggle to penetrate a quite protected market in the US.

Q23   Mr Walker: Your argument is that it could underpin that strategy in the US.  What I am asking about is other markets.  The fastest‑growing markets in the world are outside the US and the EU.  Do you feel that it would have an affect on those or do you feel that they would all benefit from a rising tide in terms of trade?

Sean McGuire: From a CBI perspective, TTIP is only one element of the EU’s trade agenda.  We would like to see the completion of trade deals with Japan and with India.  There are initial discussions about a bilateral investment treaty with China.  We would like to see the Mercosur deal concluded, so we see this as just one element of a progressive and outward‑looking European Union on trade policy.  An EU‑US agreement could set a gold standard for certain other trade agreements around the world.

Frances O’Grady: Conversely, we are conscious of a Bertelsmann Stiftung study that projected that EU trade with neighbouring states in North Africa and Eastern Europe could decline by an average of 5%, with a comprehensive agreement that would devalue existing preference agreements.  We are particularly concerned about the impact that could have on developing countries. 

I would also add that we are concerned about this principle about whether this is about levelling up or levelling down labour standards.  Again, it is something particularly important in terms of emerging and developing countries.  If we lock in a principle that allows for levelling‑down, then that will be felt particularly acutely by workers in those countries.

Q24   Mr Walker: On that argument about levelling down, I took your point about the treatment of unions in Korea.  Surely the TUC would want to see the UK reaching freer trade agreements with the heavily unionised American automotive sector, rather than perhaps areas of Asia, which have very weak worker protection, China in particular, where there might be very little protection at all for workers in the automotive sector.

Frances O’Grady: We work very closely with our sister unions in the United States, which, as you will be aware, has only ratified two out of the eight core ILO conventions.  Those that have not been ratified include the freedom of association and collective bargaining.  Our sister unions in the AFL‑CIO have asked us particularly to press the importance of seeking to enshrine adherence to those core standards within this agreement, and indeed we would do that in any agreements.  If it is helpful, we could supply the Committee with the ITUC model clause that we would seek to include in every agreement that is signed.

Q25   Mr Walker: On that point, if we going to be buying cars and having trade in automotive vehicles from different parts of the world, are you saying that American workers are disadvantaged compared with those in China or other countries in Asia?

Frances O’Grady: They are certainly disadvantaged compared to the social dimension and provisions in the EU.  We, as you would expect, I am sure, as a worker’s organisation, believe that such agreements should be seeking to promote and improve labour standards including in countries like the US, which our sister unions in the States have specifically asked us to press for.

Q26   Mr Walker: Just more broadly in terms of the impact of this, do you see TTIP having any impact in terms of UK or EU trade with Commonwealth countries?

Frances O’Grady: Again, as I understand it, there are similar principles—concerns about displacement and so on.  Again, I am not sure whether there have been specific studies on that.

Sean McGuire: From a CBI perspective, this should be viewed in its entirety.  TTIP is only one element.  We should pursue progressive strategies with Africa and with neighbouring countries as well.  The EU has concluded an EPA with Africa and there is a development agenda there.  The emphasis is on TTIP, but we do believe that this must be a complete package of trade deals around the world that will secure economic growth for the UK and the EU.

Q27   Ann McKechin: On this point, it has been long argued at the WTO by developing nations that the protectionist policies in both the EU and the USA have restricted their own ability to trade.  If there were liberalisation between the two trading blocs, the EU and the USA, would it be more or less likely that we could make progress at the WTO, in terms of protectionist policies against the south, which you seem to allude to, Sean? 

Sean McGuire: The absence of a WTO agreement in Doha has the potential of creating a more protectionist environment in certain parts of the world.  We have seen development of that in Latin America in particular, where there is a more protectionist agenda by local content provisions being included, which restrict access for UK and European exporters.  Given that the WTO process and the multilateral systems seem to be—I would not say dead—certainly on life support, anything that can promote the free trade and liberalisation agenda, and combat a more protectionist agenda, should be welcomed.  If there are a number of agreements, whether with the US, with India or Japan, this element of having regional trade agreements could help pursue a more ambitious agenda in the WTO.  An absence of a bilateral and multilateral system, in our opinion, would lead to much more protectionism around the world, which would not be good for growth and jobs.

Frances O’Grady: It depends on the definition of protectionism, does it not?  Protecting who and how?  Are we protecting the rights of corporations to make big profits at the expense of a fair share of the rewards for workers?  Certainly we would share the concern of a number of union movements around the world that we want to see fair trade agreements.

Ann McKechin: There have been lots of complaints about protectionist policies in Europe and the US.  If they relax it between the two blocs, they might create a practice that would then allow them to perhaps be more willing to consider reducing this level of protectionism against other countries as well.  I am just trying to see whether that is the right frame of mind to sort out the problems between the two blocs before they then start to look at the rest of the world.  That is a debate for another day. 

Q28   Paul Blomfield: I wanted to probe a little bit on the issue of transparency of the negotiations, because that has clearly been an issue of significant concern raised by many people.  Given that the details of the EU negotiation position remain secret, how do you both feel, as key stakeholders, you can contribute to shaping the final agreement?

Frances O’Grady: I am sure like Sean, we are not entirely clear who has been spoken to when and who has seen what, which is part of the problem.  We have met with the EU Trade Commissioner; we have met with the negotiator; we have met with various politicians.  The problem is that the approach seems to be one of “trust us”, and I am afraid the public do not, as we saw in the response to the consultation on ISDS in particular.  We think that the presumption should be one of transparency and accountability, rather than what appears to be the other way around; the presumption is one of secrecy and lack of transparency. 

There also seems to be a confusion between communication and genuine consultation.  While we have had lots of communication, we have had no evidence and no way of telling whether any of our input has influenced any actual decision‑making, because we have not seen a text.  It is quite comforting, Sean, to hear that you have not either.

Sean McGuire: We have not.  We are fully supportive of transparency within TTIP.  Since Commissioner Malmström took up her position, she has made positive steps to improve that transparency agenda.  Like the TUC, we have met with the Trade Commissioner or the former Trade Commissioner, the negotiator, a number of people within DG Trade and MEPs.  The Commission has been very open to all stakeholders.  We do not get any type of preferential treatment in terms of seeing documents. 

I also believe there is an important point about transparency.  I will slightly labour the point: this is a negotiation and we are negotiating with quite an aggressive negotiator on the other side.  While we are very happy that all positions and agreed positions may be made public by the Commission, negotiating positions that are not legally binding but can help the Commission in its negotiations with the US should not be made available, because it could weaken the EU’s hand in getting a robust deal.  I am not saying that we as the CBI would want to see those non‑official documents, but there has to be some protection in terms of secrecy, because of the negotiations.

In terms of consultation, I agree with Frances.  Apart from ISDS, we have not been consulted on any other issues.  We put in our views; we put in our comments.  We are treated like anyone else.  Perhaps the only group that has more preferential treatment is the advisory group that does see the documents.  This group is a representative of civil society and business organisations, but they are not allowed to leave the room with the text.  That is the only group.  We as the CBI do not sit on that.

Q29   Paul Blomfield: Can I push you a little further, Sean?  38 Degrees has claimed, rightly or wrongly, that 90% of lobbying within the EU is from business.  Clearly you are a key voice there and would not be doing your job if you were not lobbying effectively on the issue.  What are the key points you have been pressing?

Sean McGuire: I suppose there are three main elements to our position.  Our position is we would like a deal done by 2016 that really does provide economic benefit for the UK.  That goes to three main elements: it is the elimination of tariffs; it is the opening‑up of the services market, and we include the public procurement element of that; and it is regulatory co‑operation.  To add a point on that, it is co‑operation in terms of where there are two sets of rules that are similar.  It is not harmonisation.  CBI does not call for harmonisation, nor do we call for a lowering of standards or the adoption of US standards in the EU.  It is about where the processes provide duplication for businesses: where their product or service can be sold in the EU and there is a similar standard in the US but they have to go through another process of certification.  That is where we want to talk about regulatory co‑operation.  Those are the three main elements that we would want out of a deal, and that is what we have been pressing.

In terms of the statistics from 38 Degrees, I could not possibly comment, but I know that the Commission is completely open and I do not feel that we get any preferential treatment from DG Trade or any other elements of the Commission.  This is just one agenda point for the CBI.  We have many within a European context.

Q30   Paul Blomfield: Thanks, Sean.  Have you expressed a view on the ISDS provisions?

Sean McGuire: We have submitted, like many others, to the consultation on ISDS.  We are supportive of ISDS and will continue to pursue throughout the negotiations that ISDS should be part of a final text, but we will wait to see the outcome of the Commission’s consultation before commenting.  That is our starting point.

Q31   Paul Blomfield: I am sure we will come back to that issue, so I will leave it for now but, Frances, I wonder if you could share with us your key concerns that you have expressed from the TUC to the EU negotiating team.

Frances O’Grady: Our key concerns are about genuine transparency, about genuine consultation in respect of all aspects, concerns about labour standards, but also environmental and consumer standards.  There is a very strong concern from the trade union movement, and many other organisations as well, about what we understand to be a negative list, by which you have to lobby to get certain areas like the NHS excluded, rather than a positive list, which would have been a much more sensible and confidence‑building approach to the agreement, in our view.  There are real concerns that this heralds further privatisation—I am very interested to hear Sean’s comments on that—at a time when we know that there is a very powerful lobbying exercise being conducted by American health companies in respect of a piece of the NHS action and huge concerns about ISDS.  We find it very difficult to justify why there should be a special and privileged court giving unequal rights to foreign investors. 

This is based on real‑life concerns in respect of other trade agreements.  For example, Australia is being sued by Philip Morris on issues of plain packaging for cigarettes.  It is not just the question of whether that company can win, but also the impact on other countries like New Zealand.  It is what we would describe as a chilling effect, where they do not pursue that policy of plain packaging because they are worried that they may be sued by companies in the future.  There is a whole range of concerns that we have been pushing.

Q32   Chair: Are these companies able to sue anyway, irrespective of an ISDS agreement?

Frances O’Grady: Our concern is why they cannot use the domestic courts like anybody else.  Why do they need a special and what has been largely secret court to secure their investments and secure against potential loss of future profits?

Q33   Chair: I believe the CETA arrangement has been very tightly drawn to reduce the vulnerability of the agreement to such actions.  Is it not possible to do it in this way?

Frances O’Grady: So we have been told, but given there is a specific consultation on ISDS in respect of this agreement, it would make sense to put on hold that element of CETA until we see the outcome of this consultation.  We are very conscious that the Government’s own commissioned research from the LSE showed that the costs of ISDS outweighed the benefits.  Why on earth would we pursue this special court to privilege the rights of foreign investors and to potentially compromise the democratic oversight and accountability that states should be exercising?

Q34   Chair: It is possible either not to have ISDS or arrangements by which it is so tightly drawn that it would not be a viable process to engage in.

Frances O’Grady: Our view would be the simple approach would be to scrap it.

Q35   Chair: Can I just come back to the issues of transparency?  Quite frankly, Frances, I found earlier one or two of your answers were rather contradictory.  You said that there was no transparency or consultation, and yet on one of the key elements of it, the ISDS, there is a very comprehensive consultation exercise.

Frances O’Grady: My definition, and I think it is the definition that you will find in respect of EU laws on information and consultation, is that communication, simply information, is not the same as consulting with and taking on board those views, and those views influencing your decision‑making.  That is different.

Q36   Chair: With respect, they have had a consultation and 150,000 submissions, but you are saying they are not taking any notice of that; that was just a communication exercise.

Frances O’Grady: We will see, will we not?

Chair: We will see.  That is the key to it.  You are taking a position that is not borne out by evidence of this moment.

Frances O’Grady: We cannot see the text, so we do not know.

Chair: I understand the new Commission is likely to announce the text.

Frances O’Grady: Will that include scrapping it?

Chair: Again, we will see.  The point is you are taking a position in anticipation of something. 

Q37   Caroline Dinenage: I want to speak to Sean.  You have stated in your evidence that British companies will secure improved access to US public procurement contracts.  I am interested to find out from you how you think this will impact the Buy American policy in US states.  Will that no longer be allowed?  What is your understanding of the impact on that?

