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What to know about UK's general election on July 4: Candidates, impact on FTA with India

Rishi Sunak made a surprise announcement by declaring early elections on July 4, much before he completed three years in office. Opinion polls have predicted a record drubbing of the Conservatives to the opposition Labour, ending 14 years of Tory rule in the UK.

Edited By: Aveek Banerjee @AveekABanerjee London Published on: May 24, 2024 17:21 IST
UK PM Rishi Sunak campaigning in Ilkeston, Britain.
Image Source : REUTERS UK PM Rishi Sunak campaigning in Ilkeston, Britain.

London: Ending months of speculations, British Prime Minister Rishi Sunak has finally announced the date of the upcoming general election - July 4 - riding high on a stronger-than-expected economic performance in the first quarter of March that saw the United Kingdom exit a shallow recession. Now Sunak, his Conservative Party colleagues and Opposition leader Keir Starmer have hit the campaign trail as the Parliament is set to be dissolved in six weeks' time.

Sunak's rain-soaked speech on the steps of 10 Downing Street on Wednesday sent the political establishment into a flurry as he began his campaign with his three pitches "Clear Plan, Bold Action, Secure Future". The Opposition Labour Party Leader, Starmer, kicked his campaign off with a simpler one-word message – “Change”. The parliament has also entered a "wash-up" phase, concluding non-contentious legislation before dissolution. The election was not expected until October when Sunak would have completed three years in office.

All is not well for the British Indian leader, however, as polls have predicted a record defeat for the Conservative (Tory) party to Labour this year, as the latter holds a firm lead after a series of recent by-elections and local election victories. This would mark the end of the Conservative Party-ruled government after 14 years, which has been mired in challenges and controversies. Questions still remain over the UK's economic growth and Sunak's Rwanda deportation policy, which is believed to have influenced his decision to call for early elections.

For one, Britain has suffered from high inflation and poor economic growth for several years, although the Conservatives succeeded in halving inflation after a peak in October 2022. The issue of immigration has also hurt the Conservatives as thousands of asylum seekers have crossed the English Channel in risky boats, and the signature Tory policy of deporting some of these migrants has been criticised by members of Sunak's own party and human rights organisations. These issues have made the upcoming election in the UK a high-stakes one, with a long road ahead of Sunak.

Who are the prime contenders in UK's high-stakes election?

People throughout the United Kingdom will choose all 650 members of the House of Commons on July 4 for a term of up to five years. The party that commands a majority in the Commons, either alone or in coalition, will form the next government and its leader will be the prime minister. That means the results will determine the political direction of the government, between the right-wing Conservatives and the left-leaning Labour.

"Now is the moment for Britain to choose its future and decide whether it wants to build on the progress we have made or risk going back to square one and no certainty. Over the next few weeks, I will fight for every vote, I will earn your trust and I will prove to you that only a Conservative government led by me will not put our hard-earned economic stability at risk," Sunak, the first UK PM of Indian heritage, said while announcing the date of the general election. He is up against Labour's Keir Starmer, a former director of public prosecutions in England.

Apart from that, the Scottish National Party, which campaigns for Scottish independence; Liberal Democrats; and Democratic Unionist Party, which seeks to maintain ties between Britain and Northern Ireland, are currently the three largest parties in Parliament after the Conservatives and Labour. Some observers suggest the new Reform Party, formed by Tory rebels, may siphon votes from the Conservatives.

Former Labour leader Jeremy Corbyn, who was expelled from the party over his stance on anti-Semitism within the party in 2020, is expected to contest independently from the Islington North seat, which he has held since 1983. Ed Davey, leader of the Liberal Democrats, and John Swinney of SNP also look to dent the Conservative vote bank with wins in southern England and Scotland respectively.

Sunak's surprise decision alarmed many Conservative leaders, as many MPs are fearful of losing their seats and a washout due to the anti-incumbency that has built up after 14 years of the party being in charge, with a rising cost-of-living crisis and Sunak's failure to keep up with his poll promises. Healthcare, the environment and climate change are also key issues that will influence the July 4 election.

What does it mean for the India-UK FTA talks?

India and the UK have been working on a Free Trade Agreement (FTA) for a long time since before Sunak came to power, as part of efforts to boost bilateral trade currently worth 38.1 billion pounds per year.  The FTA talks began in January 2022 year with Diwali 2022 set as the initial deadline by Johnson. Under Sunak-led Tory government, no new timelines were set but both sides were looking to get things signed off before a general election year in India and the UK in 2024.

India and the UK have held 13 rounds of talks on the FTA and the 14th round started in January, where they were looking at sealing it by bridging differences on certain contentious issues including mobility of people and import duty concessions on certain items. There are 26 chapters in the agreement, including goods, services, investments, and intellectual property rights.

Now that the elections have been announced in the UK, just a month after India's Lok Sabha elections are declared on June 4, the hopes of a deal being clinched by Sunak's government have diminished greatly as the country is now busy preparing for the election. However, experts believe that the results of the UK election would have no large changes on the India-UK trade negotiations. The Labour Party has committed itself to “finish the job” but the timelines will remain uncertain for some time after the surprise announcement. 

“Rishi Sunak’s shock poll date announcement of July 4 has skewered any prospect of the finalisation of the long-awaited and much-anticipated FTA with India by a Conservative government,” said Rahul Roy-Chaudhury, Senior Fellow for South and Central Asian Defence, Strategy and Diplomacy at the London-based think tank International Institute for Strategic Studies (IISS). “The Labour Party, widely expected to form the next government in the UK, has maintained steadfast support for such a deal, subject to an examination of the 'fine print' once it comes into office."

The Indian industry is demanding greater access for its skilled professionals from sectors like IT and healthcare in the UK market, besides market access for several goods at nil customs duty. On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, electric vehicles, lamb meat, chocolates, and certain confectionary items.

(with inputs from agencies)

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