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UK-India Trade Deal

Volume 721: debated on Wednesday 26 October 2022

(Urgent Question): To ask the Secretary of State for International Trade if she will make a statement on progress made on the UK-India free trade deal.

First, let me say that it is good to be back at the Department for International Trade.

India is, of course, an economic superpower, projected to be the world’s third largest economy by 2050. Improving access to this dynamic market will provide huge opportunities for UK business, building on a trading relationship worth more than £24 billion in 2021. That is why we are negotiating an ambitious free trade agreement that works for both countries. We have already closed the majority of chapters and look forward to the next round of talks shortly.

A strong free trade agreement can strengthen the economic links between the UK and India, boosting the UK economy by more than £3 billion by 2035, helping families and communities. An FTA can cut red tape, making it cheaper for UK companies to sell into India’s dynamic market, helping drive growth and support jobs across every nation and region of the UK. Greater access could help UK businesses reach more than a billion more consumers, including India’s growing middle class, which is estimated to reach a quarter of a billion by 2050, and give them a competitive edge over other countries that do not have a deal with India. An FTA with India supports the Government’s growth strategy, by taking advantage of the UK’s status as an independent trading nation championing free trade that benefits the whole of the UK. We remain clear that we are working towards the best deal for both sides and will not sign until we have a deal that is fair, reciprocal and, ultimately, in the best interests of the British people and the UK economy.

I welcome the Minister back to the Department once again, wish him well and thank him for his response. I am also grateful to Mr Speaker for granting this urgent question.

Not only is Diwali this year an important celebration, but it marks another milestone. In January, negotiations on the UK-India trade deal began, with the Government promising to conclude those talks by Diwali—this week. Under this Government, economic growth has been almost non-existent and promised progress on new free trade deals has not materialised. The Government are all talk and no delivery.

Not only would an agreement with India be potentially worth billions of pounds to the UK economy and would provide new markets for exporters, but it would offer the opportunity to advance key areas of shared interests. Labour Members have also been clear that it should also be an opportunity to raise issues such as workers’ rights, and environmental and climate standards.

However, it appears that progress on trade talks has stalled—this is yet another product of Conservative infighting. Members across this House are well aware of the comments on overstaying visas made by the Home Secretary, which have caused such offence. Does the Minister agree that the Home Secretary has completely undermined the UK Government’s negotiating position? Will he confirm whether she will be withdrawing those comments? Has a future target date for completion of the deal been agreed? Or is this destined to be kicked into the long grass, along with the promised United States deal? Does he acknowledge that the delay in this deal, and the US deal, means there is no prospect of the Conservative party meeting its manifesto aim of 80% of trade being covered by FTA agreements by the end of this year? Does he not accept the simple truth: on trade, the Conservatives have quite simply broken their promises?

I am delighted to have the opportunity to answer this urgent question and some of the points that the right hon. Gentleman raised. [Interruption.] I will answer all of them. First, on his question about the end of the deal, we have been clear that we have concluded, as we said we would, the majority of the chapters of the deal. Sixteen chapters, across 26 policy areas, have been agreed so far. The right hon. Gentleman will know that, after each round of negotiations, a written ministerial statement, which he can study, has been tabled in this place.

The right hon. Gentleman asked about visas. Perhaps he is trying to have a second go about the Home Secretary, about whom we have just heard an urgent question. I am not sure whether members of the shadow Cabinet are properly co-ordinating their urgent questions, but the right hon. Gentleman should know that we are talking about mode 4 arrangements. They are not immigration visas. They relate to business visas, not permanent settlement. The terms of the mode 4 arrangements remain an area of active negotiation.

Finally, the right hon. Gentleman said that the Government were all talk and no delivery on trade. That amazed me the most. He is obscuring the bigger issue for the Opposition. Let us assume that we get a good deal with India for Britain and that we get a good deal elsewhere, as we have done with Japan, Australia and New Zealand. I have been away from the Department for a year, and in that time Labour has not supported a single trade deal that the Government have undertaken. The Opposition did not support the Japan deal, they were against the Singapore deal and they split three ways on Canada. Only last month, they abstained on the Australia and New Zealand deals.

The Government are delivering on trade and the Opposition are in chaos and confusion. They have been unable to support a single trade deal to date and it sounds as though they will not support this one.

I commend my right hon. Friend for taking the urgent question. It is a pleasure to have a moment to pop down and add my voice to the important point that the deal was commenced earlier this year—I had the privilege of launching it—and that we and the Indian Prime Minister set ourselves the task of providing clarity about what a deal between our two nations could look like by Diwali. I am pleased that progress has been made.