Sean McGuire: This is perhaps one of the most challenging elements of the negotiations.  Of course, public procurement is regulated at state level, rather than federal level, which makes it more difficult to get buy‑in from all states.  It is our opinion that we would pursue a strategy of, rather than Buy American, buy transatlantic.  As part of TTIP, European and indeed UK businesses would have access to procurement contracts equal to that of the Americans.  That is the policy that we are pursuing.  Ideally, we would like to see the end of the Buy American provisions, but this is a very political issue and unlikely to happen, so the best alternative would be buy transatlantic.  If that was a policy that was pursued and agreed in the final text, a number of countries could access the procurement market, where we see there are restrictions that have dated back for over 100 years, which have restricted access to non‑domestic providers of public procurement.

Q38   Caroline Dinenage: As you say, this is a decision for the states rather than the overall Government.  If some individual US states do not accept the removal of the Buy American regulations, how can you foresee that British companies can gain access to those markets?

Sean McGuire: In the absence of an agreement, it is very difficult to say but, if the general provision was there, then there would be a right of appeal if you were discriminated against because you were a non‑domestic provider.

Q39   Paul Blomfield: I briefly want to pursue that.  Do you think, Sean, that it is a deal breaker if individual US states are not fully part of the agreement?

Sean McGuire: There are many potentials for deal breakers.  Again, I am not privy to the negotiations.

Paul Blomfield: In your view—the CBI’s view?

Sean McGuire: One of the challenges that one has with TTIP is that, yes, you can have the negotiators, whether it is USTR and indeed the European Commission negotiating on certain things.  The challenge is where there are regulators on both sides of the Atlantic, and they have to be brought into the process.  That is the biggest challenge.  If the regulators fail to buy into the vision of having a comprehensive TTIP, then, at the end of the negotiations, we would have to look at the entire package and see whether it adds that significant economic benefit for the UK.  Only on the basis of a concluded TTIP would we be in a position to do that, but regulators at state level and indeed some of the regulators at a European level are protective of their rules, because it is what they know best and want to pursue.  Getting better co‑operation, dialogue and constructive dialogue so that we do not end up in a situation where the markets are closed on one side of the Atlantic would be a positive outcome.

Frances O’Grady: The US unions are very supportive of the Buy American policy, because they are worried about jobs and because they do not see any credible plan for what would happen if those jobs and wages were under threat.  In addition, we are also concerned about the freedom of states to be able to include living wage clauses and local employment clauses in procurement contracts.

Chair: You have just covered my question, so I will bring in Ann.

Q40   Ann McKechin: Can I come back to this issue about the dispute settlement process?  Could you clarify to me whether or not, Frances, you would consider that, if we do not have a bespoke commercial arbitration tribunal to deal with disputes, companies would still be able to raise proceedings in the domestic courts within the European Union, as already occurs under the EU law?  At the moment, we have a major court case by the Scottish Whisky Association against the Scottish Government on minimum pricing for alcohol.  Presumably you are not arguing that we should not allow companies the ability to challenge; it is just the way in which they find out.

Frances O’Grady: Absolutely.  It is the question as to why they need a special court.  The arguments that have been made to me to justify that special court are that companies, so I am told, would not risk the investment without those special courts, which seems to me conceptually quite difficult, given I thought companies were supposed to be all about risk and entrepreneurship.  It is very difficult to understand why those special courts should be necessary and very difficult to understand why there are not equivalent powers for workers, citizens and states, for example, to enforce aspects of the agreement that are important to them in the same way.

Q41   Ann McKechin: I will take that then to Sean.  The argument is that domestic courts allow every party to take a legal challenge.  These types of processes are really only designed for corporate interests.  Is that a fair balance?

Sean McGuire: Our understanding of the situation is that foreign investors could go through national courts, but any investment decisions contained in TTIP would not be enforceable through that route.  That is why you need an ISDS to further back that up.  On the ISDS process, there is room for improvement through greater transparency and clearer definitions.  Without pre-empting the outcome of the consultation, there are elements of the ISDS that could be improved that would address the transparency issues.

Q42   Ann McKechin: You will be aware that both the French and German governments have already stated on the record that they are opposed to the format in the original definition, so clearly it looks as if, within the EU, there is a major disagreement about this process and how it would work in conjunction with the trade agreements that are implicit within the European Union, which are subject to domestic procedures.

Sean McGuire: The Germans and French have commented.  Indeed, if you look at the German situation, it is perhaps not as clear‑cut, because it is a coalition and there are diverging views within the coalition on the ISDS position.  As I said, there are legitimate concerns.  We are open to addressing that, but I do not think that removing it from the package at this moment would be in our interest, because this is a negotiation.  If we remove ISDS, which is important for the US, there could be a tit‑for‑tat process where something that is fundamental to the UK, and indeed the EU, could be removed.

Q43   Ann McKechin: The worry on the EU side—and you will be aware of public opinion—is that legal challenges would be used as a way to influence public policy in issues about education, health service and social care.  Also the rising number of legal challenges that are coming under this dispute settlement process in the last decade is far in excess of what it was in the decade beforehand.  There is cause for concern.  Do you think that that can be addressed in a way that would provide adequate protection for governments to make their own decisions on public services?

Sean McGuire: It can be addressed, but we believe, and the Commission has gone on record to say, that TTIP would not interfere in Government’s decisions on public services and indeed on public health.  It has gone further through the GATS, which would provide further protection for governments and member states to pursue their own policies in these areas.  It is important to address legitimate concerns and tackle them, and yet, despite the reassurance from the Commission and others, there still seems to be this belief that for health services and public health governments would not be able to pursue their own policies.  It is how you get the communication out there, which is why we welcome the ISDS consultation and the potential outcome to explain and do away with some of the myths that may be propagated around it.

Q44   Chair: I have William and Paul to come in, but there is just something I want to ask you.  There is an assertion in the World Development Movement’s campaigning document that says, “Because the state has to pay the costs of the case even if it wins, and because the compensation to be paid if it loses is so astronomical, even the threat of being taken to arbitration can be enough to persuade governments to abandon plans to introduce regulation.”  It would seem absurd to most people that, if a private company tries to sue a Government and it loses, that country has to pay the costs.  Is that assertion correct and, secondly, if it is correct, is there anything that could be done in the negotiation on ISDS to change that in the future?

Sean McGuire: I think we could look at the possibility of making a loser‑pay principle for an ISDS.

Q45   Chair: You just think.  Do you have any legal evidential basis for that?

Sean McGuire: I cannot pre-empt discussions, but we would be open to the idea of consultation on this, as part of the ongoing consultation.

Q46   Chair: Have you submitted any evidence on it?

Sean McGuire: We have submitted evidence, but not on this point.

Chair: Do you not think you should do then?  Frances.

Frances O’Grady: I wanted to add there are two particular areas of concern, even if you secured that principle.  Having adopted a negative list, it then becomes very important how you define public services, if your intention is that they should not be open to this process.  What does that mean for partially privatised public services?  What does it mean for what most people understand as a public service, like further education, which has now been reclassified?  Is that still vulnerable?  What does it mean in respect of the Government’s democratic decision to reverse an area that has been privatised and look to bring it back into public control?  For example, in the area of rail, for example, would a government be vulnerable?  There are so many holes in this that it really makes us question exactly what the purpose of this mechanism is, which was, after all, modelled on an arbitration process between corporations that we feel is entirely inappropriate for deciding matters between corporations and democratic states.

Q47   Mr Bain: Is the central problem with the ISDS not that it potentially puts the EU in breach of one of its key principles, which is the rule of law?  That says that you adjudicate and decide disputes in transparent courts in which people are treated equally.  This creates a separate jurisdiction, in which only some interests can be represented.  Everybody else is cut out.  Would it not be the case that, if there was an agreement signed through this process, that becomes part of EU law?  As Ann has said, there is potential within domestic law to sue national governments but, at the end of the day, the ultimate arbiter about these things is the European Court of Justice.  Is it not the case that, if ISDS were to go through in any form that has been indicated so far, it would jeopardise the key role that the ECJ plays in this and put at risk one of the key principles of EU law and the founding treaties?

Sean McGuire: Again, ISDS has been in numerous trade agreements.  It is in the majority if not all UK trade agreements.  It is in EU‑Korea.  We have to think, going further, that if we do not have an ISDS in an EU‑US agreement, what are the chances that we would get an ISDS procedure with those trading blocs for which perhaps we would need it?  I refer particularly to China and India.  While ISDS has its imperfections, there is an opportunity to improve the functioning, transparency and definitions to alleviate legitimate concerns.  It is a principle that we must continue to have because, in situations where the judicial procedure is not as transparent or is not as fair, companies should have the right to pursue legitimate action against a government if they have been treated unfairly or discriminated against because they are non‑domestic.

Frances O’Grady: I have asked before exactly which EU member state do business organisations feel has a domestic legal framework that is not sufficiently robust, and have yet to receive an answer.

Q48   Mr Bain: At the end of the day, it is the Commission and other member states that can take other member states to the European Court of Justice if they feel that there have been any breaches of EU law.  Having a position that undermines that would seem to be very dangerous

Frances O’Grady: Frankly, it would be naïve not to recognise that there is a very strong lobbying interest on behalf of certain companies that also lobby very hard for this particular mechanism.  Of course, outsourcing of public services is one of the fastest growing industries globally.

Q49   Paul Blomfield: I am sorry to push further on this, but it is a key issue.  Following on from your point earlier, Sean, all of us would accept the basis for ISDS provisions in bilateral agreements where access to legal systems was inadequate, but surely that does not apply within the case of the EU‑US agreement, where already American companies are currently taking or preparing action against the UK Government, for example Philip Morris, I think, on the Government’s position on standardised cigarette packaging.  I just wonder if you can be absolutely clear with us, Sean, in that context, why you and the CBI think ISDS provisions are fundamental to the US? 

Sean McGuire: The simple answer to that one is the judicial procedures in a number of member states are not harmonised, and there are certain member states, in particular Italy, where it can take up to 10 years to address these issues.  These are not fast and efficient judicial systems.  By going through the domestic route where there is no harmonisation, having an ISDS that allows for a speedier and more harmonised approach is in the interest of particularly US businesses.  To answer Frances’s question about which member states, Italy has a very slow process for dealing with these, to give you one example. 

Frances O’Grady: It might just be helpful to be aware that the US has agreed a trade agreement with Australia that does not include this mechanism.

Q50   Chair: Quickly, before we move on, Sean, from some of your earlier comments, I would gather that you are concerned that, if ISDS were left out of this free trade agreement, it would provide a precedent to justify not having that in any future EU and possibly EU‑US agreement with countries such as China, India, Brazil or whatever, even though it could become very necessary.  Is that a reasonable summary of what you are trying to get at?

Sean McGuire: Yes.

Chair: Have you any comments on that, Frances?

Frances O’Grady: Apologies, I was just looking at a very helpful speech on this issue that again we could supply to the Committee, by somebody with very real experience of this mechanism from the inside, who is very critical of it too.

Chair: If you would like to send us the speech, we will have a look at it before we report. 

Q51   Rebecca Harris: The question I was going to ask has pretty much been covered.  I know what your position is on this, but one other question as a supplementary is: are you aware whether the EU‑Canada trade agreement, which took nine years to negotiate, has these provisions as well?  It does.  Canada insisted on having these kinds of provisions in.

Sean McGuire: Yes.

Q52   Nadhim Zahawi: Good morning, Frances and Sean.  Frances, in your evidence to the Department, you state that together the “EU states combined offer a far more attractive package to international partners than the UK does alone.  This has become particularly clear in relation to the proposed Transatlantic Trade and Investment Partnership between the EU and the USA.”  Are you arguing that the UK would get a worse trade deal if it were to negotiate outside of the EU?

Frances O’Grady: What we are arguing, and unfortunately in some ways we have not had sufficient time to air this view, is that there is real potential for the EU to develop and agree good, fair trade agreements.  We are not against fair trade.  It certainly makes sense for the EU as an institution to seek such agreements that can provide benefits for all parties.

Q53   Nadhim Zahawi: Let me just push you on that.  Does that mean the UK could not do the same on its own?

Frances O’Grady: Clearly states banding together have an opportunity to have a stronger negotiating hand.

Nadhim Zahawi: We would get a worse trade agreement.

Frances O’Grady: It depends on the particular circumstances, does it not?  But there is an opportunity here.

Nadhim Zahawi: You are hinting that we would get a worse trade agreement.

Frances O’Grady: I am not hinting.  I am saying it depends on the circumstances and the deal.

Nadhim Zahawi: You said clearly together we would do better.

Frances O’Grady: Positively, it is one of the reasons why we are in the EU, is it not, so that we can gain advantages from that?  We should certainly seek them.

