A landmark trade deal has been agreed between the UK and India but there are concerns over the National Insurance concessions it contains for Indian workers.
The UK government claimed the deal was a win for working people and British business, pointing to reduced tariffs on goods such as whisky, gin and chocolate.
It is an agreement that has been in the making since 2022 and touted as a “big Brexit boon”, said The Guardian. But since the announcement there have been “political fireworks”, said Politico, namely over a perceived relaxation of social security or National Insurance payments for Indian workers in the UK.
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What is the NI concession?
The UK-India trade deal includes what is known as a “double contributions convention”, where “neither Indian nor British workers” will need to pay National Insurance contributions “in both their home country and the one they are working in”, said Politico. Instead, workers will only need to pay it in one nation for the first three years of their placement.
But the announcement means ministers have been “left on the defensive”, said The Times, as critics claim Indian workers will be “paying less in tax than their British counterparts for doing the same job”.
It comes after the government controversially increased employer NI payments during the Autumn Budget.
Conservative leader Kemi Badenoch described the NI issue in the UK-India trade deal as “two-tier taxes from two-tier Keir”.
Are Indian workers getting a better deal?
Business secretary Jonathan Reynolds has insisted the deal “would not impact British workers”, said the BBC, stating the UK has 16 agreements designed to prevent “double taxation of work”. Such agreements cover more than 50 countries, “including the US, EU and South Korea”.
Even influential Tory figures such as Oliver Dowden and former Brexit minister Steve Baker have backed the deal, said The Guardian, highlighting that opt-outs for seconded workers “were routine in trade deals”.
Delhi has also argued that its workers “would not receive any of the benefits that National Insurance is supposed to pay for”, said The Times, such as pensions and welfare payments.
The exemption also doesn’t apply to all Indian nationals working in the UK, said FullFact, “though this hasn’t been made clear”.
Trade minister Douglas Alexander told LBC the exemption would be for “a very specific and limited group of Indian business people for a period of three years”.
Indian workers seconded here will still have to pay the UK immigration health surcharge on NHS care, said FullFact. Plus, the arrangement is reciprocal. Consequently, British workers sent by their companies to work in India will benefit as “they won’t have to make Indian social security payments for up to three years”.
