Intended as a platform to deliver a positive, global statement on Britain’s future after Brexit, Theresa May’s trade mission to India ultimately underscored the dilemma at the heart of the post-Brexit vision.
A great number of recent reports have highlighted the lack of clarity regarding what Brexit will mean for Britain’s future relationship with the European Union. In particular, commentators have debated the extent to which Theresa May’s Government will prioritise restrictions on the movement of people over access to the European single market. By contrast, the question of Britain’s future relationship with the wider world is understood to be relatively straightforward. The process of leaving the EU, it is assumed, will provide Britain with the freedom to open itself up to emerging global markets in order to secure its economic future.
This assumption, however, belies the fact that the dilemma at the heart of the Brexit negotiations – how to balance the advantages of strong economic ties against public concerns regarding immigration – could also impact on Britain’s ability to build stronger relationships globally. London is aware of the continuing sensitivity towards any concessions on the access of migrants to Britain. As the UK seeks to present itself as ‘open for business’, it therefore faces the challenge of doing so without opening its borders. This was a tension that last week’s much anticipated UK trade mission to India threw into sharp relief.
Open for business
Amidst an ongoing domestic debate regarding the judicial and legislative processes for Britain’s exit from the European Union, Theresa May arrived in India on November 6th with the intention of making a clear and ambitious statement on Britain’s future outside the EU. ‘The Prime Minister went to India’, the Government’s official communication reported, ‘to deliver on her ambitious vision for Britain after Brexit’.
The choice of India for May’s first trade mission since becoming Prime Minister, and her first bilateral visit outside Europe since the country’s referendum, was by no means incidental. India is currently the third largest investor in the UK, with Indian companies responsible for the employment of around 100,000 people. Britain, for its part, invests more in India than any other G20 country. Maintaining strong ties are therefore seen as a vital component of Britain’s ‘post-Brexit’ economic security.
The UK cannot begin official free trade deal talks prior to triggering Article 50 of the Lisbon Treaty. But the May Administration is nevertheless keen to get the ball rolling early by opening new opportunities for British businesses – particularly in the technology and professional services sector – in India. May’s visit therefore consisted of a series of engagements focused on this objective. The Prime Minister oversaw the finalisation of several commercial deals between British and Indian companies and attended a ‘UK-India Tech Summit’ in New Delhi alongside her counterpart, Narendra Modi.
Doors wide shut?
If this was the intended script of May’s mission, it was one that many in India did not wish to follow. India has historically been reluctant to open the very sectors Britain wishes to liberalise – particularly professional services – to external competition. Were it to do so, however, one thing New Delhi would likely expect in return is increased opportunities for Indians to live, study and work in the UK. As May tried to concentrate on the promotion of British business, it was the question of Britain’s stance on immigration rules that was of interest to most Indian officials and business leaders.
Here, the contradiction at the heart of Britain’s post-Brexit vision was exposed in stark terms. With immigration representing a highly sensitive political issue in Britain, the government is currently unwilling to consider relaxations on increased access for Indians. Indeed, May has been at the forefront of efforts to limit Indian migration to the UK in recent years. In her former capacity as Home Secretary, she introduced restrictions on immigration and student visas that led to a 50% drop in Indian students enrolled at British universities. In a poorly timed move, her government announced further restrictions, including an increase on the salary threshold for non-UK workers, in the days leading up to last week’s trade mission.
Though May attempted to deflect criticism by offering minor concessions, such as India’s inclusion into a scheme allowing regular business travelers expedited border procedures in the UK – the so-called ‘Registered Traveler Scheme’ – May was not willing to offer more. As Modi used his speeches to emphasise the need for ‘greater mobility and participation’, the British Prime Minister stated that the current framework represents a ‘good system’.
Immigration and the post-Brexit vision
The British government will no doubt downplay the idea of a fundamental contradiction in its post-Brexit vision. Britain can be an open and active player in the world economy, it will argue, without needing to open its doors to increased immigration. Indeed, some would insist that to trade immigration controls in exchange for market access overseas would simply recreate the problems at the root of Britain’s decision to leave the EU.
What last week’s developments made apparent, however, is that this approach may do little to help Britain in its bid to establish itself as a global economic player. As the UK seeks to open up opportunities for its businesses overseas, it may well have to face up to the reality that what its potential trade partners seek in return is the very thing it is unwilling to give; increased access for foreign citizens to educational and employment opportunities in the UK. When it comes to large emerging markets like India, where Britain is by no means the only country vying for a piece of the action, a lack of flexibility on immigration could prevent the quick and meaningful free trade deals that many see as the key to the country’s economic future.