Nadhim Zahawi: By deduction, on our own we would do a worse deal.

Frances O’Grady: For sure the TUC believes that there are jobs and investment benefits from being a member of the EU.

Nadhim Zahawi: That I get, but would we get a worse deal on our own?

Frances O’Grady: We would have to see, would we not? 

Q54   Mr Walker: We have heard a lot about lack of transparency and lack of apparent consultation.  Surely if these things were closer and if we were negotiating these things for ourselves, we would have better accessibility and better consultation going on at the UK level.  There is an argument, but all the arguments that the CBI and the TUC have made over the years for us banding together and joining with other EU countries in order to make our case apply equally well to TTIP.  Therefore, which do we go for?  Do we go for maximum transparency and maximum accountability, therefore deciding things at a democratic-nation-state level, or do we go for the benefits that you are talking about, in terms of jobs, growth and banding together?

Frances O’Grady: I am not sure the UK’s record on transparency in negotiating trade deals on its own is frankly much better.  That principle applies regardless of the level of negotiation of trade deals, and there needs to be a recognition that the public mood and appetite have shifted, because we are in a context where people’s jobs, living standards and share of those rewards I referred to are under great pressure.  People’s expectation of transparency, their trust in the process, is somewhat under pressure too.  Therefore, there is a greater expectation of greater transparency and involvement, regardless of whether it is the UK or the EU negotiating.

Chair: We could probably have a very long debate about that, Frances, but we do not have time today.

Q55   Nadhim Zahawi: I have one more question about the overall assessment.  Of course, we have talked a lot about the investor‑state dispute settlement.  In your view, are there other areas of potential sticking points that could impact positively or negatively on the UK from TTIP?  What other areas do you think could impact positively or negatively?

Frances O’Grady: As I said right at the start, we would like to see an agreement that set out as an objective the creation of decent greener jobs, sustainable investment and improved living standards for both parties.  This does not have to be a case of beggar-my-neighbour; this ought to be a way of using fair trade as a way to improve the lives of citizens in both partners.

Sean McGuire: From the CBI, one word that has not been mentioned much in this session is the benefit that this could bring to consumers.  Competition creates greater access to goods and services.  It also reduces costs.  To give just some examples, a pair of jeans coming into the UK has a £12 duty on them.  This could be passed on to the consumers, so there is a real benefit to the consumer here as well.  There are other areas, as I said, such as automotive and clothing.  Small businesses, for example domestic beer producers, are subject to 157% duties in certain states.  These are all benefits that could be brought to the UK and to the consumer and to small businesses and passed on.  While it is important to look at the issues of ISDS and other ones, we should not forget that there will be winners here and it will be British businesses, small and large.

Q56   Chair: Thank you.  That concludes our questions, apart from one that I really want to ask.  Frances touched on this.  There has been a huge volume of complaints about the lack of transparency and consultation on this.  On the other hand, the EU has negotiated all sorts of trade deals in the past.  Has there been any less or more transparency and consultation on this particular process compared with trade deals done in the past?

Frances O’Grady: There has been significantly more contact, Chair. 

Q57   Chair: Contact?  Insofar as you may put any weighting on contact, there is a slight positive in that direction, on this particular process. 

Frances O’Grady: Let us hope so.

Chair: Thank you.  Can I thank you both for your contribution?  Questions, I hope, were robust.  This is an absolutely crucial issue and we are very anxious to really bring out the issues that have to be debated here.  Could I emphasise that there were a number of areas where further information would be useful.  In fact, you quoted from a speech, Frances.  We would like that evidence.  Similarly, we may look at our evidence and think, “We should have followed this up,” and we will write to you to ask for your comments on it.  We would be grateful for your response.  Thank you very much, both of you.

Examination of Witnesses

Witnesses: David Babbs, Executive Director, 38 Degrees, Polly Jones, Head of Campaigns and Policy, World Development Movement, gave evidence.

Q58   Chair: Good morning, and thank you for agreeing to address the Committee and answer our questions.  If you could, just introduce yourselves for voice transcription purposes, starting with you, David.

David Babbs: I am David Babbs.  I am Executive Director of 38 Degrees.

Polly Jones: I am Polly Jones, Head of Campaigns and Policy at the World Development Movement.

Q59   Chair: Thank you very much.  My first two questions are specifically to 38 Degrees.  First of all, David, can you explain how your organisation got involved in opposing TTIP?

David Babbs: Yes, certainly.  The way that 38 Degrees works is that our members guide what we campaign on and decide on our campaigns.  On a weekly basis, we poll a random sample of our members with a shortlist of campaign possibilities that has been generated from all the suggestions that have come into the organisation via Facebook, via emails and via self‑started campaigns that people have created on the Campaigns By You area of our website. 

We started off by seeing an unusual volume of correspondence from our members into the organisation asking us to campaign on TTIP.  We then included the question about TTIP in one of our weekly tracker polls.  To be honest, my personal expectation was it might be a slightly esoteric and technical subject, and I was not sure how well it would do, but it came in the top three.  We did that a couple of weeks in a row and we then emailed out to our membership more broadly with a yes or no poll saying, “This is the situation.  These are the reasons people seem to be saying it should be a 38 Degrees campaign,” and we got an overwhelming vote in favour.  Subsequently, because take‑up of those campaigns has been high, we have done more and more on it. 

Q60   Chair: That is interesting.  Do you examine any evidence before you decide to take a campaign up?

David Babbs: Yes, of course.  The staff team will look at the context in which those suggestions come in, but we are not a technocratic organisation; we are a democratic organisation.  We ask our members what they want to campaign on.  We believe that our members are the best people to be examining evidence and analysing things, rather than that to be something that is closed within a small office team.

Q61   Chair: What is the basis of your funding?

David Babbs: 38 Degrees is funded by small donations from our members.  The average donation is about £11.50.

Q62   Chair: Effectively your survival does depend on recruiting enough people to support a cause to run your business.

David Babbs: We definitely have a strong vested interest in serving our membership, yes.

Q63   Chair: This partly covers what I said before: do you buy in any expertise from outside or consult any experts?

David Babbs: Yes, of course.  As I am sure many of the members of the Committee will remember, there have been occasions when we have fundraised from our membership to hire in legal advice, say on the competition implications of the Health and Social Care Act.

Q64   Chair: Whose services did you buy in before you took up this campaign?

David Babbs: There is a wide range of civil society organisations that have an interest in TTIP and we have spoken to a wide range of them.

Q65   Chair: Just a minute: did you buy in any expertise on it?

David Babbs: In this case, most of the expertise that we needed to access has been available from publicly available studies—academic studies—or from the likes of the World Development Movement or the CBI.

Q66   Chair: Could you quote the experts who you have consulted?

David Babbs: Like I say, we have spoken to everyone from the World Development Movement to the TUC. 

Q67   Chair: Could you give us a definitive list of those people you have consulted?

David Babbs: It would be quite a long list.

Chair: I was just asking if you could do it, not whether it was a long list.

David Babbs: Yes, I am sure I could provide that for you.  I guess I would challenge slightly what I am inferring from—

Chair: You are not here to challenge.  You are here to be challenged.  Okay?  Let us understand the rules of it.

David Babbs: If you are suggesting that only experts have a right to—

Chair: Mr Babbs, we will not argue.  We will ask the questions and make a judgment on the answers. 

David Babbs: Suit yourself.

Q68   Rebecca Harris: To both of you, we know that there are estimates that TTIP could benefit the EU by about £100 billion, and obviously both your organisations dispute this.  What research have you either commissioned yourselves or relied on to challenge this assertion?

Polly Jones: We have looked in detail at a particular study that I really recommend called “ASSESS_TTIP”.  It is produced by the Austrian Foundation for Development Research.  There is also a similar analysis that has been produced by the academics you referred to earlier, Gabriel Siles-Brügge from the University of Manchester and his counterpart Ferdi De Ville from the University of Ghent.  Both studies look in a lot of detail at the combination of studies that have come up with the £100 billion figure, and they make similar points. 

For example, they make it very clear there are deep flaws with computer‑generated equilibrium models, which are used in this case.  Mainly they generate a high figure at the end of the process, but they make quite bold assumptions in doing that, one of those being that unemployment does not change and that markets clear without any hiccups.  It is a beautiful perfect world, which is not the one we live in.  They also have particular problems because of some costs that are not factored in. 

On unemployment and the impact on jobs, the studies also produce estimates about a dislocation of jobs somewhere between 400,000 or 1.3 million jobs, and there is no economic impact attached to that.  Obviously as a government, there would be economic costs both in terms of unemployment benefit in the meantime, how long it takes for someone’s dislocated job to be found again in another industry and also in loss of tax revenue because those people are not working.  There are some serious concerns about how those figures are generated.

Perhaps the most important point is that the £100 billion figure is the most optimistic scenario of a fully liberalised TTIP deal, which, and I am sure you have been following the negotiations, is looking quite unlikely.  It makes assumptions, for example that barriers on services and goods, non‑tariff barriers, would be liberalised by a further 25%, but on government procurement you might see a liberalisation of 50%.  To generate those top‑line figures, you have all of these assumptions, and it assumes also that you would be opening up public procurement by 50%, so the figures are best‑case scenario, very crude and also a delayed benefit.  You are not looking at bringing any of those benefits in until 2027.  They have been pulled around in different ways.  BIS, for example, has used it to say that a UK family will see a benefit of £400 a year, which would not be until 2027 and works out at about the cost of a packet of fish fingers a week.  It is not a lot for the best‑case scenario. 

David Babbs: Polly has given you a great summary of a lot of the key documents that we have also looked at.  There is also the stuff from the Austrian Foundation for Development Research and Tufts University in Massachusetts, as well as the Siles-Brügge stuff from Manchester.  I do not think 38 Degrees would claim to offer a definitive economic analysis of TTIP.  What our members are concerned about is that, as Polly said, what we are hearing from politicians who are campaigning in favour of the deal are some headline figures that take a wildly optimistic set of scenarios and bundle them together, and make a lot of assumptions about the way economies work that are not real‑world, like unemployment never going up.  There are many reasons to be sceptical of that account and to desire both more information and more say.

Q69   Rebecca Harris: What would be a more realistic assessment of the economic benefits to Europe of TTIP?

Polly Jones: We would need some studies to have a look at that.  Generating what the potential GDP would be in Europe if it combined its situation with the US is not my area of expertise.  Of these studies that I recommend, the “ASSESS_TTIP” one in particular does pull apart this in a lot of detail and contrasts it with accurate information now. 

Another useful starting point that comes alongside the £100 billion figure is what that means in terms of GDP growth, and what you are looking at is something like growth of between 0.03% and 0.13% a year.  Cumulatively that gives you the figure that is talked about for TTIP, which is between 0.3% and 1.3% growth, which is very small.  That is not a significant increase for our economies.

Q70   Rebecca Harris: In the context of how badly some European countries are doing at the moment, that probably looks quite attractive.  You do not dispute there will be economic benefits though, do you?  Neither of you dispute there will be economic benefits.  Is it just that you are suggesting the benefits are outweighed by what you perceive to be the disbenefits or the risks? 

David Babbs: For our members, there are questions about the scale of the benefits.  Like I say, we are being fed the most optimistic set of assessments of those benefits.  There are also questions about benefits to whom.  It is all very well talking about a headline figure in terms of a GDP increase, but how is that distributed?  Where does that go?  The experience of 38 Degrees members and most of the British population over the last few decades has not been that all economic growth is distributed evenly and benefits all people in the same way.  Additionally, what are the downsides?  Who are the losers?

Q71   Rebecca Harris: Is that an argument against economic growth though?  It is not, is it?

David Babbs: It is a reason to be sceptical of, on its own, an argument that is simply based on GDP trumping all other arguments.  If there are concerns about the threats that such a deal could pose to our public services and to the National Health Service, most people would not see that as a particularly good negotiating argument: “We’ll get a little bit of GDP, but we’ll sacrifice a really treasured public service.”  They are then also entitled to ask who that GDP growth goes to.

Q72   Chair: Could you just explain the benefits to lower‑paid people of no economic growth?

David Babbs: I am not seeking to make an argument against economic growth.  I am saying that it is a legitimate question for people to ask, if they are presented with something and told they should be in favour of it because of an impact on GDP, whether that GDP growth is something that they will see.

