The left-wing Labour government in Britain has been accused of concluding a free trade agreement with India that will effectively give tax breaks to companies that prioritize importing foreign workers over Brits.
Announced on Tuesday, the bilateral U.K.-India agreement extends an exemption on National Insurance contributions (NICs) from one to three years for Indian migrants, meaning foreign workers could be more attractive to employ for companies already feeling the effects of a recent hike to employer NICs.
Shadow Secretary for Business and Trade Andrew Griffiths slammed the move as a blatant undercutting of working Brits.
“Keir Starmer has just signed a deal which exempts Indian workers transferred to the U.K. from paying National Insurance… after increasing it for British workers. Every time Labour negotiates, Britain loses,” he wrote on X.
Leader of the Opposition Kemi Badenoch also chimed in, accusing the Labour prime minister of sanctioning “two-tier taxes from two-tier Keir.”
Christian Calgie, senior political correspondent at the Daily Express, reported that Badenoch had held up negotiations with India while serving as trade secretary in former Conservative prime minister Rishi Sunak’s administration “as she refused to cave in on visas and national insurance.”
Former Tory leadership hopeful Suella Braverman accused Labour of “caving and opening our labor market to more Indian workers who will be cheaper to hire than Brits.”
This narrative appears to be aligned with the assessment of the Indian government, which wrote in a press release following the deal’s conclusion, “In an unprecedented achievement, India has secured an exemption for Indian workers who are temporarily in the U.K. and their employers from paying social security contributions in the U.K. for a period of three years under the Double Contribution Convention. This will make Indian service providers significantly more competitive in the U.K.”
Nigel Farage, leader of the Reform UK party, which is currently leading in the national polls, also slammed the deal and accused the Labour government of providing a limitless opportunity for mass immigration of Indian workers at a cut-price deal without any impact assessment on what such an influx would mean for social and health services.
“If we look at the detail, it’s truly extraordinary. Indian companies can now transfer workers from India to the U.K., and those workers will not pay any national insurance in Britain for at least three years,” he said in a video posted on social media. “So, at the very same time that they are getting a very big tax exemption, taxes on British workers have been put up since the Labour government came to power.
“It means overall, it’s about 20 percent cheaper after this deal to employ an Indian than a British worker. There are no limits to this deal at all. Bear in mind, that half a million people have come into the UK from India in the last two years alone. It’s impossible to predict how many hundreds of thousands more will come on this deal.”
Even the left-wing Liberal Democrats were critical, with deputy leader Daisy Cooper warning the move risked “undercutting British workers at a time when they’re already being hammered by Trump’s trade war and Labour’s misguided jobs tax.”
Business Secretary Jonathan Reynolds hit back at the accusations, calling the trade deal a “huge economic win for the U.K.” and rejecting claims that it would result in an influx of Indian migration.