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Madam Deputy Speaker (Judith Cummins)
Before I call the Minister to make his statement, can I say how disappointing it was to see details of the India trade deal released to the media a few hours ago, before the Minister came to this House?
The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)
I wish to make a statement on the progress that this Government have made towards a UK-India trade deal. I am delighted to inform the House that we have now concluded negotiations on a comprehensive, modern agreement with the fastest-growing economy in the G20.
Hon. Members will no doubt be aware that India is expected to be the third-largest economy in the world by 2028. By the end of this decade, it will be home to an estimated 60 million middle-class consumers, and with trade between the United Kingdom and India already standing at north of £43 billion, we know that this powerhouse economy is and will remain a hugely important market for British businesses. While past Governments have failed to negotiate a deal with India, this Government have today succeeded. We have brokered the most generous trade deal ever agreed by India in its history.
From day one of this deal coming into force, it will make trade between our countries cheaper, easier and quicker. UK exporters will benefit from much lower tariffs across a whole host of sectors, including those that we are prioritising in our industrial strategy. It means simplified customs processes for businesses in advanced manufacturing and aerospace, in the food and beverage sector, and in the creative sector, which will benefit from improved copyright protection.
For our world-leading financial and professional services companies, this deal locks in access to India’s fast-growing market. It will ensure that UK banks and finance companies are placed on an equal footing with Indian suppliers, and it encourages the recognition of professional qualifications, so that UK and Indian firms can access the right talent at the right time, whether they are in Mumbai or Manchester. This deal will unlock new opportunities for businesses in every part of the United Kingdom, including our advanced manufacturing companies in the north-east, our iconic Scottish whisky brands and our car plants in the west midlands. In all, we will have secured over £400 million in tariff reductions in the first year alone, doubling to around £900 million after just 10 years.
Crucially, the deal we have negotiated will provide bespoke support for small and medium-sized enterprises to enter the Indian market, alongside a firm commitment from India to address the trade barriers that those businesses face. Since taking office, we have committed to hardwiring the views and interests of small businesses into everything we do, and the deal we have negotiated is evidence of that. For the very first time, British businesses will have guaranteed access to India’s vast procurement market, covering goods, services and construction. They will be able to bid for approximately 40,000 tenders worth at least £38 billion a year.
The deal that we have just got over the line is further proof that this Government are using the power of international trade and investment to raise living standards here at home. Indeed, experts predict that it will boost our bilateral trade by some £25.5 billion. It is also projected to increase UK wages by £2.2 billion each year, while adding nearly £5 billion to our GDP over the long run.
We have done all that while defending stoutly the UK’s national interest. We have brokered a deal that protects our NHS and upholds our high food standards. It ensures that our points-based immigration system remains unaffected. The deal demonstrates our commitment to both workers and businesses, staying true to our Labour values while contributing to our primary mission of economic growth.
I recognise that this House will need time to scrutinise the deal before the ratification process. My Department will follow the process set out in the Constitutional Reform and Governance Act 2010 in sharing the finalised treaty text with hon. Members. The House will, of course, have the opportunity to scrutinise any legislation associated with its implementation.
This deal sends a powerful message about the UK and India’s shared commitment to free, fair and open trade. The UK-India relationship has deep, enduring roots, exemplified by the living bridge of 1.9 million people of Indian heritage living in the United Kingdom. While I do not personally lament that the right hon. Member for Richmond and Northallerton (Rishi Sunak) is no longer the UK’s Prime Minister, it would be wholly wrong of me not to acknowledge his significant achievement as the first British-Indian Prime Minister, which is a testament not just to his own ability but to the close bonds that unite our two nations.
The Government are proud to back open markets and free trade. We recognise that Britain has always been an open, outward-looking trading nation, and we believe that open markets and free trade are fundamental building blocks with which the UK can secure its opportunities and prosperity at home and abroad. Through our upcoming trade strategy, we will set out our ambitions to engage with more industrial giants, like India, to ramp up trade and investment over the coming months and years.
Today, though, as close trading partners and as friends, I am proud that we have secured this deal with India. It is a deal that affords UK businesses certainty and stability during a time of global uncertainty and instability, and a deal that will give British businesses access to one of our biggest markets abroad, while raising wages and driving growth here at home. That is what this deal delivers, and I commend this statement to the House.
Dame Harriett Baldwin (West Worcestershire) (Con)
I thank the Minister for advance sight of his statement. This deal marks a landmark moment for the UK and its global trading relationships because it is the largest trade deal secured by this country. I was therefore shocked that the Minister did not acknowledge that progression of the deal was possible only thanks to our Brexit freedoms. After all, the European Union does not have a free trade agreement with India—something the Minister must bear in mind as he follows the orders of the Prime Minister on the EU reset.