Q73   Chair: I think you will find that all economic history demonstrates that lower‑income people will never benefit from a situation without economic growth.  It may not be that the benefits of that economic growth are distributed evenly, and there is an argument for adopting policies that do so.  Indeed, a number of us espouse those arguments, but there is no argument for having no economic growth.

David Babbs: I have not sought to advance that argument.

Chair: Forgive me; that is the impression that you were creating. 

Q74   Caroline Dinenage: I get what you are saying.  You are basically saying that there is a potential for economic growth there, but it may be outweighed by any potential threats to what you are describing as the privatisation of our NHS or other public services.  Is that right?  You are looking at the balance.

David Babbs: I am saying two things.  Firstly, that, but I think most 38 Degrees members have told me that they consider the loss of sovereignty implicit in the ISDS mechanism or the loss of a cherished public service, in the case of risks to the NHS, as being things that they do not really see as negotiable.  Secondly, there is a legitimate question to ask, when we are having a conversation about economic benefits, about whether these benefits are going to be spread evenly or if this is a deal that is going to benefit a few people to a significant degree.  Are a few very rich people going to get richer?

Q75   Caroline Dinenage: We have just sat here, and I am sure you were sat behind, for the last hour and a half being told time and time again by the trade union and by the CBI that nobody knows.  There is no real concrete evidence.  You can quote this Austrian stuff, but nobody really has any definitive answers to these questions.  I was asking them things time and time again, but they kept coming back to me saying, “Well, we don’t really know.”  Do you not think it is wholly irresponsible to be encouraging your readers, your membership, to be lobbying their MPs to pull out of this agreement based on an entirely preconceived idea that this is a bad thing for the UK, when you do not know?  The trade unions do not know.  The CBI does not know.  Given the fact that you have not consulted any experts, where is this arrogance coming from that you presume that you know better than anybody else?

David Babbs: It is equally wholly irresponsible for David Cameron to be saying that it is a wholly good thing and that he wants to put rocket boosters under it.

Caroline Dinenage: That is not the question.  Answer the question.

David Babbs: No, I am answering the question. 

Caroline Dinenage: Do it quicker.

David Babbs: Your question was: how do we deign to get involved in the process without having seen all the documents?

Q76   Caroline Dinenage: Your viewpoint is very definitive.  My constituents have contacted me based on what you are telling them about how their NHS is going to be privatised by this hideous trade deal.  I want you to explain to me, so that I can explain to my constituents, what information it is that you have that no one else is party to, and that the TUC and the CBI both completely disclaim any knowledge of, that makes you so knowledgeable about this.

David Babbs: What the TUC and what the CBI were doing, in different ways, were expressing concerns based on what we know of other trade deals, what we have heard and what has been asserted by the Commission about what is contained in this deal, which is exactly what our members are doing.  We have raised significant concerns about how murky this process is.  We have also raised concerns about the implications of ISDS based on how ISDS is applied in other cases.  If you are saying that it is a problem that this deal is not more transparent and that that means that everyone who is having a conversation about it is having a conversation based on imperfect information, then I totally agree with you.  That is why we think it should be more transparent. 

Q77   Rebecca Harris: Can I just clarify one thing that you have said?  You said you took up your position based on what your members told you that they were concerned about.  Can we just clarify that this is what your members told you, not what you told your members about this?

David Babbs: The way 38 Degrees decides what it campaigns on is by asking our members what they want us to do.

Chair: So just recycling opinions?

David Babbs: Look, ultimately at the heart of this is a question of trust.  When we ask our members—and indeed we commissioned YouGov to do a survey of the general public—whether they trust politicians to deliver a deal that protects the NHS and acts in their interests on the basis of a process that is entirely behind closed doors, many more say no than say yes to that question.  If you want a process that commands trust, you need a far greater degree of transparency than we have now.

Chair: We know how you ask your question can arrive at a reply.  I know Robin has to go in a moment, so I want to give him a chance to come in.

Q78   Mr Walker: I have a group of students coming in from Worcester University, who I am meeting with in about five minutes, so apologies, as I will have to ask my question and then disappear shortly afterwards.  To pick up this point about trust, an online Buzzfeed article that directs people to 38 Degrees’ campaigns contains a number of so‑called facts about TTIP, which includes the lines “goodbye NHS, hello permanent privatisation” and “imagine a world where the profits of healthcare companies decide how we help the sick and elderly”.  Do you think TTIP is definitely going to deliver that world and that image?

David Babbs: I do not know if you are familiar with the way Buzzfeed works.  Anyone can create a Buzzfeed article.  It is not something that 38 Degrees produces.  I have not seen that piece, so I cannot comment on it.  What we are expressing are concerns based on what we do know about a murky process.  I am not going to say anything definitive about what TTIP necessarily will definitely do, because it is impossible to do so.  That is part of the problem. 

Q79   Mr Walker: In terms of the information that you have shared with your members, have you shared for instance the letter that the European Commission sent to John Healey, who is not exactly a die‑hard Tory the last time I checked, in which it would said very clearly that there would be no impact from TTIP on the NHS and the way that it is treated by the UK? 

David Babbs: Yes, we have shared that.  That is on our website together with a critique of how much that operates in private.  Look, politicians cannot have it both ways.  You cannot both say it will not affect the NHS and refuse to explicitly remove it from the NHS.  It just does not make sense. 

Q80   Mr Walker: I am no great fan of the European Commission personally, but there have been repeated assertions from European Commissioners stating that we have very clearly the power to opt out of any effect on the NHS, because it is a public service and we have a final say over this.  That does not seem to feature in the letters that I am receiving from constituents on 38 Degrees’ campaigns.  They do not seem to show any recognition of that position.  Is that something where you are comfortable that you are fully informing your members?

David Babbs: Look, I come back to this trust point.  If you think that, by just seeking to dismiss the views of people who are contacting you by saying, “Oh, you can’t know enough; you’re not an expert,” that is not going to in any way address this gulf.  We survey the public and ask them how much they trust their MPs, and four out of 10 say they do not trust their MPs. 

Q81   Mr Walker: The great power the public has with their MPs is they can get rid of them.  The public choose their MPs by a process called democracy.  Where you have an organisation that is campaigning and marketing online, and pushing a particular point of view, ignoring large amounts of the facts, that is a problem, I think.  It is a problem in terms of trust, because there is no accountability there.

David Babbs: It is 38 Degrees’ fault that the public does not trust MPs.  Is that what you are saying?

Q82   Mr Walker: No.  There is a difference in terms of accountability.  At the end of the day, MPs have to go to their electorate and get re‑elected.  What you appear to be doing in the NHS campaign is a process of aggressive assertion to try to make the facts fit your argument.  That concerns me when there is substantial evidence from neutral parties here, and indeed the interested parties, people like John Healey of the Labour Party, who is writing to the Commission to say these are real concerns that we have about a threat to the NHS, and then publicly coming out and saying he was reassured by their response.  Do you not feel that, in terms of informing your members, you have a responsibility to make them fully aware of those facts and to balance the arguments when it comes to the NHS and TTIP?

Polly Jones: I would like to say something about that letter at some point, though I do not know if you want to reply first.

David Babbs: You are here as well.  Clearly they want to have a go at 38 Degrees, but we should talk about TTIP.

Polly Jones: There is some ambiguity in the correspondence between John Healey and Ignacio Garcia Bercero.  It is quite true that, as we understand it, TTIP will not place new obligations on every EU government with respect to its health service.  What is not clear is that, should a government choose to repeal the Health and Social Care Act or bring part of that public health service or the privatised health service back in-house, there would not be a cost associated.  That is what is different.  It is quite clear that governments can choose what they want to do; they can choose which services they commit for further liberalisation under TTIP or not, but there is also a cost involved in that should they commit it, and it is then covered by ISDS rules.

Q83   Mr Walker: To quote from the letter that you mentioned from Mr Bercero, “If a future UK Government, or a public body to which power has been devolved, were to reverse decisions taken under a previous Government, for example by discontinuing services provided by a foreign operator, it would be entirely at liberty to do so.  However, it would have to respect applicable UK law,” so that makes no difference to the current situation.

Polly Jones: It is at liberty to do it, and you are right it would be applicable to UK law, but there could be a cost associated if ISDS, as we have seen formulated in CETA and is talked about in terms of TTIP, was part of it.  There could be a cost to that change.

Chair: It is all opinion.

Polly Jones: It is, because it is not a done deal.

Chair: It is not an assertion.

Polly Jones: Yes, but we would expect that to be the case, and ISDS would allow companies to seek that.

Chair: That is opinion, not a fact.

Polly Jones: It is an opinion, yes.

Q84   Mr Walker: You mentioned the Garcia Bercero letter, and I accept that.  Also, there is a more recent letter that has been published by an MEP Ian Duncan from a Mr Demarty from the European Commission, who states that “the net effect of the EU’s approach is that nothing in TTIP will lead to privatisation of the NHS”.  Is that something that you will be publicising on the 38 Degrees website, in terms of reassuring your concerned members?

David Babbs: 10 years ago, Tony Blair asked us to trust him on the basis of a document that he had read and we had not read. 

Mr Walker: Some of us never did.

David Babbs: We saw where that ended up.  Now we are experiencing politicians asking us to trust them on the basis of a document that they have not read either.

Chair: David, could you answer the question rather than indulging in political point‑scoring?  There is a range of opinions about Tony Blair; I do not think they are very relevant to the arguments that we are having here.

David Babbs: They are, because we are having a conversation about what level of trust the public should have in documents that they have not seen.

Chair: I am sorry, but we will make our assertions.  Will you answer the question that has been proposed to you?

Q85   Mr Walker: I am talking about documents that the public have seen.  I am talking about letters that have been publicised and made clear, which contain very clear assertions about the approach that people who are involved in this negotiation are talking, letters that go on to say that “the EU will make transparency the default mode for ISDS tribunals … There will be no secret tribunals under TTIP”.  Those are things that surely should be relevant information to inform people who are concerned about those issues.

David Babbs: A lot of that information is available on the 38 Degrees website and 38 Degrees members have read a lot of that information.  In the survey that we conducted, which over 40,000 38 Degrees members took the trouble to take part in, which I hope you will ask me about at some point during this evidence—because that is what I thought I was coming here to talk about—it is very clear that they are extremely informed about TTIP, have read many of these documents and have drawn different conclusions from you.

Mr Walker: These are not my conclusions.  These are conclusions that were drawn by the EU Commission in its letter to an accountable representative in the European Parliament.  It is not a conclusion that I am drawing at all.  It is merely quoting from the letters that they have sent about the negotiations in which they are involved. 

Chair: I realise you need to get on.  Paul, you have been waiting patiently for your question.

Q86   Paul Blomfield: Yes, I wanted to come in on a follow‑up to Rebecca’s question.  I would say that the reason we are having this evidence session is that we are interested in exploring the concerns that have been expressed by you, by constituents and by many organisations about TTIP.  I want to press that a little bit further.  When Frances was giving her evidence from the TUC earlier, she identified some of the problem areas that the TUC saw.  That is within the context of written evidence that they gave to us, which said, “The TUC regards TTIP as providing an opportunity for improving labour standards, and creating more jobs and prosperity in the UK,” notwithstanding the caveats and specific concerns.  Would you agree with that statement?

David Babbs: We asked 38 Degrees members what they thought about the benefits of TTIP, and they are certainly not hostile to the idea of any agreements between the UK, the EU and the US.  I do not think many 38 Degrees members would be particularly hostile to the idea of not paying whatever it was—a £12 tariff on a pair of US jeans.  The kinds of things that they are saying are that, for example, “It may help businesses, but there must be proper regulation so that normal people benefit from this business and not find their services and rights eroded in favour of the profit of business owners.  It could open up and relax some of the historic negatives in our trade with the US, but it must not interfere with our right to govern ourselves and determine the UK’s control on ethics or how we run the NHS.”

Q87   Paul Blomfield: I think you will see that those sorts of concerns were reflected in some of our questions earlier.  I just wanted to be clear that you are not opposed to a EU‑US trade agreement as such, if the concerns around the ISDS provisions and public services, for example, could be addressed.

David Babbs: It is fair to say that there is a very large gap between the kind of trade deal that 38 Degrees members would like to see and the proposed trade deal, as far as we can tell, and certainly a very large gap between the process we would like to see and the process that we have.  38 Degrees members have a lot of objections to those things.  That is not because they are little Englanders who do not believe that Britain should trade at all with any other country.

Polly Jones: In answer to your question about whether TTIP can improve labour standards, there is not a huge amount of evidence to show that free trade deals do improve labour standards.

