Prime Minister Sir Keir Starmer recently hosted top Indian investors and CEOs at 10 Downing Street. This event marked the celebration of the newly signed UK-India free trade agreement. However, opposition parties have raised alarm, warning that the deal might undercut British workers.
A key feature of the agreement extends the national insurance contributions (NICs) exemption from one to three years. This “double contribution convention” allows short-term visa holders to avoid paying social security taxes both in the UK and at home. The Labour government claims this deal will bring a £5 billion annual boost to the UK economy.
Despite the government’s optimism, opposition leaders remain worried. Conservatives, Liberal Democrats, and Reform UK argue the deal could make Indian workers cheaper to hire. This concern has grown especially strong since UK employer NICs recently increased. undercutting British workers echoes through their criticism.
The Indian government has praised the exemption as a major victory. According to Indian officials, the change will help Indian service providers remain highly competitive in the UK.
Although the UK already holds similar tax arrangements with over 50 countries, including the US and South Korea, critics say this deal is different. Business Secretary Jonathan Reynolds defended the agreement, noting it applies only to inter-company transfers of professionals. He emphasized that workers will still pay UK income tax and the NHS surcharge.
Furthermore, Reynolds insisted the exemption would be a net benefit to the UK Treasury. He highlighted that British workers stationed in India would also enjoy the exemption. Yet not everyone agrees.
Conservative leader Kemi Badenoch revealed she rejected a similar deal when she served as business secretary. She argued the current plan creates two-tier taxes that could cost Britain hundreds of millions. According to Badenoch, the agreement unfairly encourages workers from India without providing equal advantages to British citizens.
Liberal Democrat deputy leader Daisy Cooper called the deal “half-baked.” She warned it risks damaging the competitiveness of UK businesses already struggling under global trade instability. Cooper criticized the government’s failure to publish an impact assessment. She stressed that Parliament should debate and vote on all trade agreements.
Reform UK leader Nigel Farage condemned the deal, declaring, “This government doesn’t care about working people.” He accused the Labour Party of “betraying working Britain” in a big way. undercutting British workers defined the opposition’s rallying cry.
In response, a Labour spokesperson defended the deal, saying Indian nationals applying for UK-based jobs would not benefit from the tax exemption. Labour insists the agreement will generate nearly £5 billion yearly, boost wages by £2 billion, and lower prices for struggling consumers.
The debate over whether this deal will help or hurt the UK workforce remains far from settled. Yet the repeated concern about undercutting British workers continues to dominate the national conversation.
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