We have not seen the minutiae of the detail in the agreement that the Government are announcing today, so we will reserve our full judgment on the deal until we have had the opportunity to scrutinise it at length. However, I will take this opportunity to highlight some questions. First, what concessions did the Government make that their predecessors were not willing to make to get the deal over the line?
Secondly, I was shocked that a very significant piece of information was left out of the Minister’s statement today—one that we only found out from the Indian Government’s statement. Why did Indian Prime Minister Narendra Modi make a point of announcing the agreement of a double contribution convention between India and the UK, while the Minister has not even made a passing reference to it today in his statement or his press release? A double contribution convention will come at a significant cost to the British taxpayer and British businesses. Workers who enter the UK under such conventions are eligible to only pay national insurance contributions in their home country—in this case, India.
Again, we only know from the Indian Government’s press release that the exemption for national insurance contributions for Indian workers will be for three years. Does that mean that Indian workers currently in Britain will get a refund from His Majesty’s Revenue and Customs, or does it mean that new Indian workers will not pay any contributions in the first place? Did the Exchequer effectively give away a massive subsidy to get this trade deal over the line? Will it really be 20% cheaper for businesses in the UK to hire Indian workers than British workers? Will the convention apply only to seconded employees of Indian companies, or will it apply more broadly to all Indian workers in the UK, and if so, from when? How many additional work visas will be issued to Indian workers under this agreement? Will the convention really mean that, for example, an Indian-owned restaurant chain in the UK could pay no national insurance here for its chef, while the British pub next door pays full national insurance for its curry chef?
Will this deal reduce the incentive for the Indian millionaires who are currently fleeing the UK for tax reasons—a subset of the many millionaires who are doing the same—to do so? Can the Minister outline what the cost of this agreement is to the Treasury? How many British nationals do the Government anticipate will make use of the reciprocal rights in India? I fear that when it comes to British workers, we have gone from two-tier Keir to two-tier-taxes Keir. This Government are literally putting up taxes for British workers while cutting them for Indian workers.
I am aware that India has expressed concerns about the UK becoming a rule-taker to the EU, so will the Minister confirm what commitments and assurances he made on that matter during the negotiations? While Conservative Members will never talk down the benefits of free trade, agreements such as this one have to be made on fair terms for both parties. As it stands, this deal looks like it is subsidising Indian labour while undercutting British workers. Will the Government back our domestic market by scrapping their jobs tax?
I look forward to hearing from the Minister a reply that actually answers these questions. If he chooses—as he sometimes does—to bat away genuine questions from the Dispatch Box, could he follow up in writing?
Mr Alexander
I thank the hon. Lady for her recognition that this is a landmark deal, although I have to say that it was not her most generous welcome of a deal that the previous Government worked for many months to try to secure—it is right to recognise that, albeit they did not manage to close the most difficult remaining issues. I seem to remember that it was a former leader of the Conservative party, the former Member for Witney, who promised that his party would stop “banging on about Europe”. Alas, that advice does not seem to have been taken in the Conservatives’ approach to today’s landmark agreement with India.
The hon. Lady inquired how we got the deal done when our predecessors failed to do so. Respectfully, I would say that it was through a process of patient, pragmatic and painstaking work—a very different approach from the kind of Instagram diplomacy that all too often characterised the approach of past Trade Secretaries and Trade Ministers. That allowed us, with the political leadership shown by the Secretary of State, to close significant chapters on goods and services. It allowed us to then reach a considered judgment that meant that, with stability of political leadership and clarity of ministerial direction, we could secure concessions from the Indians and conclude the agreement in a way that eluded our predecessors.
The hon. Lady asked specifically about the double contribution convention. I can assure her that that reciprocal agreement will benefit UK workers and their employers as the opportunity within India expands. India will have one of the world’s largest middle classes in the coming decades. The agreement will cover only a specific and limited group of Indian businesspeople for a period of three years. It is worth recognising that the Indians have other arrangements in place that extend longer than that. The workers will be required to pay their immigration health surcharge to the national health service, so the convention does not affect NHS funding.
The DCC that we have agreed is reciprocal and will benefit UK workers in India as well. India is home to the fastest growth rate in the G20, so the opportunity here for the United Kingdom is only likely to grow over time. The agreement was made in the context of the wider deal, which will bring billions into the UK economy. I can assure the hon. Lady that the United Kingdom already has social security agreements in place with a range of countries and trading blocs, including the European Union and the United States.
