Shadow Chancellor John McDonnell has climbed up in the business sector’s estimation in recent days, winning some applause in at least one unlikely forum: the British Chambers of Commerce.
Following Labour leader Jeremy Corbyn’s commitment to keeping the UK in “a customs union” with the EU—a commitment the CBI and many independent business leaders have demanded the Prime Minister adopt—critics are starting to seriously consider the opposition party’s vision for the UK and its strategic influence in the world.
Whether or not the UK remains in the customs union or single market, the UK will have to be far more strategic about its relationship with major economies.
Take India. On Thursday evening, McDonnell spoke to the Indian Professionals Forum to address the role business and innovation can play in building economic ties with that country.
India invests far more in the UK than in any other European economy. The UK is India’s largest investor in the G20.
Nothing is stopping the UK trading more with India—not even the EU. The only impediment is a lack of strategic ambition.
The UK’s leaders have been slow to locate the UK’s global identity in the twenty-first century. Would John McDonnell and Jeremy Corbyn be any exception? Would India recoil from the UK if Corbyn became Prime Minister—and could a Labour Government maintain the UK’s position as India’s gateway to Europe.
The Labour leader recently spoke at the Commonwealth Parliamentarians Forum, where the audience included 24 Indian MPs.
He railed against an “Empire 2.0” approach to building advantageous economic ties with former colonies and called for a ‘partnership of equals’—citing the economic trajectory of India, a driving force in global economic growth.
His comments would have done much to enamour him to many in India who see the value and opportunity in a more strategic partnership in the UK.
Showing no patience for imperial nostalgia, Corbyn echoes Shashi Tharoor’s 2007 book Inglorious Empire, a rigorous and fearless academic critique of the British Empire’s legacy in India.
Yet we should look carefully at the areas where Corbyn is really able to construct partnerships with India, through better engagement with the Indian diaspora community, and with technology, business and infrastructure initiatives that are shaping India under Prime Minister Modi.
Justin Trudeau’s recent visit to India should be a warning to international leaders. Prime Minister Trudeau’s reluctance to denounce the Khalistani separatist movement has not enamoured him to the Modi government.
Jeremy Corbyn’s approach differs to Trudeau’s, but behind the generalities and the hope for a “partnership of equals,” he hesitates to grapple with the real issues that India faces.
Moreover, the Labour leader has shown an unfortunate reluctance to engage with the Indian diaspora. In 2015, more British Indians voted Conservative than Labour for the first time and an Ashcroft election day poll in 2017 showed that Labour still had a long way to go to recuperate Sikh and Hindu votes.
Prime Minister Modi treats the 1.5 million-strong Indian diaspora in the UK as a vital extension of India’s foreign policy outreach, a ‘living bridge’ between the UK and India.
The Labour leader must counter the perception that he is deaf to the concerns that the Indian diaspora passes down from generation to generation: aspiration, enterprise, global mobility and pride in their nationality—both Indian and British.
Those concerns reach further, too. Indians are concerned about creating high-quality, inclusive growth, expanding their energy supply while also reducing their carbon footprint, cleaning up rivers and improving infrastructure.
For example, the London Stock Exchange is the largest market for offshore rupee finance in the world. As far as India is concerned, it could be advantageous to put the City of London’s financial sector first in any future trade agreement with the EU—contrary to calls from John McDonnell.
By reining in the financial markets, a Labour Government may limit the UK’s power to help India finance its infrastructure expansion programme and the growth of its green energy sector. If India’s economy is going to grow, the UK needs to offer help in building energy security and supporting capital flow.
The UK also needs to draw on Research and Development capabilities and emerging sectors—such as renewable energy and digital technology—to ensure it is reaching the transformational potential of ties with India, a nation which hopes to accelerate its rate of economic growth and its output in intellectual property and research.
A Labour Government could still be hugely advantageous to India, if Corbyn and McDonnell show that they are happy to move above Brexit and accept that, under Modi, India is in many ways changing for the better, and present a real vision for the UK as a global strategic partner.
The inaugural UK-India Week will take place 18-22 June this year.
What would a Labour Government mean for the UK’s ties with India?
A Labour Government could still be hugely advantageous to India, if Corbyn and McDonnell are willing to accept how the country is evolving
March 09, 2018
File photo dated 10/02/18 of Shadow Chancellor John McDonnell, who has said that vulnerable children are "paying the price" of austerity and has claimed that he has called for an extra £2 billion to address the "national scandal"