Q88   Paul Blomfield: That was not my question, Polly.  My question was whether you agreed with the statement from the TUC that TTIP provided an opportunity for improving labour standards and creating more jobs and prosperity.

Polly Jones: No, because there is no evidence to show that.  I would be interested to look at when the date of the evidence was, because the TUC’s position has changed over a few months, and many individual union members of the TUC have expressed concerns about whether TTIP would support labour standards.

Q89   Paul Blomfield: David said that, from 38 Degrees’ point of view, they are not opposed to an EU‑US trade agreement as such.  It is a question of the shape of the agreement.  Is that your position too?

Polly Jones: Yes.  For us, we really understand the role of economic growth, particularly for countries in the global south, and how that can help you build public services and provide jobs for the poorest people.  Absolutely, there is a role for that.  We are very involved with a group of organisations across Europe to try to articulate an alternative trade mandate—what trade could look like if it respected labour standards, human rights and really put working people at the heart of trade agreements, in terms of recouping the benefits.  Absolutely we see the benefit of that.  Why we are concerned about this is that, in so many ways, the evidence does not stack up to demonstrate why this is a good deal.  There are so many questions about what the implications could be that it makes it very difficult, at this point, to say this deal is a good one, because there are so many serious concerns about it.

Q90   Chair: Just before I move on to Nadhim, I have a question first for you, Polly, then for you, David.  What you have just said, to my mind, does not square with what is in your campaign briefing on TTIP.  I point to a paragraph under “Why TTIP?”  I am reading: “The WTO used to be the primary focus of these efforts.”  That is, negotiations for free trade.  “However, thanks in part to successful campaigning and resistance by activists worldwide, the WTO’s Doha development round has stalled since its inception in 2001.”  That to me conveys an opposition to multilateral trade agreements, rather than just an opposition to the bilateral trade agreements that we have got here and does not seem to sit comfortably with the sorts of assertions you were making just now.

Polly Jones: Maybe I can clarify that.

Chair: I think you need to.

Polly Jones: Yes, we would support multilateral trade talks.  One of many concerns about the process for TTIP is it almost seems, given the timing, that as a result of talks stalling at the WTO, just like it says here, countries have sought to pursue a particular agenda, a neoliberal agenda, in other agreements, for example through TTIP.  The Doha development round—and over the years we have done a lot of analysis and research about this—was called the Doha development round, but we did not feel it put the interests of developing countries at its heart.  Many developing countries were extremely critical of the Doha development round, so that paragraph also relates to an ongoing critique we have had of the Doha development round and the fact it was not benefiting poor countries.

Q91   Chair: At the end of the day, you are taking the same position as you are on TTIP in anticipating an outcome and campaigning against it before it has the, shall we say, opportunity to be judged objectively.

Polly Jones: I completely take your point.  If we look at the process for negotiating TTIP, and at what stage you as members of Parliament and MEPs will see the deal, for the UK Parliament, you will only see the deal once the text has been completed.  There is no opportunity to amend it; at that stage, you accept it or you reject it.  The window of opportunity for shaping the deal is this space now, which is exactly why it is so crucial to find out what is being negotiated and what the content of the text is.  Of course it is speculative.  We do not know what it will be but, because of the nature of how trade negotiations are negotiated, if you preserve judgment until the end, it can be too late to change it. 

Q92   Chair: All or nothing.  The trouble is your argument would have more credibility if you were campaigning just on this issue, rather than against the process as a whole.  Can I just come to you now, David?  Can I just say, earlier, you dismissed the Buzzfeed article as in effect not being produced by 38 Degrees? 

David Babbs: I did not dismiss it; I said I had not seen it.

Q93   Chair: You had not seen it.  It has your logo on it and it is called “10 Ways a Four‑Letter Word Can Ruin Your Life”.  Was 38 Degrees the author of this?

David Babbs: It is quite possible a 38 Degrees member was the author of it.  There are a couple of million of us.  What I am saying is that Buzzfeed is social media; anyone can put stuff up.  That is how it works. 

Chair: You basically campaign on the basis of anybody putting anything up, because that is how it works.

David Babbs: No.  Buzzfeed is like Facebook or Twitter.  Different people can put stuff up.  I cannot defend the whole of Buzzfeed.  It is like asking me to have a view on the whole of the internet. 

Q94   Chair: If it has your logo on it, then it is quite reasonable that anybody reading that assumes that it has the 38 Degrees stamp of approval.

David Babbs: You can download our logo off our website.  We are talking at cross‑purposes because—

Chair: No, we are not.  Here we have an article that has your logo on it.  I would be very concerned if anybody sent out a letter that had my heading on it including views that were contrary to my personal views.  You do not seem to think it is anything to do with you.

David Babbs: I have not seen the article you are referring to.  The way that Buzzfeed works is that different people can create things and can share them around.  It is a social media site.  Whether this particular article is accurate or not, whether or not I am happy that the 38 Degrees logo is on it or not, I honestly do not know because I have not seen it.  What I am saying is that that is just the way the internet works.  It is different from you sending a letter by the Royal Mail.

Q95   Chair: Could I put it to you that it is perfectly reasonable for a reputable organisation to convey to people that they cannot use its logo without ratifying it with you beforehand?  Will you do that?

David Babbs: I will definitely look at the article.  I think you are describing a way that it used to be possible for organisations to work before the internet existed.  Anyone can upload something.  I have no idea whether that article has been seen by 10 people or 10,000 people or 10 million people.  How proactive I would be in seeking to correct any association would depend on the status of it. 

Q96   Chair: You are saying that, because of technological changes in the communication industry, that eliminates any responsibility that you have for views going out in your name.

David Babbs: I am just not sure.  I have not seen that article.  I am not sure of it is putting views out in my name.

Q97   Chair: Could I suggest you do so?

David Babbs: Of course I will.

Q98   Chair: I also ask you if you could write to us to tell us what, if anything, you do about it.

David Babbs: Okay, but the broader question here is how people are communicating and finding information about TTIP.

Q99   Chair: With respect, I am not debating broader questions on the technology of communication.  I am asking you about your responsibility for communicating views that I think most reasonable people would say are highly simplistic and perhaps would even be embarrassing to a redtop.

David Babbs: As I say, we have surveyed over 40,000 38 Degrees members.

Chair: I think we have heard that.

David Babbs: It seems to me that the assumption is that this is too complicated for the public to understand.

Chair: No.  We are talking about you perpetuating views that have not been adequately researched.  It is reasonable to expect, if you are campaigning, to have it embedded in some sort of legitimacy.  Comments like that, I think most people would agree, do not. 

David Babbs: Comments like what?

Chair: Like “10 ways a four‑letter word could ruin your life”.

Q100   Paul Blomfield: I wanted to ask some questions about the issue of the threat to public services, which you will appreciate many of us share.  We are at the same starting point.  I just wondered if you could reflect a little more on how real you think the risk is that TTIP will open up public services in the way that is sometimes presented.  For example, some constituents will come to me and say, “Look, TTIP is the greatest threat we have ever seen to the NHS.”  I just wonder whether you do not think that that narrative, which has been developing through the campaign, is letting domestic governments off the hook, because we are seeing the privatisation of the NHS now, without TTIP.  There is a danger that the campaign is focusing in the wrong direction.  The real decisions about whether the NHS is privatised or not are made by domestic governments.

David Babbs: 38 Degrees members probably have different views about what the greatest threat to the NHS is, and are concerned about several different threats.  One of the things that 38 Degrees members talk to me a lot about is the concern about the way that TTIP will interact with other threats to the NHS, so this sense of a ratchet effect.  One of the things that TTIP could do is make it much more difficult for a future government to reverse the process of privatisation, because of ISDS and a fear that, by opening up the NHS to competition and greater involvement from the US health industry, it would be much harder to extricate yourself from the privatisation that is happening at the moment.  I do not think 38 Degrees members necessarily draw a binary distinction between whether TTIP is the greatest threat or the Health and Social Care Act is the greatest threat.  They see a worrying interplay between the two.

Q101   Paul Blomfield: I guess I was asking the question, David, because you are right: 38 Degrees members will have a wide range of views.  It is a question of the way those views are presented by you to them, and whether, in an understandable concern from your point of view to motivate people to be involved in the campaign, there is an over‑simplification of the arguments.  Are you hitting the wrong target and it is the policies of domestic governments that should be a focus?  Really all these arguments are a little bit more nuanced and complicated than is suggested by some of the material that is produced on them.

David Babbs: There is always more detail behind headline arguments, is there not?  For all the stick that 38 Degrees gets for making campaigns accessible to large numbers of people, we are one of the few organisations I am aware of that sends out emails with footnotes, which often contain links to a lot of those more detailed sources.  We find that a lot of our members spend a lot of time reading and engaging with them very thoughtfully.  That is certainly what I have seen in the responses I have had to the request for input from 38 Degrees members to help me prepare to come here. 

38 Degrees members feel that TTIP is a threat to the NHS; other domestic policies are a threat to the NHS, and they wish to campaign on both.  I would not share your concern that one is a distraction from the other, because I am seeing a lot of thoughtful, highly articulate, highly engaged activity from 38 Degrees members, both on the worrying potential implications of TTIP and the worrying actual implications right now of incremental privatisation of the NHS on the ground. 

For example, a group of 38 Degrees members in Chichester is right now very actively campaigning about TTIP and going to see their MEPs to discuss TTIP, but they are also challenging a proposal by the local clinical commissioning group to privatise orthopaedic services in their area.  They are not doing one or the other; they are doing both, because both matter to them.  They do not want to see either. 

Polly Jones: One of the most helpful ways I found to understand the relationship between the TTIP negotiations and nation state governments is to think of the TTIP negotiations, which are quite clearly set out at the beginning to be about increased liberalisation—so that is absolutely clear around the table—as an enabler.  They are not committing every government to doing something.  It is up to each nation state government to decide which services and how it wants to commit to the liberalisation process through TTIP.  In that sense, it absolutely is down to the coalition Government at the moment about what goods and services it applies the TTIP rules to.  TTIP is only managed by the negotiators and the governments around the table; it is not some kind of ghostly hand operating on its own. 

It is really useful to see it as an enabler, but it is absolutely clear that public services are at risk of increased liberalisation through TTIP and there a number of reasons why we are concerned about that.  One is it is not even clear what a public service is.  The definition that has been used is very old‑fashioned, used in trade texts in 1994 that came out through the General Agreement on Trade and Services negotiations.  For example, and I am sure you have looked at this already, it describes public services as services supplied in the exercise of government authority, not on a commercial basis and not in competition with any other service supplier.  We can look at all kinds of services in the UK, including the NHS, and that definition does not seem to apply anymore.  There is also a definition about public utilities.  It is really unclear how these two definitions sit together and what is included. 

Frances O’Grady mentioned earlier some particular cases in the UK where it is unclear whether they are public services and therefore whether they would be excluded or not, even if we had an exclusion for public services.  One of those would be further education, which was recently reclassified as not part of the public sector, even though it is something that we might think of as part of the public sector.  Therefore, you would expect it to be covered by TTIP rules and not protected with a public services exclusion.  The interesting thing for further education is that the basis on which it was reclassified is that it gets public funding but there is no public control.  You could also look at a number of other services in the education sector, for example academy chains, that may also get public funding but do not have public control.  They also, even under a clear public services definition, would not be excluded if public services were excluded. 

Q102   Chair: Is that not an argument for including them, rather than against TTIP as a principle, or the process of TTIP?

Polly Jones: I think it is an argument for being absolutely clear what is part of the deal and what is not.  As you develop your evidence and inquiry, that will be a very useful part.

Q103   Nadhim Zahawi: David, you distanced yourself from that Buzzfeed article when you were asked about it.  I think it is slightly unfair to the Committee to try to characterise us as not understanding social networks or the internet.  Presumably you must have some control of your logo or can anyone just download your logo? 

David Babbs: Anyone can download any jpeg off the internet and place it on something.

Nadhim Zahawi: You can take action against that.

David Babbs: We can, but you make choices as to whether you do.  People are continually sharing all kinds of content on the internet.  There are things on the internet that you have not seen that you have not taken action on. 

Q104   Nadhim Zahawi: You are in a position of responsibility.  You have 2 million members.  You are able to interpret their views to us, to the media and all over the place.  You have a responsibility.  Since you have distanced yourself from that highlighting a number of facts about TTIP, “Goodbye NHS, hello permanent privatisation”.