On the broader immigration issue that the hon. Lady raised, I can assure her that the deal does not affect the points-based system. The points-based system is not affected by the agreement that we struck today. The deal only covers business mobility, which is different from immigration, as it is about travel for specific and temporary business purposes. As a result, UK businesses will benefit from additional business mobility routes supporting them as they expand into India. Student visas remained off the table.
I hope that that gives some clarity to the hon. Lady. I am grateful for her recognition that it is a landmark deal. It is right to recognise that the Conservatives sought to secure this deal, and I hope that in the course of the conversations that we will have across this Dispatch Box today, we will be able to recognise that this represents a very significant win for the United Kingdom in very challenging times for trade.
Gregor Poynton (Livingston) (Lab)
The conclusion of the negotiations on this free trade agreement is a major win for Scotland’s economy and for my Livingston constituency in particular, given that we bottle Glenmorangie whisky and bake Paterson’s shortbread. We also have a strong and growing digital services sector, particularly with small and medium-sized enterprises. Can the Minister say a bit more about how this deal will help those businesses, too?
Mr Alexander
I thank my hon. Friend and fellow Scottish Member of Parliament. One of the commitments that we made when we were both elected—in my case, re-elected—to the House back in July was that we would seek to ensure a Labour Government delivering for Scotland. The cut that we have secured in whisky tariffs for the huge and significant market in India is a clear and tangible example of the difference we are making. He does not need to take my word for it. These are the words of Mark Kent, the chief executive of the Scotch Whisky Association:
“The UK-India free trade agreement is a once in a generation deal and a landmark moment for Scotch Whisky exports to the world’s largest whisky market. It shows that the UK government is making significant progress towards achieving its growth mission, and the Scotch Whisky industry looks forward to working with the UK and Indian governments in the months ahead to implement the deal”.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Clive Jones (Wokingham) (LD)
I thank the Minister for advance sight of his statement. At a time when Donald Trump is fuelling global instability through protectionism, international co-operation is more important than ever. A UK-India trade deal is a positive step, and we look forward to seeing the detail of the deal. Parliament must be able to scrutinise the details carefully, especially the proposed changes to national insurance contributions. When Labour was in opposition, it agreed with the Liberal Democrats that there should be a vote on trade deals. Both my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) and I have made the Lib Dem position clear: there should be proper scrutiny and a vote on a trade deal.
The Government’s own export Minister, the hon. Member for Harrow West (Gareth Thomas), said that the current ratification process is “not fit for purpose”, and he is right. Does the Minister of State agree that denying a vote not only contradicts Labour party policy, but sets a dangerous precedent, especially ahead of any future US deal? Can he explain the Government’s massive U-turn since entering government? Finally, will the Government push for a new UK-EU customs union—the fastest way to boost our economy—at this month’s political summit?
Mr Alexander
The hon. Gentleman has referred to our attempt to reset our trading relationship with Europe. The red lines that were set out in our manifesto are very clear, but within those red lines we are endeavouring to broaden and deepen an important trading relationship that represents about 46% of the UK’s trade. As for the hon. Gentleman’s broader observation that the agreement we have reached today is, as it were, a pretty bright-shining light in what is a somewhat dark sky for international trade, I agree with him. It is, hopefully, a sign of further deals to come and of a commitment to taking forward deals that are mutually beneficial, in this case for the Indians and also for the United Kingdom.
When it comes to the wider question of how the deal will be scrutinised, the hon. Gentleman is right to recognise that today’s telephone conversation with Prime Minister Modi was just the start of the process. A press release has been published, along with a list of the top benefits, but we hope to publish a paper today setting out in more detail what has been agreed—the conclusion summary paper—and there will then be a process moving towards signature and a legal scrub of the text. However, as the Prime Minister made clear a few days ago, we will follow the process set out in the Constitutional Reform and Governance Act 2010.
Barry Gardiner (Brent West) (Lab)
Last week I had the pleasure of meeting representatives of the Federation of Indian Chambers of Commerce and Industry when they came here with my old friend Piyush Goyal. I congratulate the Minister and his officials, as well as FICCI and the India Global Forum—under the leadership of Manoj Ladwa—and, indeed, everyone who has spent so many years laying the groundwork for this agreement.
The Minister recognised the doubling of India’s service and IT exports over the last decade and the benefits that we can gain from engagement and co-operation in respect of the service and knowledge economy, but I think it important for him to outline further what the benefits of the double contribution convention on national insurance will be, and how they will facilitate that engagement and co-operation for our workers in India.
