Government defends National Insurance exemption in UK-India deal

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

Business and Trade 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.

Under the terms of the deal, some Indian and British workers will be exempt from paying National Insurance for three years. The exemption applies to the staff of Indian companies temporarily transferred to the UK, and to UK firms’ workers transferred to India.

Opposition parties have claimed this could mean Indian workers become cheaper to employ than British workers.

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.

“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.