Government defends National Insurance exemption in UK-India deal-OxBig News Network

The UK government has hit back against claims by opposition parties that the newly-agreed trade deal with India could disadvantage British workers.

Business Secretary Jonathan Reynolds told the BBC there was “no situation” in which he would “ever tolerate” British workers being undercut as a result of a trade agreement.

One part of the deal extends an exemption on national insurance contributions (Nics) from one to three years – meaning people on short-term visas will only make social security payments in their home country when working abroad.

Opposition parties claim this could mean Indian workers are cheaper to employ than British workers – not least since UK employer Nics have just risen.

Conservative leader Kemi Badenoch claimed she had refused a similar trade-off when she was business secretary, because the deal contains “two-tier taxes” which would cost the UK “hundreds of millions”.

Liberal Democrat deputy leader Daisy Cooper said the exemption risked “undercutting British workers at a time when they’re already being hammered by Trump’s trade war and Labour’s misguided jobs tax”.

Reform UK leader Nigel Farage described the deal as “truly appalling”, adding: “This government doesn’t give a damn about working people.

But Reynolds said the deal would not impact British workers, pointing out the UK has 16 agreements preventing double taxation of work, which cover more than 50 countries – including the US, EU and South Korea.

“The Conservatives recently, well a few years ago when they were in government, signed one with Chile for five years. So no, British workers are not being undercut,” he said.

“What the Conservatives are confused about, and Reform as well, is a situation where a business in India seconds someone for a short period of time to the UK, or a UK business seconds a worker to India for a short period of time, where you don’t pay in simultaneously now to both social security systems,” he told the BBC’s Today programme.

Reynolds said the deal was a “huge economic win for the UK and would deliver “faster growth, higher wages, more tax revenue brilliant wins for goods and for services”.

He said previously that Indian workers would still be required to pay the NHS immigration surcharge and would not be eligible for benefits from the National Insurance system.