Mr Alexander
I thank my hon. Friend for his generous words of congratulation. I know that the bilateral relationship between the United Kingdom and India has been a constant feature of his long service in the House, and a particular focus of his parliamentary work. He is right to recognise, in the context of both digital services and the services sector more widely, the huge potential mutual benefits for the United Kingdom and for India working together, and he is right to recognise the broad and deep relationship between our two countries—as I have said, 1.9 million people with Indian heritage live in the United Kingdom—but, as his question suggested, it is also right to recognise quite how dynamic the Indian economy is today. It has the highest growth rate in the G20, which is expected to remain above 6% over at least the next five years. Given that ours is a largely services-based economy, notwithstanding our excellence in advanced manufacturing, the opportunities for UK service exporters are huge and growing.
Sir John Whittingdale (Maldon) (Con)
I welcome the Indian trade deal, but will the Minister now switch his attention to the other side of the Atlantic, and ask Lord Mandelson to explain to the United States Administration that tariffs on films are unworkable and impossible to implement, and would do real damage to the film industry not just in the UK but in the United States?
Mr Alexander
I pay tribute to the right hon. Gentleman’s long-standing interest in matters relating to culture, media and sport and to the creative industries more generally. We are grateful for the expertise and experience that he brings to the House on these issues.
It would be one of the first occasions on which I told Lord Mandelson to do anything in many decades of our working together, but I will ensure that that is duly registered, not only in the record of this House but directly to our distinguished ambassador in Washington. It should also be placed on record that the film sector is a key part of the UK’s world-class creative industries—and we are absolutely committed to ensuring that those sectors continue to thrive and create good jobs—and that the UK has a strong and balanced trading relationship with the United States, worth £315 billion.
I am grateful to the right hon. Gentleman for his challenge to me to reach out directly to Lord Mandelson in respect of what we have read in the newspapers in the last couple of days, and I give him my word that I will ensure that Lord Mandelson is fully aware of the issue.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Amid much fanfare as usual, the former Prime Minister, Boris Johnson, announced that he would have a UK-India trade deal signed “by Diwali”—but very cunningly, he never mentioned which Diwali, so we were left waiting for years. Other Conservative Prime Ministers made similarly empty promises, which is why I particularly commend the Minister, the Business and Trade Secretary, their officials and the Labour Government for having finally concluded this free trade agreement. I look forward to this mutually beneficial agreement being formally signed. Can the Minister confirm that this landmark UK-India FTA will increase bilateral trade by £26 billion, increase UK GDP by £4.8 billion, boost wages by £2 billion year in, year out, and lead to many jobs in my Slough constituency and for people across both nations?
Mr Alexander
My hon. Friend seems to know my brief better than I do. In all seriousness, it is right to place on record our gratitude to the Prime Minister for his sterling work in getting this deal over the line. I also pay generous tribute to the Business and Trade Secretary, who has done an immense amount of work and whose visit to India in February with Minister Goyal unlocked a number of key issues that had proved to be sticking points for the previous Administration, and to officials at the Department for Business and Trade—both in London and, indeed, in India—who have worked tirelessly to secure this deal.
On its economic significance, I concur with the point that India is a huge and dynamic economy, but it is also right to recognise that we signed the right deal for the United Kingdom. This is the best deal that India has ever agreed to. It is expected to increase bilateral trade by about £25.5 billion and raise UK GDP, but we have managed to secure a deal more timeously than was anticipated and, frankly, we got a better deal than many expected.
Dame Caroline Dinenage (Gosport) (Con)
The Indian Government have said that this deal will mean that
“immense opportunities for talented and skilled Indian youth will open up in the UK.”
Will the Minister please confirm that we have not signed a youth mobility scheme with India before his Government have agreed to one with the EU? He said that we have contribution agreements with the EU and the USA, but my understanding is that we have signed double contribution conventions with only Chile, Japan and South Korea. Could he please clarify that?
Mr Alexander
What I said was that we have social security agreements with a range of countries, including the USA and with the EU. The hon. Lady asks whether a new points-based system is being introduced, and I can assure her that that is not the case. The deal covers only business mobility, and the UK has not given away visas or created new routes. Existing business mobility routes have been expanded for highly skilled and experienced professionals to cover additional sectors, but to qualify for these routes professionals must demonstrate that they meet the strict criteria for professional experience and qualifications.
Sojan Joseph (Ashford) (Lab)
Does the Minister agree that by securing the best deal that India has ever agreed, the Government have put UK businesses in an incredible position to take advantage of the rapidly growing economy?
