India and Southeast Asia: Free Trade Agreements

Baroness Bennett of Manor Castle Excerpts

Thursday 6th March 2025 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the noble Baroness, Lady Anelay of St Johns, for securing this debate, which is extremely timely. As many noble Lords have noted, the attempt for a UK-India free trade agreement started in January 2022 and restarted just last month.

I am concerned chiefly with one issue of transparency. The Government have apparently inherited the negotiating objectives from their predecessor Government, but they have given no indications that they plan to seek any alteration or to reopen any concluded chapters. I hope that this is a different Government from the Johnson Government, so we might expect a different approach. One of my chief areas of concern is ISDS, investor-state dispute settlement. The position of both this Government and their predecessor on ISDS has often been ambiguous. It was exempted from the UK’s first, from- scratch, post-Brexit free trade agreements with Australia and New Zealand, but, in other contexts, Ministers have publicly defended the continued use of ISDS. In December 2023, the then Investment Minister, the noble Lord, Lord Johnson of Lainston, was asked during a session of the International Agreements Committee whether the UK would press for ISDS in the India negotiations, to which he responded that he did not know. This Government have yet to set out their position. My chief question to the Minister today is what the Government’s stance is on ISDS in the India deal and the south-east Asian deals?

Why am I so concerned about ISDS? Coincidentally, the Guardian is running a large series of articles that set this out very clearly. One of those highlights the case of Greenland, where the world’s largest financial litigation company, Burford Capital, is backing a case against it—population less than 60,000. It is demanding that, despite the population democratically agreeing that they did not want uranium mining in Greenland, either uranium mining is agreed or £11.5 billion is paid to the company that was going to mine it, and of course, that litigation funder. Litigation finance used to be focused on claims about car accidents and similar, but the Guardian highlights that more than 1,400 cases have been launched against Governments and they have become far more common and lucrative. Far more than £120 billion of public money was awarded to firms through ISDS courts, including at least $84 billion to fossil fuel companies and £7.8 billion to mining companies. These have become an increasingly popular investment class for hedge funds and other investors. We have the democratic decisions of Governments, for which the peoples are being forced to pay by what are essentially financial gamblers. It is therefore obvious why we should not have ISDS in the India trade agreement.

Very briefly, I have a couple of other points to raise, about the labour and environmental chapters in the India deal. A leak in September 2023 reported that trade negotiations had already led to the conclusion of the climate and labour chapters. That will not include legally enforceable commitments on labour rights or environmental standards. Can the Minister say whether the Government are truly happy and are proceeding on that basis of no legal commitments?

Finally, I note the lack of democracy in the situation we are now in compared to when we were a member of the European Union. All this is incredibly opaque and non-transparent. Surely the Government want to turn over a new leaf and start doing this in a democratic and open way when we are talking about free trade deals.