David Babbs: All I would say is‑

Nadhim Zahawi: Let me just finish my question. 

Chair: You will be given a chance to answer. 

Nadhim Zahawi: If in this forum you have distanced yourself, surely, if somebody has downloaded your logo and stuck it on that particular article, you would act to do the same by distancing yourself, because your logo can be taken off a social network.  You can request, “Why are you including our logo on this?  We do not share your views on this.”  Is that true?

David Babbs: That is perfectly true.

Nadhim Zahawi: That is all I was asking.

David Babbs: What I was trying to explain to Adrian is the fact that the presence of a logo on something does not imply authorship.

Q105   Nadhim Zahawi: It does.  That is not fair.  The presence of a logo, online or offline, does give legitimacy to that piece of work.  That is why you are able to remove your logo.  That is why you have those protections so you can ask for that to be removed and, if they do not, you can act on it.  There is no difference between the old world and new world in that sense.  It was unfair to characterise it as that; that is all I am saying. 

David Babbs: I think there is, in the sense that large amounts of content are created on social media.  I do not think even the most litigious corporation would act against every use of its logo.

Q106   Nadhim Zahawi: That is a different question about policing and how you conduct your organisation.  You can take the view that you do not bother; you are okay with your logo going anywhere.  That is something that you decide as an organisation.  That is up to you and I understand that but, since you have distanced yourself from it in this forum, surely, the logic applies that you would do the same online.  That is my point, which you have agreed to.

David Babbs: I will look at it.

Q107   Nadhim Zahawi: Let me ask a question, really to Polly and David: on the EU‑Canada trade deal, did you campaign?  At 38 Degrees were you against it or for it?  Which way did you go on it?

David Babbs: That was not a campaign that 38 Degrees members asked us to run.

Nadhim Zahawi: There was no campaigning against it.

David Babbs: Now, because we have become part of the Europe‑wide self‑organised Citizens’ Initiative around TTIP that also has within its scope CETA, so that is now something that tangentially we have links to a campaign on, because of that.  Other than that, we were not at an earlier stage asked to campaign on CETA by 38 Degrees members.

Polly Jones: Similarly, we are working on it now and we were not before.  The interesting bit is—and I guess what made a difference—you can guess from our name, the World Development Movement: our focus is on the impact in the south.  What really drew our attention to TTIP were the announcing statements, which said, “We hope this deal will be a blueprint for all future trade anywhere in the world”.  That is where we therefore felt we needed to start analysing it. 

Q108   Nadhim Zahawi: Fair enough, but on the EU‑Canada thing you did not campaign against it.

Polly Jones: No.

Q109   Nadhim Zahawi: ISDS is obviously not unique to TTIP.  Do you have any examples of where it has been used by foreign companies in other trade or investment agreements?

Polly Jones: Yes, how many would you like?

Nadhim Zahawi: One or two.

Polly Jones: We have lots and lots.  Some of the key ones that you will have heard about would be, in 2012, a Swedish company, Vattenfall, sued the German Government for a change in policy direction in terms of its funding for nuclear power.  They were seeking €3.7 billion in compensation.  Another key one is from the North American Free Trade Agreement, which I hope we might get a chance to talk about a little bit more later, between the US, Canada and Mexico, where a US company, Lone Pine Resources, asked for $250 million in compensation because the Canadian province of Quebec had put a moratorium on fracking and this was an area in which they wanted to operate.  There is another well known case about the French company, Veolia.  It was suing the Egyptian Government for wanting to raise the minimum wage.  That was in 2011.  There are several well documented cases.

Q110   Nadhim Zahawi: How many have been activated by companies against the UK Government?

Polly Jones: I do not know for definite.  I do not know how many have been activated against us.  I have certainly heard BIS civil servants talking quite clearly about how we have not lost cases in the UK, which is obviously a good thing, particularly on public policy decisions, but there are lots of examples of other places where governments have lost public policy decisions, the notable one being the one mentioned before about plain cigarette packaging.

Nadhim Zahawi: You do not know how many have been activated against the British Government.

Polly Jones: No.

Nadhim Zahawi: David, do you know how many have been activated against the British Government?

David Babbs: Polly has given most of the examples that I would offer.  I do not have an example of the British Government having been sued in this way.  I think it is reasonable to have concerns about ISDS in this case.

Nadhim Zahawi: My question is whether you know how many have been activated against the British Government and your answer is no, you do not.

Polly Jones: I have some EU‑wide figures, but not for the UK specifically.

Q111   Nadhim Zahawi: Polly, you cite the example of Philip Morris’s action against the Australian Government in respect of the plain packaging.  Is that legal challenge ongoing?

Polly Jones: Yes, I think it is.  It is particularly interesting because of how Philip Morris was using a free trade agreement between Australia and Hong Kong, and therefore set up a subsidiary in Hong Kong so it could pursue the case with the Australian Government.  It tells you something quite concerning about how the investor‑state rules can be used in some of these deals. 

Q112   Mr Bain: We know that politics is changing a lot.  We are seeing big numbers of grassroots campaigns.  There is a sort of expectation on behalf of those taking part in those campaigns that they are kept up to date on how developments in particular issues are happening.  One of the problems or downsides about any negotiation is you have to keep at least some of the cards close to your chest, so what practical ideas would both of you have to try, as you have talked about, to make the process of this negotiation more transparent?  How could it be done in a way that gives people some information but does not compromise the ability of those negotiating any deal to do their job as well?

David Babbs: A presumption of secrecy should be replaced by a presumption of transparency.  I am not sure the evidence is overwhelming that the best outcome from negotiations, for either party or for both parties, is always a result of secret negotiations.  The situation that 38 Degrees members are experiencing at the moment is that they are going to see, for example, their Members of the European Parliament, many of whom are telling them that they are looking forward to voting for TTIP because it will be an excellent deal.  They are being told that by someone who is barred from seeing any of the negotiating text.  You have this data room somewhere in Brussels that MEPs even are not allowed in to see.  I suspect none of you would be allowed into that room either.  Those who are allowed in are searched at the door to check they do not have a phone with them.

Q113   Chair: Can I just interrupt?  You said they are barred from seeing.  As of this moment that assertion is correct.  However, it also should be mentioned that the new Commissioner has indicated that they are likely to announce those texts.

David Babbs: There is an example of a concrete thing that is a step in the right direction.  You alluded to the way that politics is changing.  Those of you who are involved in these negotiations or in the scrutiny of these negotiations need to recognise that at the moment we are definitely not living in that era where the public is willing to just take people’s word for it that something is a good thing.  My suspicion would be that that is gone for good, probably through a combination of broader cultural and technological changes and particular actions by particular politicians, some of which I mentioned earlier, like the experience of what happened with Iraq. 

Now, in that context, if you want to engage in a trade negotiation that commands public trust, which is not going to excite huge amounts of suspicion, you need to find a way of doing that transparently.  Our members have concerns.  It is perfectly factually correct for you to characterise those concerns as imperfectly informed and based on assertions, just like everyone else’s verdicts and concerns around those, because we have not seen the text.  If you are actually going to get to a position where we can have an informed debate around this and where the public can be won over to a deal that is genuinely in their interest, then a key part of that is that they are able to see what is going on.

Q114   Mr Bain: There are ways that we can try to get information out of Government on behalf of the public, through parliamentary questions and applying for debates.  You will be aware that there have been debates in the House of Commons on TTIP.  There is also now the procedure whereby, if 100,000 people sign a petition and ask for there to be a debate in Parliament, that happens as well.  What further steps do you think that this institution, the Government and also the European institutions might take to inform us better about how things are proceeding and also the public as well?

Polly Jones: I have quite a long list of things that would be good and I would be very happy to send them in writing.  Some of the things that are really important are publishing the negotiation positions and the requests and offers.  This is slightly different from the texts because, at the moment, for example, there are some texts around on some areas, but they are very small because the negotiations have not been complete, so they do not actually tell you what potentially is affected.  The negotiating positions are important, specifically looking at the consolidated draft texts, because that is where you see the combination of the negotiating positions from both parties.  They should be available to the European Parliament and national parliaments, as well as civil society and the public. 

It would be useful to have detailed agendas of the negotiations published as well, and reports on the rounds after.  There are some reports and press conferences, but there is not very much content in those. 

It would be helpful to publish a list of all the meetings that are taking place with the European Parliament and member states, and the dates that they are happening, who is involved and what they are looking at, to get a sense of who is interested and who is lobbying for it.  It would also expose groups like us.  We would obviously be included in that if we were lobbying as well.  It would be full transparency.  It would be useful to see the submissions by third parties, not all of which are in the public domain, about TTIP. 

It may sound like this is crazy that that is not how you do a negotiation, but there are some really well documented examples of where negotiations, even in trade agreements, take place with that kind of openness and transparency.  At the World Trade Organization, which we touched on before, which has been criticised by civil society and member states alike, many of their negotiating texts are published on a website and often they bracket text where it is not agreed, so you can be clear what the current state is.

Q115   Chair: Could I just interrupt you at that point?  That is a very interesting assertion that you have made.  Could you send us some examples?

Polly Jones: Yes, I will.  I will happily do that.

Q116   Mr Bain: Polly, do you want to continue on that point?

Polly Jones: I was going to carry on with some examples, so I can share them with you now or I can send them in. 

Chair: If you could just us a couple of examples, I would be grateful.

Polly Jones: Another one would be the United Nations Framework Convention on Climate Change.  Again, there were lots of very fraught negotiations, but those texts and the negotiating positions were published, with bracketed text where there was not agreement so that all sides could see what was going on.  The World Intellectual Property Organization again released their draft negotiating positions in the same way, again negotiating on very similar things to what we are talking about here.

Q117   Mr Bain: Have you put to the European Union or indeed to the Americans the possibility of having draft consolidated texts published when each round of the negotiation is completed?  Is that something that they have rejected out of hand?

Polly Jones: The World Development Movement has not put it to the US negotiators.  We would not see them, but we have made that point to representatives, BIS civil servants, representatives in the Department, electoral representatives, as well as many MPs.

Q118   Mr Bain: What was the response of officials within BIS?

Polly Jones: It was very similar to where you started: that that is not what you do in a trade agreement, because you have to keep your cards hidden.  It does not have to be that way; there are lots of examples that show you can do it differently. 

Q119   Mr Bain: That is interesting.  Would that be what your 2 million members would be expecting as minimum transparency levels in this process, David?

David Babbs: I think so.  One of the questions in the survey was we said to them that, this week, David Cameron said that people are sometimes signing up to the TTIP campaign without fully understanding every part of what they are being asked to sign.  The response back from our members was that that is inevitable because of this secrecy.  I could quote directly from what a few members have said about this.  “Cameron and the political system have made this inevitable by negotiating the TTIP in secret.  It is undemocratic and unaccountable, and is not congruent with modern Government.”  Another member has said on this, “TTIP is a very far‑reaching exercise.  We demand full transparency, full publicity about the proposed terms, so that a wide‑ranging public debate can be developed before any firm decisions are considered.”  There is huge appetite from our members to get into the detail on this and properly look into those concerns. 

As I think 38 Degrees members have been making clear to MPs, and as 38 Degrees has been making clear to our members, this is about concerns.  This is not a done deal yet.  That is why we are running our campaign, because the point at which we have the opportunity to try to influence this deal is the point at which we are not able to see it, which is a kind of absurd situation, really, is it not? 

Polly Jones: There is one thing that might be worth adding.  We saw a leaked letter—it is in the public domain and on the internet—as is everything, including your logo, from the EU chief negotiator to his counterpart in the US, from July 2013.  He confirmed that the European Commission would block public access to all documents related to the negotiation or development of TTIP, and that those documents will remain closed to the public for up to 30 years.  We would be very interested to understand what that means in this context or would suggest you might be interested, too.

David Babbs: It plays into some fears that the public legitimately has about the way that the European Union tends to work, with their paternalistic, aloof attitude, and the way that politics works more generally.  That is going to undermine trust, not build it. 

Q120   Chair: I would just intervene at that point.  I think the process was agreed by the member states, so to blame the EU en bloc is perhaps not totally accurate.  The national representatives agreed this process.  To a certain extent, I think we have probably covered this, but I just want to see if there is anything else to add to it: you have argued, and indeed we heard concerns by the previous panel, that TTIP would open floodgates to companies suing the UK for risking their profits.  We have covered this partly, but what do you think the UK should do to prevent this happening?  I will start with you, Polly. 