Mr Alexander
India is quite simply the fastest growing economy in the G20, and is expected to be the third largest economy in the world by 2028. If we were choosing countries that we would wish to do deals with, India would be pretty high up the list. By 2030, India will be home to an estimated 60 million middle-class consumers, whose numbers are projected to grow to a quarter of a billion by 2050, and the demand for imports is on course to top £1.4 trillion by 2035.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
For those of us who have Scotch whisky industry interests in our constituency, it is very welcome news that apparently globalisation is not dead after all. The Minister speaks about this being a deal that opens doors, but what assistance will be given to British companies, especially SMEs, to ensure that they are able to maximise the benefits they can derive from trading in this very important market?
Mr Alexander
As my statement sought to make clear, there will be specific provision for SMEs as part of this deal, because we recognise that the huge Indian market can often be a challenge for businesses that do not have the capabilities of larger businesses.
I am grateful to the right hon. Gentleman for his generous words about the Scotch whisky industry. From the quotes that we are receiving this afternoon from Diageo, Chivas and the Scotch Whisky Association, he is very much on all fours with the industry in recognising that this is a quite extraordinary deal for Scotch whisky.
Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
I congratulate the Minister on securing the UK’s largest trade deal with the G20’s fastest growing economy. The Indian high commission recently appointed Newcastle’s very first honorary consul general, and we will have much to discuss when we meet, because there is so much in this deal to look at and scrutinise. I thank the Minister for specifically mentioning advanced manufacturing in the north-east as well as small and medium-sized businesses everywhere. Could he say a little more about how small businesses in the north-east can secure and access the opportunities brought forward by this deal? I am thinking particularly of our fantastic digital sector and our great health sector.
Mr Alexander
For both the digital sector and the healthcare sector, the deal offers significant opportunities in a huge and expanding market in India. It will deliver a degree of certainty as well as significant tariff reductions across a range of sectors, and it also affords us the opportunity to think long-term. We want to support the advanced manufacturers with which my hon. Friend is very familiar in the north-east of England to be able to make strategic investments in exporting to the Indian market. They will be investing in exporting not just to a large but to a growing market, and one that holds significant commercial opportunities for the decades ahead.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
Just a few weeks ago, the Business and Trade Secretary said that he would
“stand up for British workers”,
so it is quite astonishing that the Minister has come to the House today to announce tax breaks for immigration. This will undercut workers in Scotland and across the UK, and it comes just weeks after Labour introduced its own tax on UK workers. It leaves us all wondering: do this Labour Government ever back British workers?
Mr Alexander
Let me name some Scottish workers who are absolutely delighted by today’s announcement. Let me quote directly what Chivas has said:
“The announcement of a free trade agreement in principle between the UK and India is a welcome boost for Chivas Brothers during an uncertain global economic environment. India is the world’s biggest whisky market by volume and greater access will be a game changer for the export of our Scotch whisky brands, such as Chivas Regal and Ballantine’s.”
Whether it is Chivas Regal, Ballantine’s or other Scottish brands, which are the product of a huge number of workers in Scotland, there is much to celebrate today.
Gurinder Singh Josan (Smethwick) (Lab)
I welcome the Minister’s statement and I congratulate him, this Labour Government and officials on negotiating the trade deal, particularly given the Conservative party’s abject failure in this regard. When it comes to our business communities in the UK, we have strong values in relation to workers’ rights, human rights, consumer protections and environmental sustainability, so can the Minister outline how this deal will respect and enhance those values?
Mr Alexander
I can indeed. I said that this is a modern, forward-looking agreement, and that is why there is a recognition in the deal of exactly the values my hon. Friend mentions. That represents a first for India in many cases, it reflects the fact that we were determined to secure that as part of the negotiations, and it is one of the many reasons we are proud of the agreement announced today.
Chris Law (Dundee Central) (SNP)
Today’s trade deal announcement will be welcomed by many in Scotland, not least those in the whisky industry. In the face of volatile US tariffs, this is undoubtedly good news. However, there has been increasing pressure in the UK—even from the former Prime Minister Tony Blair—for the Government to abandon their net zero ambitions. I understand that carbon mechanisms were crucial in these trade negotiations with India. Given that the SNP Government have today reaffirmed their fullest commitment to net zero and sustainable industries, can the Minister give his reassurance that the UK Government’s climate ambitions have not been sacrificed to secure this deal?
Mr Alexander
I can give the House that assurance. I thought we were going to have an uncharacteristically warm endorsement from the hon. Gentleman until he got to the word “however”. I have to say, we have been so busy negotiating a trade deal with India that we have not had the chance to read the First Minister’s “Programme for Government” today. In the spirit of generosity, he pays tribute to the work that has been done on whisky, and I will read out the statement by Debra Crew, the Diageo chief executive, who said:
“The UK-India Free Trade Agreement is a huge achievement by Prime Ministers Modi and Starmer and Ministers Goyal and Reynolds, and all of us at Diageo toast their success. It will be transformational for Scotch and Scotland, while powering jobs and investment in both India and the UK.”
