The UK’s new trade deal with India does not undercut British workers, the trade secretary has said.
Opposition politicians have criticised a provision in Tuesday’s deal exempting some temporary Indian workers from national insurance payments, claiming this would undercut British staff.
On Wednesday, Jonathan Reynolds described the claim as “completely false,” telling the BBC: “There is no situation where I would ever tolerate British workers being undercut through any trade agreement we would sign. That is not part of the deal.”
Under the terms of the agreement, staff working for an Indian company who transferred to the UK for less than three years would pay into the Indian social security system rather than paying into both British and Indian systems as they do now.
UK workers temporarily in India would remain subject to national insurance, but be exempt from Indian social security levies.
Reynolds pointed to similar deals with 50 other countries, including the EU, the United States, Canada, and Japan, saying that the previous Conservative government signed a similar deal exempting Chilean workers from national insurance for five years.
Seconding Indian staff to the UK will also involve additional costs such as the immigration health surcharge and relocation costs, Reynolds said.
He added that the overall impact of the deal would mean more tax revenue for the Treasury, and said he expected more UK workers to be seconded to India as a result of British companies gaining access to Indian government procurement contracts.
Speaking to Sky News, he added: “This is not a tangible issue. This is the Conservatives—and Reform—unable to accept that this Labour government has done what they couldn’t do and get this deal across the line.”
Reynolds also dismissed reports that the Home Office had not been informed about the terms of the deal until shortly before it was announced, saying it was “absolute nonsense reporting.”
The deal includes some easing of rules on “business mobility” for temporary visitors and up to 1,800 chefs, yoga instructors, and musicians providing contracted services.
But the government has insisted it will involve “no impact” on the immigration system or immigration numbers.
The deal, which has lowered tariffs on UK exports including whiskey, gin, and cars as well as imports of clothing from India, is estimated to add “£4.8 billion to GDP per year” from 2040.
But the Tories have seized on the national insurance contribution (NIC) exemptions, known as a double contributions convention, as an example of what they claimed was “two-tier taxes” under the Labour government.
Shadow business minister Dame Harriett Baldwin told MPs the arrangement would be “subsidising Indian labour while undercutting British workers.”
“A double contribution convention will come at a significant cost to the British taxpayer and to British businesses,” she told the Commons on Tuesday.
Reform UK leader Nigel Farage described the deal as “truly appalling,” adding: “This government doesn’t give a damn about working people. The Labour Party has this time in a big, big way betrayed working Britain.”