Polly Jones: A really important starting point is a study that BIS commissioned from the LSE, back in April 2013, called “The Costs and Benefits of an EU‑US Investment Protection Treaty”.  This study was extremely thorough but concluded that “an EU‑US investment treaty that does contain ISDS is likely to have few or no benefits to the UK, while having meaningful economic and political costs”.  My starting point would be why we need to include ISDS in the first place.  The study did a lot of investigation of EU and US firms, what kind of judicial protections they required in each other’s territories, and it was categoric that it felt they were completely covered by national jurisdictions.  There was no interest in it for them.

David Babbs: 98% of the 38 Degrees members who responded to my survey to prepare for me coming here said that they would like to see ISDS removed from the deal.

Q121   Chair: Could you send us copies of the survey?

David Babbs: Yes, sure.

Q122   Ann McKechin: Could I just be clear for the record, Chair, that I am a member of the World Development Movement?  We have talked about the investor dispute settlement.  Can I just clarify for the record that you accept that companies are entitled access to the legal processes in domestic courts to pursue actions?

Polly Jones: Yes.

Q123   Ann McKechin: If the treaty was ratified in such a way that corporations could actually challenge governments in their domestic courts that would be acceptable.

Polly Jones: That exists at the moment.

Ann McKechin: The CBI had some question about it in their evidence—that it would not specifically—but if the treaty was changed to such an extent, you would not have an objection to that basis.

Polly Jones: It depends on the detail.  What is particularly interesting in the LSE study that I quoted is that businesses do not think that they need any extra protections.  It would be worth investigating further what other particular additional protections the CBI thinks those companies would get through ISDS.  There are some particular ones.  We touched on it before, about the costs to governments that are defending claims.  Under ISDS, there are different rules about who bears those costs.

Q124   Ann McKechin: There were questions also raised about speed of process, which presumably is the Italian action.  We are not here for an analysis of Italy, but it is still always a very long time to get any legal action through.  You are not fundamentally against a legal process.  Some of the literature that has come out from campaigns in general has seemed to suggest we must stop corporations suing, but obviously this would not.  We have a major case at the moment of the Scottish Whisky Association against the Scottish Government on a public health policy proposal, so you are recognising there is a legitimate challenge.

Polly Jones: We are not asking to change the status quo. 

Q125   Ann McKechin: Could I also just clarify the Philip Morris action?  Is it your understanding that Australia is still maintaining its public health policy on plain packaging?  It has not suspended it pending this dispute being resolved.

Polly Jones: I am not entirely clear.  I can get back to you and let you know exactly the case.

Ann McKechin: It would be helpful for the record whether or not the Government actually suspended the policy during the course of this process, or not.

Polly Jones: We know that Australia has now tried to revoke any ISDS components of its trade agreements, along with many other countries around the world, on the back of that experience.

Q126   Nadhim Zahawi: Very briefly, have you seen any analysis of the impact on public finances of the removal of tariff revenue?

Polly Jones: Yes.  I can just share some with you.  There are some in the study that I referred to before, the “ASSESS_TTIP” study, and some other analysis that has done by the GMB union.  In the “ASSESS_TTIP” study, they talk about elimination of tariffs leading to a loss in public budgets of nearly $20 billion over 10 years, across the EU.  The GMB does a rougher calculation looking at what the HMRC would get in from US corporations operating here, which under full liberalisation of TTIP they would not have to pay anymore, which would be a net loss of £3.5 billion to the Exchequer a year.  They are the most comprehensive figures that I have seen.

Q127   Nadhim Zahawi: Finally from me, Chairman, are there any aspects of TTIP that either of you are in favour of?  Silence.

David Babbs: My silence is me trying to pull up the quotes, so that I am true to what our members say.

Polly Jones: For the World Development Movement it is less about what we are in favour of.  There are some things that we are ambivalent about; it is not of particular relevance to us.

Nadhim Zahawi: Is there anything you are in favour of?

Polly Jones: There are a lot of really interesting examples about how TTIP could help sort out the different regulations on car seatbelts and car headlamps.  It is often the case that you will have heard, “That sounds relatively sensible to me; the World Development Movement does not have a problem with that.”  The issue is not representative of the bulk of what seems to be in the negotiations.

Nadhim Zahawi: You are in favour of car seatbelts and car headlamps.

Polly Jones: Everyone wants to be safe and see where they are driving, yes.

David Babbs: One 38 Degrees member described it as “harmonisation of pointlessly variant standards in the car industry or health products, for example.  There is potential there.”  Overall, the way that 38 Degrees members would see those things, I think Frances O’Grady put it, is that they would like to see a levelling‑up rather than a levelling‑down in those areas.  As I said before, I do not think that the concerns of 38 Degrees members in particular or the public more generally are to do with a rejection of the principle of trade between nations.  It is about the parameters that that operates within, the protection offered for public services, the protection of the rule of law and the sovereignty of those nation states’ parliaments, which something like ISDS is seen as a threat to.

Nadhim Zahawi: You are not against trade agreements.  You are in favour of this TTIP thing for car headlamps and seatbelts. 

David Babbs: Those are examples.  I guess tariffs on jeans might well be another example of that—the kinds of things where there are clear potential upsides.  Are they a price worth paying for threatening public services?  Is the loss of national governments’ control over public policy for ISDS a price worth paying for those benefits?  Our members believe not. 

Nadhim Zahawi: You have made that point.  Just for the record, Chairman, I am, with John Healey, part of the all‑party group that is looking at TTIP.  I just wanted that noted.

Q128   Ann McKechin: John Healey does quote an independent study saying that exports of cars, not only just car seatbelts, could increase by 26%, so it is not insubstantial.  Polly, can I just play devil’s advocate for the moment?  WDM has for years been campaigning against protectionist tariffs operated by both the EU and the USA.  Could I perhaps put the argument that if they were actually to reduce or eliminate the tariffs between the two trading blocs, this actually would be indicative of a move that would help and assist eventually in reducing tariffs that they apply to other countries in the southern part of the globe?

Polly Jones: It is quite complicated.  It depends which product you are talking about, whether they have tariffs on them and what impact that has on particular economies in the south.  A study was done by DFID looking at the impact of TTIP on low‑income countries, which found particular impacts on a few countries because they are particular textile exporters or whatever.  We obviously have some concerns about that.  It may be that TTIP would remove tariffs in some areas, but that does not actually affect particular countries.

Q129   Ann McKechin: I am just saying that your general argument has, for years, been that the EU and the USA are far too protectionist in particular areas.  You mention agriculture; you mention clothing.  In manufacturing and engineering—sophisticated products—they have actually had very punitive barriers so that, actually, if they were going to start reducing those barriers, even if it were just with another equally prosperous trading bloc, that would be in the right direction, rather than regressing back to further protectionism.

Polly Jones: It may be.  The EU has a number of policies, like the “Everything but Arms” policy, which is there to help promote and encourage trade from low‑income countries.  It is unclear how TTIP and things like that inter‑relate, and that has not been researched thoroughly enough.  A more accurate representation of WDM’s position over the years has been, conversely, that we have argued that developing countries ought to have more policy space to determine and manage their own economies.  Some people might call that protectionist; I think that is a bit of a clumsy title, but that kind of policy space for countries to think, “Well, we really need to develop this part of our economy or this sector—”

Q130   Ann McKechin: I appreciate that, but what I am arguing is that you have never argued that the EU and US should be doing that.  It is just to say that, at the moment, it may be happening in a different way than you had originally hoped under WTO.  In effect, reduction of protectionism is generally something positive in terms of encouraging a more expansionist approach, rather than a protectionist approach.

Polly Jones: I do not think it always is.  In cases where developing countries are exporting to the EU, it is not a protectionist policy that helps them; it is a policy that encourages securing trade from them, which is different.

Q131   Rebecca Harris: I know that BIS has been doing TTIP roadshows.  Has either of your organisations attended those?

David Babbs: 38 Degrees members were not allowed into the one in Sheffield.  That I know.  We have had some engagement with BIS.  We were hoping to organise a public meeting with Vince Cable, which was slated for December, but he is now not available then.  We are hoping to do that in January, so that is a positive thing in which we will have some opportunity to engage.

Q132   Rebecca Harris: Am I wrong in thinking 38 Degrees was actually invited by BIS for a strategic roadshow?

David Babbs: No, our members were not allowed in.

Polly Jones: The roadshows are maybe something slightly different.  There have been roadshows running around the country aimed at businesses to find out about TTIP.  Some of our members too have been along to some ones that have happened in the local area, but there have been meetings that BIS has co‑ordinated for civil society organisations at their office around the corner that we have been to.

Rebecca Harris: You have been involved in that.

Polly Jones: Yes, we have been to those.

David Babbs: We have had a meeting with a special adviser at BIS to relay our concerns.  The thing we have been seeking is an opportunity for 38 Degrees members more generally to engage directly.  We have been told that that can happen in January, but we do not have a date yet.

Q133   Rebecca Harris: Have you found your exchanges with BIS helpful?  Have they been able to allay some of the concerns for your members or for your organisation?  Have you been able to put questions to them and get satisfactory answers?

David Babbs: I would say that is a work in progress.  There has been an encouraging shift from airing some of the views that have been aired in this Committee about the absence of proper expertise to be engaging in these issues to an apparent willingness to engage, most concretely through Vince Cable saying that he is willing to have a meeting with some of our members, but that meeting has not taken place yet and we do not yet have a date for it, but we are told it will happen in January.

Q134   Rebecca Harris: Have you found it difficult getting information you need to try to allay some of your members’ fears.  Is that what you are saying?

David Babbs: Yes.  I would say it has improved.  It has improved.

Q135   Rebecca Harris: When someone comes to a Member of Parliament with a concern, I would go to great lengths to find out and allay those fears for them, and come back to them.  I want to clarify whether just people come to you with concerns and you then just campaign on them, even if they erroneous or they could easily be resolved with a phone call.  You have kept coming to us saying you campaign on the concerns of your members, and you are strong about that.  You almost sound like you feel you represent your membership more than MPs democratically represent their constituents, so I want to try to clarify to what extent you have tried to allay those concerns or simply campaigned on them, and then if there have been any obstacles if you have been trying to allay those concerns or get the answers.

David Babbs: What I see my role as, and the role of 38 Degrees staff as being, is to empower and enable our members to seek that information and engage directly with decision‑makers, rather than that being unduly mediated by us.  What we have sought to do is enable our members to get in touch with decision‑makers with their concerns to then get responses.  That has included contacting BIS, seeking opportunities for our membership to directly engage with BIS on this, including those roadshows which, as I mentioned, we found were targeted at business and we were not really welcome at them.  As is now happening, we are engaging with BIS around some direct meetings with Vince Cable, which is great.

Q136   Rebecca Harris: I am interested in this enabling role you have.  Do people find it difficult to get in touch with Ministers or their Members of Parliament without coming through you, in your experience?  Do people report that they have difficulty getting in touch with their Members of Parliament without coming through you?  Do they not have a response unless they write your standard letter on the subject, putting out their concerns for them, in your words?

David Babbs: When we ask 38 Degrees members about getting involved in the political process, we get positive feedback about the role that 38 Degrees can play in making it easier for people to get involved and an increased sense that they will have agency through getting involved, because they are working with others in their area and they know that they are part of a campaign that brings together lots of people.  We definitely do hear from lots of our members that they are in touch with decision‑makers, be they MEPs, MPs or councillors who they were not previously in touch with, as a consequence of their participation in 38 Degrees.

Q137   Rebecca Harris: No one reports that they have had a lack of access to their MPs without coming through your website.

David Babbs: MPs have a mixed record on engaging with their constituents.  Some of them are excellent, organise regular surgeries, are very responsive electronically and by other means.  Others have got rid of their email address, so it is not possible for someone to contact them at all.  Julian Lewis, New Forest, does not do email, for example. 

Chair: There are 650‑odd MPs.  There are always going to be one or two that are not representative.

David Babbs: The answer to your question is it hugely varies.  Some MPs are excellent; some are appalling.  Many are somewhere in between the two.

Q138   Rebecca Harris: Julian Lewis might have taken that decision as a result of getting 700 identical emails through the 38 Degrees website, which gives you, by the way, just so that you know, no idea of how strong people are feeling on something if they have not been able to put it into their own words.  I know, if I get 100 letters all written by individuals on paper, that they really care about it.  If I get 100 written in identical words, using quite inflammatory language written by 38 Degrees, I have absolutely no indication of whether this is an issue that is felt strongly on.  It is likely to be dismissed, so I would give you a warning on that while we are here, and to your users: that it would be better to contact MPs directly, in their own words.