It is important to understand the value that the deal brings not only because the Indian diaspora are such an important part of our economy—they have been incredibly important in driving what we are trying to achieve—but because so many British businesses are excited at the prospect of some of the trade barriers coming down. I would be pleased to hear from my right hon. Friend what the key areas, particularly innovation, will bring for British businesses as the deal crystalises in the weeks ahead.

I thank my right hon. Friend for her incredible service as Secretary of State for International Trade in the past year. She moved things forward in so many areas—crucially the area we are discussing. When I left the Department, an India trade deal was just a concept rather than something material. Five rounds of negotiations later, she is right that we are in a good place.

We expect the deal to do a lot on tariffs. Many of our exporters face considerable tariffs on services—professional, financial and legal. I cannot promise that we will get everything in the deal. On intellectual property, it will be easier for companies to work through innovation and so on. There is a huge number of areas of potential gain for India, including investment and life sciences. I welcome my right hon. Friend’s support. Perhaps the Opposition will take it as a lesson and support a trade deal in future.

Welcoming a Minister back to his place is now a standard response, but I welcome the Minister back.

Increased trade, ties and co-operation between India and the UK are welcome, especially in Scotland. However, that should not be at the expense of human and workers’ rights. Will the Minister belatedly guarantee that issues about human rights, the environment and health and safety, along with climate and equality concerns are fully resolved before any deal is signed?

Does the Minister really believe that there is no anger and no problem about the Home Secretary’s comments in India that might cause difficulties for the deal?

Scotch whisky exports to India are already subject to 150% tariffs. New Delhi has threatened even higher tariffs on whisky and gin in retaliation for domestic steel protections. Whisky and gin producers need to know that the UK Government are doing something to reduce those tariffs drastically. What is going on? What will be done to ensure that barriers are not just replaced at Indian state level?

Jagtar Singh Johal remains in an Indian prison without trial. He has been detained since 2017. The UK has had four Prime Ministers and five Foreign Secretaries since his illegal detention. What is the Minister doing during negotiations to right that wrong?

I thank the hon. Gentleman for that list of questions. As ever, the UK’s commitment to workers’ rights in our trade deals and negotiations and in all our international talks remains undiminished. That is fundamental for this country.

I am glad that the hon. Gentleman mentioned whisky tariffs. He did not support the Australia free trade deal, which means a reduction in whisky tariffs. Tariffs on Scotch whisky going to India are currently 150%. I will therefore watch closely his approach to the deal. Our successful removal of the Airbus-Boeing tariffs has hugely benefited the Scotch whisky industry. I am not sure whether the hon. Gentleman fully supported that.

The hon. Gentleman raised human rights. At all times, the Foreign Office engages vigorously on the case mentioned and on other cases.

Let me end with the SNP. On trade deals, it is even worse than Labour. SNP Members have never supported a trade deal concluded by either the European Union or the UK. They did not even support the trade deal between the EU and the UK. They voted for no deal two years ago. They were against the deals with Canada, Korea and South Africa. They did not even support the trade deal between the EU and Ukraine. They also abstained on the Japan and Singapore deals. The SNP is fundamentally against trade and the interests of Scotland as a trading nation.

I welcome my right hon. Friend back to his place.

I am a member of the Scotch whisky all-party parliamentary group and have had the opportunity to work closely with Scotch Whisky Association. Notwith-standing the Minister’s previous answer, will he confirm that the deal is a great opportunity for businesses up and down our great country to increase their order book and, more importantly, work with countries with shared values?

Pretty much the first visit our new Secretary of State for International Trade made was to a distillery just a few weeks ago, showing our commitment to our brilliant UK food and drink exporting sectors. My hon. Friend is right to mention the exceptionally high levels of tariffs on whisky and other alcoholic products exported to India. I cannot guarantee that we will eliminate those tariffs, but if we are not at the table conducting those negotiations—the Opposition parties do not seem to think we should be there—we will not achieve anything.

The trade deal is being discussed against a background of India not protecting human rights and civil liberties for the Christian community, the Hindu community, the Sikh community, the Muslim community and the Kashmiri community. If we are to go ahead with a trade deal, does the Minister understand that it must be based on the Indian Government’s actions on human rights and civil liberties? Otherwise, we should not proceed with it.

As I said earlier, the UK Government have an exceptionally proud record of promoting human rights around the world. In my 12 years as a Minister and a Back Bencher, I have always been impressed by the Government’s vigour in supporting global human rights.

The hon. Gentleman mentioned Kashmir. He has plenty of opportunities to raise the issue at Foreign Office questions, but the Government’s position is unchanged. It is for India and Pakistan to find a lasting political resolution to the Kashmir dispute. India and Pakistan are long-standing, important friends of the UK. We encourage both to engage in dialogue and find lasting diplomatic solutions to maintaining regional stability.