I could not have put it better myself.
Imran Hussain (Bradford East) (Lab)
As has already been said, negotiating a trade deal on beneficial terms is hugely significant, particularly with regard to the recent trade war initiated by Trump. However, I have come to this House countless times to raise the issue of human rights violations and abuses against the Kashmiris by the Indian Government, and I will do so again today. Can the Minister tell me whether the persecution of Kashmiri journalists and human rights activists has been raised at any point during these negotiations, and whether he will return to this House, before he signs on the dotted line in a few months, with a full response detailing exactly how the UK Government are upholding their international human rights obligations, and not undermining efforts to defend Kashmiri human rights?
Mr Alexander
The United Kingdom is a leading advocate for human rights around the world, and we remain committed to the promotion of universal human rights. When we have concerns, they are raised directly with partner Governments, including at ministerial level. The horrific recent terrorist attack in Jammu and Kashmir was utterly devastating, and my thoughts remain with the victims, their loved ones and the people of India. It is, however, for India and Pakistan to find a lasting solution and resolution to the Kashmir dispute, taking into account the wishes of the Kashmiri people.
Andrew Rosindell (Romford) (Con)
Today’s news of a free trade agreement between the United Kingdom and India is wonderful—some of us have argued for greater free trade arrangements with Commonwealth countries for many years. Mr Modi, the Prime Minister of India, should be commended for adopting a free-market system that has brought wealth and prosperity to India, eliminating poverty and enabling India to work with countries like the United Kingdom. Will the Minister accept that none of this would have been possible had we not been sovereign and able to negotiate our own free trade agreements following our departure from the European Union? Was Brexit not the right thing to do?
Mr Alexander
First, it is right to recognise that the hon. Gentleman has form on arguing for the importance of the Commonwealth; I seem to recollect answering parliamentary questions in recent weeks on exactly the opportunity for doing effective economic work together that is provided by the Commonwealth and the fellowship of friendship that it presents us. On that, we are on all fours, and I certainly agree that we should look to strengthen and broaden our trading ties where we can. His point about Europe is a well-ploughed field in this House and elsewhere, and it seems to me that we should be looking forward and looking for new markets rather than engaging in old arguments.
Matt Rodda (Reading Central) (Lab)
I warmly welcome today’s important announcement, and in particular the benefits it will bring to the UK economy, with the billions of pounds of extra growth it will generate in both the food and drink and advanced manufacturing sectors, as well as in many other parts of our economy. Will the Minister elaborate a little on the benefits to the UK tech sector, and in particular to start-ups, such as the many in my constituency, and to the young entrepreneurs setting up their own small businesses?
Mr Alexander
Given the significant progress we have made on goods, it is right to recognise that there are also huge opportunities on services. I pay tribute to the tech sector in the United Kingdom and to the extraordinary work that is being done not just in my hon. Friend’s constituency, but more broadly. The City of London, I am glad to say, has become a significant global tech hub, not least for fintech. Chris Hayward, policy chairman of the City of London Corporation, said today that
“India is a key strategic partner, and this deal reflects our shared ambition to deepen trade ties, boost investment, and build lasting collaboration.”
Whether in technology, fintech or financial services, there are huge opportunities as a result of this deal.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
Steel tariffs were reportedly a major sticking point in these trade negotiations with India. That is of particular concern to communities across south Wales, especially following Tata’s decision to shut down its blast furnaces in Wales and across Europe while simultaneously investing in new capacity in India. Can the Minister assure the House that British steelworkers have not been sacrificed in order to secure this deal, and can he confirm what tariff rate Indian steel imports will face when the agreement comes into effect?
Mr Alexander
It was this Government who recently stepped in to save British Steel in order to save thousands of jobs and avoid a sudden collapse in our primary steelmaking capacity. Thanks to this Government’s swift intervention, we were able to secure the raw materials that kept the blast furnaces at Scunthorpe alight. British Steel has also cancelled the redundancy consultation that would otherwise have put 2,700 jobs at risk. Frankly, UK industry depends on the UK steel industry and thanks to our plan for change, demand is set to increase, as we build the 1.5 million homes, the railways, the schools and the hospitals that we need to usher in a decade of national renewal. That is the context in which we have taken forward today’s announcement.
