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http://www.guardian.co.uk/analysis/story/0,3604,1394117,00.html


Analysis
--------------------------------------------------------------------------------
In the health trade
A controversial new European directive is in danger of placing the
interests of business above the safety of workers and consumers

David Rowland
Thursday January 20, 2005

Guardian

The government is backing a European commission initiative aimed at
radically reducing the powers of national government over multinationals.
Although it has received scant media attention in the UK, the "Bolkestein
directive" has provoked mass protests and debate in France, Belgium, Sweden
and Denmark.
The directive, which Britain will seek to push through when it takes up the
presidency of the European Union later this year, has two main aims: to
erase any national laws and standards that make it difficult for European
companies to enter the markets of other member states, and to allow
European companies to run businesses anywhere in the EU according to the
rules of their "country of origin".

The directive is controversial because it applies the same rules to
healthcare and social services as it does to estate agents, fairground
providers, advertising companies and private security firms. The commission
no longer sees the services provided by doctors to patients as a special
public good to be enjoyed by all citizens, but as an "economic activity", a
commodity to be traded across the EU much like any other.

Healthcare services are thought to amount to about 10% of the EU's GDP, so
the potential for private companies to make profits from healthcare is
vast. But publicly funded healthcare systems have until now been protected
by national laws. Under "control of entry" regulations in the UK,
pharmacies are granted licences to dispense NHS prescriptions only in areas
accessible to those most in need. Supermarket giants such as Asda Walmart
tried to persuade the government to get rid of this rule but, after a
public outcry, the Department of Health refused, knowing that deregulation
would destroy many community chemists.

The Bolkestein directive would require the UK to remove these rules because
it regards them as an illegal barrier to market entry.

Under the proposed "country of origin principle", European healthcare
companies providing services in the UK on a temporary basis - such as
mobile treatment units, or providers of homecare workers - would not be
required to meet the standards of the Healthcare Commission or the
Commission for Social Care Inspection. They would be allowed to operate
according to the different, and sometimes lower, standards of the EU
country in which the company is registered.

The government has bowed to pressure from the British Medical Association
and others and promised to try to exclude "publicly funded healthcare" from
the scope of the directive. But this does not offer as secure a protection
as it appears. The Department of Trade and Industry has stated that it does
not want to deny market opportunities to private healthcare providers and
says there is no clear definition of "publicly funded healthcare" in EU
law.

The fact that the DTI rather than the Department of Health is negotiating
the UK position in Brussels is a further cause for concern. The DTI is also
on record as saying that concerns about safety and quality standards should
not be allowed to outweigh the potential benefits the initiative might
bring to British businesses. Doubts have also come from outside the
healthcare sector. The Security Industry Authority, a government body that
regulates nightclub bouncers and private security firms, has also voiced
"grave concerns" about the directive. This industry is plagued by criminal
infiltration and poor standards across Europe and the SIA fears that the
protection provided to British citizens by the 2001 Private Security
Industry Act will be undone, as people working for companies based outside
the UK fall outside its control.

The trade union movement is worried that construction companies will no
longer have to abide by UK health and safety laws on building sites, and
environmental campaigners fear that local planning rules, which govern
where supermarkets can open, will be judged to be an illegal barrier to
market entry. Attempts to stem the growth in the number of bars and
nightclubs in city centres will also be thwarted by a number of clauses.

Clearly, the future of the EU and UK economies lies in the development of a
thriving, service-based economy. But many would argue that there is
something wrong with placing the interests of business above the protection
of workers and consumers.

Concerns about poorly regulated foreign companies being given a free rein
in the UK should not be seen as nationalism in a different guise. As trade
unions across Europe have pointed out, the directive will mean that those
working for companies based in poorer countries will find it difficult to
access the labour protection in the richer countries to which they are
posted. Thus the much-feared "race to the bottom" will benefit least those
communities in which people are most exploited.

Yet if EU-wide standards can be introduced to govern the quality of car
tyres, there is no reason why standards for high-quality healthcare cannot
also be worked out. Providing European citizens with a right to
high-quality public services and proper worker protection may also help to
address much of the public's disenchantment with the European Union.

As the debate over the EU constitution begins, there is a clear need to
articulate a different vision of Europe to that contained in the Bolkestein
directive, one based firmly in the European tradition of social solidarity
and responsible capitalism.

David Rowland is a research fellow at the School of Public Policy,
University College London.

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