Polly Jones: I wanted to answer a question about our contact with BIS.  Certainly in my experience, we have had more contact with BIS civil servants than we have had in previous trade agreements, which is a good thing.  The meetings have been taking place usually just after a negotiating round, which is quite useful to ask particular questions about what is happening, but the main sticking point is that what we are really interested in is the negotiating positions: what is on the table, what our Government’s position is and what we are asking for in TTIP.  That is obviously something that the civil servants cannot answer. 

We have used those meetings to cover many of the points that we have talked about today and many others that we have not had time for.  For example, is it going to be negative or a positive list?  Will it be a mixed agreement?  What is the definition of public services?  All these kinds of things we have used it to check, but a lot of the information is not something the civil servants are able to share.  One particular use has been, for example, a sustainability impact assessment that was launched on TTIP after the negotiations began.  It was due to report in July.  It has been delayed.  It was due to report in October.  There is now no deadline for reporting on it at all.  It has been a useful space to ask some of those questions that we probably would not bother writing to a Minister about—that one particular point.  It has been a useful place to deal with a lot of the technical issues.  On that issue, we have not had an answer yet at all.

Q139   Chair: Can I just ask 38 Degrees?  I cannot remember your exact words, but it was something along the lines that initially you said you were barred or refused.  Is that correct?

David Babbs: They would not let you in, would they? 

Chair: I am afraid we cannot have people from the public gallery.

David Babbs: I just wanted to make sure this was accurate.  She was not allowed in.

Chair: I think you said this.  I am just trying to clarify exactly what you said on this.

David Babbs: The roadshows specifically were described as a TTIP roadshow going around the country.  It became clear that they were targeting business, and 38 Degrees members who identified themselves as such and asked to attend were told they could not come.

Q140   Chair: I have a list of meetings arranged with NGOs.  I do not know whether these are the roadshows; I will be quite clear about this.  I believe they were BIS‑organised.  They were with Ken Clarke.  I understand that 38 Degrees was asked to attend a meeting on 18 June through the Trade Justice Movement.  They did not attend.  Another on 28 August through the Trade Justice Movement coordinator, they did not attend.  Another on 3 November, Blanche Jones invited via the Trade Justice Movement, they did not attend.  In some cases, that may be because you just did not know or whatever.  I do not know, but it would seem that there have been opportunities, on the basis of this, but you did not actually take them up.

David Babbs: We are a small organisation with a small staff team.  If the Trade Justice Movement is attending a meeting, then often it is just as helpful to get a report back as to attend the meeting ourselves.  I did not say that BIS has refused to meet with us.  I do not know if you have the list there but, me and Blanche Jones who you mention there attended a meeting with someone at BIS a few weeks ago to discuss this.

Q141   Chair: I am trying to correct the impression that you were excluded from discussions, because it would appear, on the basis of this, that there was no intention of doing so.  By virtue of what happened, you were not there.  .

David Babbs: Our members in the regions who sought to attend the roadshows were excluded, certainly in the case of the Sheffield event, which they wished to attend.

Q142   Rebecca Harris: Were they demonstrating?

David Babbs: You had to contact the organisers to be added to a list.  When they contacted asking to be added to a list, saying that they had heard about it via 38 Degrees because we informed them that this was an opportunity to find out more about TTIP—this is an example of us making available to our members information from a variety of sources—they were not allowed in.

Q143   Chair: Can I make it clear that, as a Committee, we would be concerned if the BIS Department was excluding people with a legitimate viewpoint from not attending a meeting?  We would welcome detailed evidence of this, so that we can take it up with BIS.

David Babbs: Sure.  Like I say, my sense was that with those roadshows, in practice, whether that was because they were 38 Degrees members or because they did not say they were from a business, I am not sure.

Chair: Okay, but if you can provide us with more evidence on that, we would be grateful.

David Babbs: Yes, sure.

Polly Jones: We certainly heard from individuals—not WDM members, I do not think—who had tried to go into the roadshows and could only go in if they said that they were from a business.  I am happy to find the evidence and send it on to you.

Q144   Chair: Thanks.  We would welcome that.  I have a couple of final questions.  I have seen argued—I think the World Development Movement argued—that TTIP would remove a rule against US intelligence agencies spying on European citizens.  Where did you get this from?

Polly Jones: It is not something I recognise from our materials.

Q145   Chair: In that case, I apologise if it is.  It is 38 Degrees.

David Babbs: Is it?  That is not something I am familiar with either.

Q146   Chair: That is interesting.  Could I just conclude?  I think it is fair to say that the main issues that people are concerned about with TTIP are, first of all, the issues around the National Health Service and privatisation and, secondly, the investor‑state dispute solutions.  Could I ask the two of you, if both of those were excluded in an obviously legal watertight way, would you support TTIP?

Polly Jones: No, because there is a really big issue that we have not touched on much in the discussions today about regulation and about the harmonisation of standards.  That is where people raise concerns about labour standards and where people are concerned about food and environment safety.  We have not discussed that at all today, but it is a really big issue.  The CBI said in their earlier evidence that, for them, these non‑tariff barriers are the real prize.  They look like they would be some 80% of the value of the deal.  It is the most significant part of the deal.

Q147   Chair: I have not seen much argued by other people on that, although it certainly was raised before, and you have not raised it in any significant way.  David, what about yourself?

David Babbs: I would re‑poll the 38 Degrees membership and ask them what they thought.  I am sure that they would be pleased that ISDS was removed and that the NHS was exempted.  When we polled them to prepare for this, those two areas were definitely those that got the highest amount of concern but, as Polly said, there are other concerns around potential for weakening environmental protection standards, financial regulation, the privatisation implications for other public services, food safety standards and animal welfare standards. 

The third test alongside those other two, which I think would be very significant, would be this question of levelling‑up or levelling‑down.  I do not think our members would be delighted to see regulations that they believe are beneficial to consumers and beneficial to workers’ rights being eroded in favour of weaker American regulations, so that would be the key test.  It would definitely be something that our members would be very positive about to see the NHS exempted and ISDS got rid of.

Q148   Chair: Polly, you have said we did not cover these particular issues.  Since they are the basis of a continued opposition to this, could you submit evidence to the Committee on what you think would be appropriate?  If the TUC, which did actually flag up these issues as things of concern, was satisfied with them, would you change your position on them?

Polly Jones: If the TUC was satisfied with the labour regulation side that would be very encouraging, but it is not just on labour regulations; it is much more wide‑ranging on food and environmental safety.

Chair: You can put the other things in as well.

Polly Jones: I will happily submit evidence, but this comes back to the crux of the issue about what the negotiating positions are.  We have seen some leaked draft negotiating mandates, particularly around phytosanitary procedures, which are the food and environmental standards, so I can send you the leaked text and interpretation of those.  The other information is very much what we have seen from business lobby groups, which have said, “This is what we want to see out of the deal”.  There are various US agro‑business companies that are very clear that they want to see access for some genetically modified products that they produce or hormone‑enhanced beef.  All these kinds of things are normal parts of the US market.  I have evidence of what they have said.  Is that what you want?

Q149   Chair: That would be helpful, but I would draw the caveat that in something like this you are going to find all sorts of groups putting forward things.  There has to be an element of political judgment there.  The fact that such‑and‑such company is advocating it is not, in itself, a reason for withdrawing from a process.  We would look for something fairly substantial on that.

Can I just conclude with perhaps a slightly more philosophical question?  We have a global economy in which there are new players coming more and more powerful day by day, obviously China, India, Brazil in South America and, following some way behind but potentially there, you would be looking at the African nations as well.  As they become more powerful and potentially their huge domestic base enables them to dominate the world economic market in a way they do not at the moment, but are rapidly becoming more so, they will be in a position to impose their labour standards, their IP regimes, their health and safety and so on, in a way that they may not be able to at the moment.  Do you think the future of, shall we say, the EU and the UK is best served by withdrawing or not having a trade bloc with the EU and US, but just standing back and allowing those other countries to develop and maybe impose theirs?  Do you think we would be better off by pursuing this particular route strategically or by withdrawing from it and just seeing what happens?

David Babbs: Our members would probably see that as a bit of an impoverished choice.  The answer would very much depend on the actual nature of the deal.  38 Degrees members definitely overall have instincts in favour of international co‑operation, in terms of countries working together and having positive relations with each other.  Does that mean that the TTIP deal should be pursued whatever the nature of the deal?  No, certainly not.

Chair: That is a nuanced reply, I think it would be fair to say.

David Babbs: It all depends on the content of that deal.

Chair: It all depends on the deal, yes. 

Polly Jones: Let me just clarify.  You are asking if I think some of these growing emerging economies and poorer countries would be better off having an EU‑US deal secured rather than us withdrawing from that. 

Chair: Sorry, I did not quite catch what you said.

Polly Jones: Could you just repeat the question so I can be really clear?

Chair: It was a rather long question, but I will try to summarise it.  First of all, we have a global economy where there are new players emerging and going to be very powerful, based largely on their domestic market.  Are the interests of the EU in particular, but maybe the EU and US, best served by not having a TTIP deal and just hoping that the power of those countries does not impact on their own labour standards, health, safety, IP, whatever; or are they best served by joining together and trying, as one of the European Trade Commissioners said, to have a gold standard of trading processes and standards?

Polly Jones: The gold standards referred to are not gold standards of high labour rights, protections and high environmental safety.  They are gold standards in terms of the most neoliberal ISDS clauses you can get, the most liberalised open economies.  It is a different kind of gold standard.  We would argue that the world is best served through a multilateral trade system, and what you get with the EU‑US trade deal is a rejection of that system.  It is very much, “We’ll look after our interests and the rest of the world is going to need to follow our standards, or not trade and be part of it”.

Q150   Chair: I would not disagree with the observation, but the reality is that the chances of that are much slimmer than getting a bilateral step‑by‑step approach.

Polly Jones: They are certainly much slimmer while we go and negotiate bilaterally.  You do not do both together.  That is part of the reason a multilateral system is failing, because countries feel that they are making progress bilaterally.  It detracts attention that way, and you are going to be left with areas of the world—for example many countries where we have been working in over the years—that are expected to follow the standards that might come out of this deal, but have played no part in their negotiating.  That seems a very bad principle for international trade.

              The other point that is really important to raise, particularly when you think about this issue of standards, is what role trade agreements should be playing in securing these standards.  There are many other international bodies that have responsibility for making sure that labour standards are good, for making sure that poor countries have thriving economies.  The process and negotiation for this EU‑US trade deal shows you the worst of that: that everything is poured into a trade agreement that we negotiate, rather than giving proper consideration to some of those issues and those spaces. 

Q151   Chair: The point is that the difficulties we are encountering in having a bilateral trade agreement would be multiplied by an infinite number trying to get a multilateral trade agreement.

Polly Jones: The difficulties in terms of how slow progress is and movement on some of the issues, of course; that is why multilateral agreements are slow.  That is why the WTO was set up like it was, so that all countries that were members negotiated together and came to a common agreement.  What you have with this deal is countries saying, “We all share this agenda.  We will forge ahead and do it anyway,” and, because it is the EU and US, it is a huge part of the global economy, half of the global economy. 

Q152   Chair: Coming back to my central question, assume that we do not have a multilateral trade agreement, which is a reasonable assumption.  I share with you the wish that we could, but do you think we are better off with a bilateral trade agreement between the EU and US than not having one at all and just waiting to see what develops?

Polly Jones: It comes to a question of who the winners and the losers are, which you touched on earlier.  For the EU, we might say that there are some benefits for our businesses, although the evidence for that is lighter than it ought to be.  It is certainly not the case that the rest of the world is going to benefit from it.  There have been a lot of comprehensive studies showing that many of the countries that you mentioned and many African countries could see a drop in their GDP of 3%, which is significant.

Chair: There is a multiplicity of surveys.  We will be looking at some of them.  As I think Frances O’Grady said, it depends what assumptions you put in what results you get out.  I think that probably is as far as we can take it at the moment.  Can I thank you for your contributions?  The questions were robust and your answers, in some cases, were equally robust, but that is what we want, because we need to really drill down and get to these issues to be able to recommend a fairly authoritative position for this Government to take in the process.  Thank you very much.

              Oral evidence: Transatlantic Trade and Investment Partnership (TTIP), HC 804-i                            47