India

Lord Liddle Excerpts

Tuesday 18th October 2011 Lords Chamber

[Lord Liddle]

My Lords, the Government have set themselves a bold ambition to put the British relationship with India on a new and stronger footing. The Conservative manifesto at the last election called for a new special relationship. At the Prime Minister’s visit in July 2010 there was launched what was called an enhanced partnership. We are grateful to my noble friend Lord Parekh for enabling us to have this debate, which is an opportunity to assess progress on that bold ambition.

On these Benches, we are strong supporters of what the Government are trying to do. India has made remarkable progress in the past two decades. Its growth is spectacular even though inflation poses a problem to its sustainability. On the official measures, the numbers of people living in extreme poverty have fallen from 26 per cent of the Indian population to 16 per cent, which is a great achievement.

For reasons of sentiment and self-interest, and because people from India and south Asia make a crucial contribution to our society here—while recognising the point emphasised by my noble friend Lord Parekh that India has a different perspective on world events than often we have—we must try to strengthen the relationship. But we must not do that on the basis of false premises.

One false premise was that the previous Labour Government neglected India. One of the things of which I am proudest is that development aid to India under the previous Labour Government was three times the level in the past three years of what it had been in the 1994-97 period; that is, £825 million being spent from 2008-11. I know that there are question marks about whether we should continue to do this but we on these Benches will always remember that there are more poor people in India still than there are in the whole of sub-Saharan Africa.

A second false premise is that a choice is to be made between a bilateral relationship and a multilateral relationship. The truth is that the two have got to go together. The only point on which I would disagree in the excellent speech made by the noble Lord, Lord Bilimoria, is that it is the capacity of the European Union to mobilise hopefully an agreement on a Doha trade round but certainly to agree a bilateral free trade agreement with India. It is that capacity which will lead precisely to the kind of liberalisation in India that he is seeking. But on our own I do not think that we have that ability.

I agree with what the noble Lord, Lord Ahmad of Wimbledon, and many other speakers have said; namely, that the economic relationship has tremendous potential. But let us remember that it is starting from a very low base. Of our outward investment in Britain, it is regrettably the case that only 1 per cent of Britain’s foreign direct investment is located in India. More than 50 per cent is in the European Union. On looking at Indian exports, I found an extraordinary fact today: India exports more to the Benelux countries than to the United Kingdom. There has been no dramatic expansion of our trade in recent years. Indeed, I picked up an article that told me that in 2008, Britain was India’s eighth largest trading partner, exporting goods worth about $5 billion. By 2010, that figure had fallen to $4.4 billion. There is an awful lot of work to do to make this economic relationship work.

Our fear on these Benches is that the Government are putting crucial new obstacles in making this relationship a success. Last January, we were all greatly relieved when the right honourable Vince Cable, the Secretary of State for Business, Innovation and Skills, told us that the visa problems he thought that there would be in the business relationship with India were being solved. Only a month ago, I read in the Times that whereas four years ago it was possible for an Indian business person coming to Britain to get a visa within a few days, it now takes 15 days. People have been saying that it is a lot easier to go to France and other countries in Europe to do business because of these visa rules.

The Government set lots of other objectives for their partnership with India, including higher education, on which noble Lords have spoken. Last week, in the debate on universities, we heard how the number of applications from Asia to Russell group universities is falling fast. How can any nation so comprehensively shoot itself in the foot simply to fulfil a stupid, populist policy that was included in the Government’s manifesto in terms of immigration? I repeat: it is simply shooting our future prospects in the foot for the sake of rank populism.

The same applies to the future leaders’ network that the Government hope to set up. How can we have a network of future leaders if we prevent them from coming to this country? Let us have a constructive approach to this relationship and try to build it, and not put obstacles in its way.