Deirdre Costigan (Ealing Southall) (Lab)
I welcome the conclusion of negotiations on what is the best deal that India has offered any country when it comes to free trade. Many of my constituents are part of the living bridge of 1.9 million people of Indian heritage living in and contributing to this country. Can the Minister, at a time of global volatility, set out how Labour’s free trade deal gives the world-renowned clothing and food businesses in Southall the confidence to grow and expand, thereby boosting our local economy?
Mr Alexander
It is right to recognise that both producers and consumers stand to benefit in relation not just to whisky, but on a range of consumer goods. I pay tribute to my hon. Friend’s constituents in Southall and the extraordinary contribution that they have made as part of that living bridge over many decades here in the United Kingdom. The commercial opportunities in both directions are significant, which is why, I think, we were able to secure the deal today.
Dr Andrew Murrison (South West Wiltshire) (Con)
I welcome this trade deal with a global titan that will be in place for the decades ahead. It has been made possible by Brexit and by the hard work of the previous Government. However, the Minister will be aware that this country runs a very substantial trade deficit with India. Is the deal that he has negotiated likely to narrow or widen that deficit, because all we know about the tariffs, non-tariff trade barriers and trade-offs that are implicit in the deal is what we read about in the press or are told about by the Indian Government?
Mr Alexander
It is for the Indian Government to account for this trade deal in the terms that they so choose. We will follow the established constitutional process of the Constitutional Reform and Governance Act 2010 whereby not only are we sharing a statement with the House at the earliest opportunity, but the House will have the opportunity to scrutinise the details of every aspect of this agreement.
John Slinger (Rugby) (Lab)
As somebody who represents a constituency with a proud community of people of Indian heritage, with world-beating firms, a skilled workforce, and a catapult centre at the Manufacturing Technology Centre, I would like to ask the Minister to expand on how this deal will help deliver growth, economic development and innovation right across the country, and opportunities for businesses, small medium and large?
Mr Alexander
We have spoken today of the importance of the Indian market, but it is also right to recognise that the Indian market presently sits behind some of the world’s highest barriers to trade, notwithstanding the fact that it was the UK’s 12th largest trading partner. The fact that we are tearing down so many of those tariff levels as part of this agreement will be a very practical and pragmatic offering for the kind of excellence in manufacturing that he has in his constituency and that is represented across our country.
Jim Allister (North Antrim) (TUV)
How can the Government make a trade deal for the whole of the United Kingdom if they do not control the trade laws for the whole of the United Kingdom? Northern Ireland is still under the control of EU trade laws. To give a practical illustration of the problem, under the UK-India trade deal any imports to Northern Ireland from India—I speak of imports, not exports—will be subject not to any agreed UK tariff but to whatever prevailing EU tariff there is on those goods, and the EU does not have a trade deal with India. Is this not another illustration of how Northern Ireland has been left behind by a protocol that has left us still in the EU?
Mr Alexander
The Northern Ireland’s trading relationships and its status within the United Kingdom are not altered as a consequence of the Indian free trade agreement that was reached today. The established position is exactly as the right hon. Member describes and recognises the distinctive history and significance of the Good Friday agreement—not just in the protocol but the Windsor framework. A huge amount of work has been put in by both sides of the House to try to maintain a hard-won peace in Northern Ireland, and that is not compromised by today’s agreement.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
As other Scottish MPs have mentioned, this deal is good news for the whisky industry. It means, “Uisge beatha gu leòr”—whisky galore. It is also good for food producers, such as crofters in the Western Isles, whose exports of lamb products now face zero tariffs, and the salmon farming industry, which supports 420 jobs in my constituency and accounts for £187 million of trade. It is good news overall. I guess the only question is whether the Minister will be toasting this deal with a single malt Hearach from the Isle of Harris Distillery or one from Uist, Benbecula or Barra—a chain of new distilleries that now have a new export market thanks to this deal.
Mr Alexander
I think it was Tip O’Neill, former Speaker of the House of Representatives, who said “All politics is local”, so if I am going to be toasting tonight’s deal, it will be with the finest Glenkinchie whisky from the East Lothian part of Scotland, not, alas, with an Islay malt or a malt from the outer isles. I pay generous tribute to my hon. Friend, who is a doughty, tireless and fearless defender of the interests of not just the Harris tweed industry or whisky producers but Scottish salmon farmers, who are a significant contributor to UK exports, never mind Scottish exports. In sector after sector of the Scottish economy, there will be significant material benefits as a consequence of this deal. We promised that we would have a Labour Government delivering for Scotland. Today we are seeing what that promise looks like delivered.
