Dominic Raab has denied the Government is proposing to further expand the Foreign Office by merging it with the Department for International Trade (DIT).

Reports suggest Mr Raab’s department has its eyes on DIT, which is responsible for delivering the UK’s post-Brexit trade policy, following its takeover of the Department for International Development (Dfid).

Conservative former minister Dame Cheryl Gillan asked Mr Raab what plans he has to support business export activity by “eventually bringing” DIT into the newly created Foreign, Development and Commonwealth Office.

“Surely that’d make sense now,” said Dame Cheryl.

Foreign Secretary Mr Raab replied in the Commons: “We’re not proposing to integrate DIT into the new Foreign, Development and Commonwealth Office.

“But what we do want to do through the structure of trade envoys… is maximise our impact in those countries where we’re seeking to liberalise, to free up and open up greater access for British businesses and British exports.”

Mr Raab earlier told MPs there would be the chance to save “administrative costs” as part of his department’s merger with Dfid.

Responding to an urgent question from Liberal Democrat development spokeswoman Wendy Chamberlain, he said: “Of course there are opportunities to save administrative costs but as we have made clear, there will be no compulsory redundancies or anything like that.”

For Labour, shadow international development minister Stephen Doughty said the Dfid merger was “counterproductive” during the Covid-19 pandemic.

He said: “Scrapping a department that is crucial to global vaccine development, provides healthcare and aid to the world’s poorest, in the middle of a global pandemic is irresponsible, counterproductive and wrong.”

Mr Raab replied: “I understand why the Labour Party, who set up Dfid, feel proprietorial about it, but what really matters… is the effectiveness of foreign policy, and what we’ve learned in coronavirus is this merger will make sure we can be as effective as possible and also deliver more efficient value for taxpayers’ money.

SNP international development spokesman Chris Law asked how Britain’s £15 billion aid budget will be scrutinised in the new department.

He also said: “We learn today that one of the UK Government’s recent secretaries of state (Penny Mordaunt) would like to see the funding of HMS Royal Britannia funded on the back of the poorest, most vulnerable and marginalised people in the world.

“Is the royal family even aware of this?

“Is it not the case that this isn’t led by a vision of global Britain but led by a myopic Prime Minister of let them eat cake Britain?”

Mr Raab said the UK remains committed to spending 0.7% of national income on overseas, adding the Prime Minister’s decision to have joint Dfid and Foreign Office ministers is an indication of his desire to “take steps down this path” to the merger.

After saying he wants “maximum accountability” for the new department, Mr Raab added select committees should “mirror government departments” – which would result in one fewer body to scrutinise Government activity although this decision will be for MPs to take.

Mr Raab said he would represent aid at the Cabinet table.

On discussions about the merger, Mr Raab said they were going on “for several weeks and months” before adding: “But it’s been something under debate for considerably longer than that.”