NHS could be 'carved open' by US healthcare profiteers, warns Shadow Health Secretary Andy Burnham

Campaign groups join call for health service to be exempted from landmark trade treaty between America and the EU

The NHS could be "carved open" for profiteering US private healthcare companies by the end of this year Labour has warned, as concerns grow over the implications of a landmark trade treaty between the US and the EU that critics say would give US healthcare giants, "irreversible" powers to bid for any NHS contract.

Negotiations between the EU and the US over the Transatlantic Trade and Investment Partnership (TTIP), which aims to remove barriers to trade, are at an advanced stage.

Andy Burnham, the Shadow Health Secretary, said the NHS must be exempted from the deal to protect it from market forces and international competition law which he said threatened the "fabric" of a publicly run, free-at-the-point-of-use NHS.

Mr Burnham travelled to Brussels earlier this month for talks with Ignacio Garcia Bercero, the European Commission's chief negotiator on TTIP. He said he had seen no signs the coalition had made the case for NHS exemption. If the deal goes through in its current form it would leave GP commissioning bodies powerless to resist legal challenges from US health giants with huge financial resources in the event of a contractual dispute, he warned.

"If this goes through it will mean that any Clinical Commissioning Group anywhere in England could be challenged by a US private healthcare company – sued," Mr Burnham said. "It's a question of control – the NHS used to be able to plan these things. If it wanted to run a particular service then it could... plan which contracts would go out and which wouldn't – it doesn't hold the cards any more."

Labour will be calling for an "NHS exemption clause" as part of its European Election campaign.

The Department of Health said fears about TTIP's implications for the NHS were "misplaced", but Mr Burnham accused the coalition of using the TTIP trade deal to reinforce a "hidden agenda" to expand the role of private health care in England, set in motion by Andrew Lansley's NHS reforms, last year.

"There's no doubt the Health and Social Care Act opens up the NHS to full competition – that was always the hidden agenda in my view and [TTIP] puts the rocket boosters on it," he said. "If it goes through the genie would be out of the bottle and it would be irreversible. The stakes couldn't be higher."

Negotiations over the landmark trade deal began in July last year. Research endorsed by the European Commission claims it could be worth up to 120bn euros (£100bn) annually to the EU economy once it has been fully implemented by 2027.

However, there are fears it could pose a serious risk to the UK's sovereignty, with key concerns being new wide-ranging powers that could give companies the power to sue EU governments for policies deemed to "discriminate" against free trade.

More than 200 organisations, including Greenpeace, War on Want and the TUC, also campaigned against elements of the deal. Campaign group 38 Degrees will consult its members this week over backing exemption calls. Director Ian Palmer said: "For us the NHS is always the most popular issue. For our members it would be about protecting the NHS, ensuring it was still able to provide the support and services they're used to."

Labour insists the coalition health reforms make it "compulsory" for all NHS contracts awards to be opened up to competition, allowing private firms to pick off the most lucrative contracts on a scale far greater than was permitted under Labour – an accusation the Government denies. A recent survey by the Health Service Journal revealed a quarter of Clinical Commissioning Groups – GP-led bodies which use NHS budgets to plan and pay for health services in a local area – had opened up services to competition for fear of breaking new competition rules introduced by the Health and Social Care Act 2012.

Mr Burnham said the rules "completely undermine" the ability of the NHS to "plan and optimise" local services, adding that a treaty which made it easier for US healthcare giants to secure contracts would further "unpick the NHS fabric".

American health giants such as Hospital Corporation of America already have expansion plans in the UK. HCA, the world's largest independent hospital company, has plans to open one of the country's largest private medical clinics in the Shard skyscraper in London as well as a further £300m worth of extra investment in the UK over the next five years.

A Department of Health spokesperson said: "We strongly believe these fears are misplaced. We are clear that these negotiations will not affect the ability of the NHS to deliver a world-class service. Local doctors will remain in charge of deciding who should provide services in the best interests of their patients, and there will be no change in access to the NHS for private providers. The TTIP negotiations have the potential to benefit patients through promoting collaboration across the pharmaceutical and life science sectors. There will be no change to the principle that access to NHS services is based on clinical need, not ability to pay."