Nick Timothy (West Suffolk) (Con)
The Minister just admitted that this agreement means the expansion of some visa schemes. The Indian Government say that the agreement “eases mobility for professionals” such as intra-corporate transferees and their dependants and independent professionals like chefs. It also says that the new double contribution convention creates a three-year exemption from national insurance contributions for Indians working here. Can the Minister confirm that this agreement will make Indian migrant workers in Britain cheaper to employ, relative to British workers, than they are today—yes or no?
Mr Alexander
The points-based immigration system is not affected. The UK has not given away visas or created new routes as part of this deal. It is existing business mobility routes that have been expanded for highly skilled and experienced professionals to cover additional sectors.
Alex Ballinger (Halesowen) (Lab)
I congratulate the Minister on securing this vital trade deal. The automotive sector in the west midlands has been worried about increasing tariffs in the US, so a trade deal with India—a country where UK brands are highly respected—is extremely welcome. Can the Minister tell my constituents in Halesowen who work in the automotive sector how this deal will benefit them?
Mr Alexander
I hope I can give my hon. Friend exactly that assurance, and I am conscious that there was an additional point I should have made earlier in relation to steel. As part of this agreement, we have included a bilateral safeguard mechanism, which allows us to temporarily suspend or increase tariffs if an industry is suffering or there is a threat of serious injury as a result of reduced duties.
To my hon. Friend’s question, automotive companies will now benefit from selling to India with tariffs under a quota reduced from over 100% to 10%. We have agreed quotas to limit the volume of duty-free imports permitted to enter our markets. That will open opportunities for the sector, giving them a competitive edge in the Indian market and increased access to India’s rapidly growing middle class. As the sector transitions to electric vehicles, so will the market access we have secured as part of this deal. It will give British businesses the opportunity to scale up their exports as production ramps up. Both the UK and India have growing EV markets and production, so we want to protect these industries while ensure that consumers have choice.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his statement. He will be aware of the tremendous filming potential in Northern Ireland, and of the increasing number of Hollywood films shot there. The Northern Ireland film and TV industry has made a significant contribution to the regional economy, boosting it by some £330 million since 2018, and 4,000 jobs are tied to it. It is essential that we outline the importance of trade deals to the regions, and the film sector must be part of that. Solutions must be found to enable global film makers to film in picturesque, skilled, cost-efficient Northern Ireland.
Mr Alexander
Picturesque and skilled—I cannot remember the other word that the hon. Member used, but I agreed with every one of them. As I recollect, significant parts of “The Crown” were filmed in Northern Ireland. There is a huge and burgeoning economic opportunity for the film industry in Northern Ireland; as he rightly recognised, that is a tribute not solely to Northern Ireland’s extraordinary scenery, but to the extraordinary skills and capabilities of its workforce. The film sector is and will remain a key part of our creative industries, which employ millions of people, not just in Northern Ireland but across the whole UK. On his point about the US, I assure him that officials and Ministers are in regular communication with our US counterparts. I will not get into the detail of those discussions, but the point he made has been well taken.
Andrew Lewin (Welwyn Hatfield) (Lab)
May I add my congratulations to the Minister and everybody involved in getting this significant trade deal with what will soon be the biggest economy in the world over the line? In Welwyn Hatfield, we have a vibrant Indian diaspora, including my friend Councillor Pankit Shah, who, just over 20 years after moving to the UK, became our first ever British-Indian mayor of Welwyn Hatfield. He has served with distinction. Our close connection is principally due to the University of Hertfordshire in Hatfield, where thousands of students from India have studied, and continue to do so. Does my right hon. Friend agree that while today is a fantastic moment for trade, it is vital that we continue to have visa schemes that encourage Indian students to come and study in our country?
Mr Alexander
Let me echo my hon. Friend’s generous tribute to Councillor Pankit Shah, and many like him who have made an immense contribution to the United Kingdom, making us what we are today. That reflects the human bridge formed by 1.9 million people, and the human dynamic here, and students play a significant, valued role in that.
Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)
AG Barr, which has iconic brands such as Irn-Bru and Rubicon, is based in my Cumbernauld and Kirkintilloch constituency. What will the trade deal mean for soft drinks companies such as Barr?
Mr Alexander
I hesitate to say, “What’s it called? Cumbernauld!” Whether for Scottish salmon, Scottish whisky or perhaps the most iconic Scottish product of all, Irn-Bru, this India-UK trade deal is good news. When I was being briefed by officials shortly before coming to the House, I asked for examples of the sectors in which we would see the biggest benefits, and my hon. Friend will be delighted to hear that Irn-Bru featured prominently in the description given.