There is absolutely no pleasing the Opposition. They criticise us when we sign our deals too quickly and they criticise us when we take too long. The point is that we have to get this absolutely right. This Government have signed deals with Australia and with New Zealand, and negotiations are under way on the comprehensive and progressive agreement for trans-Pacific partnership. We are exploring the Gulf Co-operation Council and we are looking at India. We have concluded a digital partnership with Singapore. We have done a trade deal with Japan and we are improving the roll-over deals that we took from the European Union. That is what we are doing and what we are delivering on. Frankly, we have had this conversation before with the Opposition. Does the Minister agree that they do not recognise the very many benefits that these deals bring?

My hon. Friend is an experienced, dedicated and committed member of the International Trade Committee. He is right in what he says. I was in opposition myself some, gosh, 17 years ago to 12 years ago. If the Opposition are serious about going into Government they need to be clear not just about what they are against—they are against trade talks, against trade deals, and against the India trade talks—but about what they are in favour of. What are the Opposition for, Madam Deputy Speaker? The shadow Cabinet might have had a better session this afternoon deciding that rather than tabling more urgent questions.

The House of Lords International Agreements Committee published its report on the Government’s negotiating objectives in July. It criticised them as being very general and high-level, and said that they provided no clue as to the Government’s negotiating priorities. Can the Minister confirm whether high animal welfare standards are a negotiating priority?

What happens with a set of trade negotiations is that, when we set out the negotiating objectives and the scoping assessment, they are by necessity rather general, because the teams have not started negotiating, so they do not know what the other side will want to achieve in those talks. They have not actually started on any of those issues, so those things are by necessity rather general.

The hon. Lady asked about animal rights and she was quite right to raise that, as it is very important part of the Government’s agenda. None the less, the Government’s position remains unchanged: we have very high standards of animal welfare and we will make sure that they are not undermined by any trade agreement. In any case, we as a country set our animal welfare standards; they are not set through any trade deal.

Does my right hon. Friend share my surprise at the Opposition’s foot dragging on this given that one of the great prizes with India is on legal services? The right hon. Member for Torfaen (Nick Thomas-Symonds) is himself a lawyer. Does this deal not present a great opportunity, given that English law governs so many contracts, for us to progress this vital industry to secure more jobs for lawyers in this country?

My hon. and learned Friend is absolutely right. Legal services are a really important part of this agenda. One of the first meetings that I had in the Department was with the chair of the Bar Council, Chantal-Aimée Doerries, who told me in some detail about some of the gains that could be achieved in legal services by getting a good deal with India to make sure that our global, high-quality legal services are appreciated right the way across the world.

It would be easier to do trade and commerce with India if it were easy to travel there. As I am sure the Minister is aware, the British are the only nationality in Europe who are currently barred from India’s e-tourist visa system. We always used to be able to get e-visas for India, but, following the Home Secretary’s remarks, we no longer can. This is doing great damage, as we have heard on the Transport Committee, to our travel industry, to the Indian tourism industry and to the thousands of British families whose plans to travel to India are now in jeopardy. Will he use his good offices across Government to get this issue resolved in advance of any trade deal? This is real damage that is being done now.

We take an ongoing interest in the ability of our citizens to travel abroad and to access other countries. However, I stress again that a trade negotiation covers what is called mode 4, which relates to the movement of people—in other words, business visas. I am confident that we can get a good deal with India when it comes to mode 4.

Does my right hon. Friend agree that this is an exciting opportunity to help unlock the economic potential of the living bridge that Prime Minister Modi has recently described? As for the notional timeline of Diwali, does he also agree that getting the right deal is much more important than getting any deal?

My hon. Friend is right. We have a brilliant diaspora community in this country. I was delighted to celebrate Diwali—a little bit early—last week with the India Global Forum. That was a really telling example of the strength of the diaspora deal. He is also right that the content, the depth and breadth of the deal are more important than the data that it delivers. That is the case for all trade negotiations. It is a matter not of getting a quick deal, but of getting the best deal for Britain, which is exactly what we have done with Japan, exactly what we have done with Australia and exactly what we have done with New Zealand.

My colleague on the International Trade Committee, the hon. Member for Totnes (Anthony Mangnall), mentioned the trade deals that we have already signed and the progress that has been made on others. As a Committee, we have had some concerns about when trade deals are presented to the Committee. They need to be presented in a timely fashion so that the detail can be scrutinised. I do not wish to hold up a deal being made, but we understand that it can be important to get things done in a timely fashion. Can we have an indication as to when a deal will be put together and presented to the Committee?

I will not set a deadline today for this ongoing negotiation. May I commend the hon. Gentleman for one thing—apart from his work on the Committee? I think it was the Democratic Unionist party that voted with the Government on the Australia and New Zealand trade deals. It is nice to see an Opposition party that is willing to take a constructive approach to what the Government are proposing, if it is in the interests of the UK and Northern Ireland. I commend him for that.

When it comes to interaction with MPs, I did an MPs briefing last week on the India trade deal. I mentioned that we have had written ministerial statements after each round of negotiations. My right hon. Friend the Secretary of State will be appearing before the ITC, I believe, on 30 November at an introductory hearing, and I am sure that this will crop up there as well.

I welcome the Government’s efforts to secure a free trade deal with India and the growth, jobs and investment that this will help to create. However, the Minister will be aware of our manifesto commitment to reduce net migration and the perception among many of my constituents that we are not succeeding in that aim. Will the Minister reassure the House that throughout these negotiations, in seeking to boost economic growth, he will also balance this against abiding by our manifesto commitments?

The Prime Minister has been absolutely clear about the importance of our manifesto commitments. I remind my hon. Friend, as I reminded the whole House, that this deal is not about immigration; it is about mode 4 business visas, which will be really important for both countries to continue to do trade, particularly services trade, such as the legal services that my hon. and learned Friend the Member for Cheltenham (Alex Chalk) mentioned. We need to make sure that our professionals can get into the Indian market to deliver their fantastic, world-leading services.

Will the Minister please confirm that, during negotiations on this and any other trade deal, vital issues such as human rights, workers’ rights, especially women’s rights, and environmental standards have not only been discussed but that guarantees have been secured, and is he able to share what those guarantees are?

The hon. Lady is right to raise those issues. I repeat what I said earlier: the UK is very proud of our standards and of the work that we do around the world on these really important questions. These are questions and issues that are raised with India and with all of our partners at all times.

The Minister will not be oblivious to the human rights record of Indian Prime Minister Modi and his Government given the atrocities being carried out against ethnic communities across India, namely the Christians and the Sikh community, and also their revocation of articles 370 and 35A in Indian-occupied Kashmir. Will the Minister categorically give us the assurance that no trade agreement will go ahead until India meets its obligations under international law and fulfils many of its outstanding UN commitments?

I have already talked about Kashmir and the Government’s commitment to finding a resolution of that issue, working peacefully and with the two Governments together.

May I just return to the case of Jagtar Singh Johal, raised by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), and add a little bit of detail on that important human rights case? The Foreign, Commonwealth and Development Office and the Government have consistently raised our concerns about Mr Johal’s case directly with the Government of India. I believe that our then Prime Minister raised it with Prime Minister Modi earlier this year as well.

I strongly welcome the Government’s progress on this incredibly important deal. We have a thriving Indian community in Harlow, and I hope my right hon. Friend will wish them a happy Diwali. I ask him, when we sign these deals, to ensure that it is not just the big multinationals in the UK that benefit, but that he goes directly with information to smaller companies, like the many in my constituency, so they can benefit from these wonderful trade deals too?

I certainly join my right hon. Friend in wishing all his Harlow constituents a happy Diwali; it is a fantastic and particularly appropriate moment for that festival to come to this country and to India. He mentions ensuring that the trade deals work not only for multinationals, but for small and medium-sized enterprises, and he is right. The UK has an SME-led economy and it would be strongly in our interest to ensure that all trade deals work for SMEs. That is why it is typically our practice to negotiate an SME chapter in our trade deals to ensure that SMEs, which do not always have the resources to wade through a 1,000-page-plus free trade agreement document, are given headers and pointers on how that deal will help to benefit them.

I declare an interest as the chair of the all-party parliamentary group for international freedom of religion or belief. With increasing violations of FORB in India and the systematic disenfranchisement of those of Christian and Muslim faith, does the Minister agree that human rights provisions must be included in the India trade deal, and can he guarantee that no blind eye will be turned to human rights abuses for the sake of economic benefit?

I think this Government have a fantastic record of promoting religious tolerance and religious diversity abroad. The current Chancellor, when he was Foreign Secretary in this Government, made that one of his key early launch pads. I might add that the British high commission in New Delhi and our deputy high commissions right across India regularly meet with religious representatives and have run projects supporting minority rights. That is a big part of what the UK presence on the ground in India is all about.

Bills Presented

General Election (Date) Bill

Presentation and First Reading (Standing Order No. 57)

Ed Davey presented a Bill to amend the Dissolution and Calling of Parliament Act 2022 to provide for a general election to be held no later than 1 December 2022; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 18 November, and to be printed (Bill 174).

Former Ministers and Prime Ministers (Abolition of Payments) Bill

Presentation and First Reading (Standing Order No. 57)

Rachael Maskell presented a Bill to prevent certain non-statutory payments being made by the Government to former Prime Ministers; to abolish the payment of grants to persons ceasing to hold ministerial offices; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 9 December, and to be printed (Bill 175).